How the end of the white majority could change office dynamics in 2040

For its 125th anniversary issue in 2013, National Geographic photographed a series of mixed race Americans. The portraits were framed as the “changing face” of America, seemingly a preview of our ethnically ambiguous future. “We’ve become a country where race is no longer so black or white,” the story posited.

It’s true that in the coming decades, the U.S. will indeed get browner—a shift that is already well underway. In 2018, non-Hispanic white Americans accounted for about 60.4% of the population, as per Census Bureau estimates. That’s a notable drop from 2000, when they comprised 69.1% of the American populace.

In two decades, we’ll be on the cusp of a demographic milestone: the advent of a white minority. According to 2018 census projections, the non-Hispanic white population will fall to about 49.7% by the year 2045.

Despite this demographic shift, we’re nowhere close to a utopian post-racial society in which racial discrimination is a thing of the past. When the census first disclosed its projections in 2008, the imminent reality of a white minority took the public by surprise. “I think most people were blindsided by it because they didn’t really know what the trends were,” says Dowell Myers, a demographer and professor at the University of Southern California. “When people get projections, they kind of treat them like it’s the present. It accelerates the pace of change, so [people] get freaked out by that.” A 2014 study found that white Americans who were made aware of the country’s changing demographics showed greater bias against minorities than those who weren’t privy to that information.

Myers and other demographers argue the census classification system doesn’t adequately represent the white population or the growing mixed-race contingent. Though respondents can choose more than one race or identify as Hispanic, the census projections usually count mixed-race people as minorities. At issue is the sticky matter of identity: Some biracial people might think of themselves as black. Others may not. So how should they be classified?

Another concern is the “majority-minority” narrative peddled by the Census Bureau and media, which some people believe glosses over the nuances of racial identity. As Valerie Wilson points out, the projected majority-minority future largely hinges on a hodgepodge of disparate racial and ethnic groups.

“One of the things we sort of assume in this framing is that people of color are all one monolithic group with the same interests and concerns,” she says. “What the majority-minority framing really means is that no single group is going to be a majority of the population.”

Whether or not those projections come to pass, one thing is certain: In the coming decades, the American population will look markedly different, and a similar transformation will likely follow in the workplace. In recent years, the corporate world has had endless conversations about the importance of diversity, first positioning it as a moral imperative and then making the business case. Many companies and executives have repeatedly pledged their commitment to diversity and inclusion efforts, often with little to show for it. Soon they’ll have no choice but to act.

The labor force of 2040

The tipping point, according to census projections, is the year 2045, when the U.S. population is estimated to be 24.6% Hispanic, 13.1% black, 7.9% Asian, and 3.8% mixed race. (These figures could change after the 2020 census, which is already underway.) But even by the start of the decade, the percentage of white, non-Hispanic Americans is expected to fall under 52%, as per Brookings Institution fellow William Frey’s analysis—and a younger generation of minorities and mixed-race people will make up the difference. (Within younger age groups, minorities will outnumber white Americans this decade itself.)

There are a number of reasons for this demographic shift: the size of the aging white population, for one, coupled with a falling growth rate. “Currently about 17% of the population is 65 and older,” says Patricia Buckley, director of economic policy and analysis at Deloitte. “By 2040, it’ll be [about] 22%.” Then there’s the projected upswing in the Asian, Hispanic, and mixed-race communities.

Buckley’s research indicates that the future workforce won’t just be more diverse in terms of both race and gender, as more and more women are better educated and enter the workforce. (This year, the share of women on payrolls actually outpaced the share of men.) It will also be older than it currently is because Americans are working for longer. “The age component is more striking right now because we’ve seen, over time, the increase in diversity,” Buckley says. “The aging of the baby boomers, just because of the size of that cohort, is making a huge impact on labor force.”

It’s not just that more boomers are working. By 2040, even the much-maligned millennials—a generation that outnumbers its predecessor, Gen X—will have joined the older ranks. “By the year 2030, the oldest millennials will be 49, and then by 2040, the oldest millennials will be 59,” Frey says. “You think of millennials as these young people, but in fact they’re going to be a prime part of the labor force over the next 20 years.”

