PPIC Projects California's 65-Plus Labor Force Will Reach 1.8 Million by 2040

The numbers are stark. By 2040, about 23% of Californians will be 65 or older, up from 14% in 2020, according to PPIC. The population ages 18 to 64 is expected to stay virtually unchanged. The ratio of older adults to working-age residents will reach a record 38 per 100. The 65-and-older labor force is projected to grow from 1.3 million in 2024 to 1.8 million by 2040.

That growth has limits. Participation rates among adults ages 65 to 74 will keep rising. But the fastest population growth will be among people 75 and older, who take part in the labor force at much lower rates. As a result, growth in the older workforce will slow slightly compared with past decades, according to the report.

The older workforce will also look different. Non-Latino White workers made up two-thirds of older workers in 2006 and will be a minority by 2040. The fastest gains will come among Latino and Asian American workers, many of whom immigrated to California in the 1980s. Foreign-born residents will make up 43% of older workers by 2040. College graduates will be 46% of the older labor force, up from 39% in 2006. Men will remain a majority at 54%, though the gap with women is expected to narrow.

Not all older workers are working by choice. Participation among older adults without a high school diploma is rising, to 33% by 2040. PPIC attributes this largely to lower-income immigrant workers who continue physical labor out of economic necessity. Earnings also hold up household finances: PPIC estimates that work keeps about 800,000 older Californians (13%) out of poverty. Without wages, the poverty rate for adults ages 65 to 69 would jump from 18% to 43%.

For employers, the implication is a matter of interpretation, not a PPIC finding. If the working-age population is flat, companies competing for talent in California have few other sources of new workers. Firms that adapt roles, schedules and benefits for older staff may hold an advantage over those that do not. The older workforce is also not one group. College-educated workers who want flexibility and workers in physical jobs who need income face different risks and will likely need different arrangements.

On regulation and policy, the report points to four areas: enforcing agediscrimination law, job flexibility, access to health care, and support for caregivers. Researchers said turning the goals of California's Master Plan on Aging into concrete labor market opportunities will be vital to the economic security and dignity of older residents. The source does not describe any specific new rules.

Watch next for whether employers and state agencies act on these recommendations, and whether participation among adults 65 to 74 keeps rising as PPIC projects.

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