2020 Foresight

SW: You’ve said that longevity isn’t the critical factor that’s aging our work force, but what about the number of Minnesotans turning 62?

TG: People think of the number of Minnesotans turning 62 as a flat, very smooth process. However, there was a big demarcation in 2008 [about a 30 percent rise from 2007], which seemed to come as a big surprise to many. There is also an apt comparison to Japan. Our age structure in 2008 is very similar to Japan’s in 1988. At the beginning of this period for Japan, they had a housing collapse, a financial market collapse, and they began a two-decade-long recession, caused by an aging work force and a smaller work force.

SW: Isn’t the way out of this dilemma to import productive workers from other countries?

TG: The immigration component is going to be critical. But remember, every other state is facing the same aging situation we’re facing.

In 1990 in Minnesota, about 3 percent of the work force—across all age groups—was foreign born. But look at 2007 data: For younger workers in their 20s and 30s, there has been a tremendous increase in the number of foreign-born workers—nearly 20 percent, one in five. For older workers—the managers, the supervisors, the legislative leaders—their world may appear to be the same as in 1990. But it’s not. They’re making decisions about a work force that has radically changed, a work force they increasingly don’t understand.

SW: In your recent speech, you talked about the ‘New 3 Rs for Economic Success: Retention, Recruitment, and Retraining.’

TG: What we’re going to see by the end of the next decade, 2020, is the slowest rate of growth in the labor force we’ve ever experienced in Minnesota. Economic growth is really going to slow down unless we can pump up productivity growth.

Our data also include an assumption that the retirement age is going to increase—that people in their mid-60s will work longer—but perhaps not as much as we’ve hoped. People talk about retiring later, but the actual retirement dates haven’t moved much. Why? It has to do with health, the health of a spouse, or disability.