Age is correlated with education, as well, since Americans who remain in school longer may enter the workforce later. Despite nagging questions about the future of higher education, the labor force will only become increasingly educated. The baby boomers were once the most educated generation, but each cohort since has been better schooled than its predecessor. Millennial women, in particular, have sought higher education in higher numbers than their male counterparts: As of 2018, 43% of millennial women ages 25 to 37 had at least a college degree, as compared to 36% of men, according to the Pew Research Center.

The results of that crossover are already changing the workforce, Myers says. “The men have stagnated, and the women are rising,” he says. “Women are more than half of the college-educated population. And they are rising to positions of CEO—not a lot yet, but there are a lot of [women] ready to go.” In the years to come, women will continue streaming into workplaces, Myers says, which he believes will be the most noticeable shift.

Of course, a more diverse populace won’t necessarily eliminate systemic inequalities that affect people of color—or women—with or without a college degree. “Education does not eliminate racial disparities in the labor force,” Wilson says. “Even among college graduates, we have significant differences in pay based on race and gender, as well as differences in rates of unemployment.”

Wilson’s research also shows that much of the increased diversity will actually stem from the working class, which accounts for 63% of workers. (The working class is defined here as people who don’t have a bachelor’s degree, which means they’re more likely to hold low-wage, hourly jobs.) Within the working class, people of color will become a majority by the 2030s.

“This is already closer to reality than 2040,” Wilson says. “So I think it’s important we understand and address long-standing inequalities in the labor market on the basis of race. I don’t think the change in the demographic makeup necessarily means that things get better, which is why I often lead with: We have to address these problems.” Plus, as older workers remain in the labor force past retirement age, the opportunities for younger minorities in senior leadership or the C-suite may be fewer than we might think. “Just because the demographics change doesn’t mean the power dynamics change,” Wilson says.

The business case

Between low birth rates and a ballooning older population, the U.S. is faced with a shrinking rate of labor force growth. In 2040, population growth is on track to drop to 4.1%, less than half of what it was from 2000 to 2010. By 2034, there will be an estimated 77 million Americans over the age of 65—and for the first time in history, more seniors than children.

All this means that in the coming decades, businesses that have given lip service to promoting diversity will likely have to widen their hiring pipelines, out of sheer necessity. Still, Porter Braswell—the cofounder and CEO of diversity hiring startup Jopwell—is buoyed by how many people are openly discussing the problem. “The diversity challenge is something that’s going to exist forever,” he says. “What I think has happened, and where I think the progress has actually been made, is that this is now it’s a national conversation. It’s a conversation boards are having with their leadership team.”

In 20 years, Braswell argues, the business case will be even clearer, especially as a younger crop of leaders takes the reins. “My belief is that by 2040, because people know a diverse workforce is good for business,” he says, “that they understand if they want to sell products to this new demographic, they better have people in [positions] of power that understand that demographic.” And if they can’t keep up? Talent will find its way elsewhere, he says.

“If there’s an unwillingness to revamp the culture to meet the needs and desires of this changing workforce, then those companies are going to be left behind,” Braswell says. “Talent is going to shift over to a lot of these smaller, more disruptive, more nimble companies.”

Something that companies and economists alike can agree on, though, is that America’s demographic future will also rely on immigrants. According to census projections, Frey says, immigration will considerably augment certain minority groups, in particular the Hispanic and Asian populations: Growth rate estimates through 2060 attribute a third of Hispanic growth and three-quarters of Asian growth to immigration.

“We’re lucky as a country because we’ve had these immigration waves for the past 30 years,” Frey says, citing countries like Japan that have seen a declining labor force. “[Here] it’s slow-growing, but it’s not a decline. And the reason for that is because we’ve had relatively younger immigrants coming to the U.S.”

When faced with quantifiable forecasts of the not too distant future, it’s hard to argue with Frey’s assertions about the essential role immigration plays in the economy and labor force. In fact, he’s optimistic that the surge in anti-immigrant sentiment—emboldened by the current administration—will dissipate sooner rather than later.

“As you get more millennials into their prime middle-age years, they’re going to be bosses, executives, and politicians—and they have much different attitudes,” he says. “Maybe, for another couple of years, we’ll have this difficult political environment. But I think we’re going to get over that. Demography tends to rule in the end.”