Bo Tefu and Antonio Ray Harvey | California Black Media
California’s older workforce is expected to grow significantly over the next 15 years, reshaping the state’s labor market as its population ages. A new report from the Public Policy Institute of California (PPIC) projects that the number of workers age 65 and older will increase even as overall labor force participation among older adults remains largely unchanged.
The report, Older Workers in California, by Hans Johnson, Eric McGhee, Daniel Payares-Montoya, and Sarah Bohn, examines workforce trends and projects changes through 2040. The policy brief was adapted by Vicki Hsieh and supported by the James Irvine Foundation.
By 2040, about 23% of Californians will be 65 or older, up from 14% in 2020. Meanwhile, the state’s working-age population is expected to remain virtually unchanged, creating challenges for the labor market and public programs serving older residents.
In 2024, approximately 1.3 million Californians age 65 and older were in the labor force. That number is projected to reach 1.8 million by 2040.
Older workers also accounted for about 30% of California’s labor force growth between 2006 and 2024, when the number of workers in this age group increased by approximately 754,000.
The report projects that the racial and ethnic composition of California’s older population will continue to change. White Californians accounted for 51% of the population age 65 and older in 2024, down from 64% in 2006. That share is projected to fall to about 41% by 2040, while the Latino share is expected to rise from 23% to 29% and the Asian share from 17% to 21%.
Black Californians are projected to remain about 6% of the state’s older population through 2040. The report also projects that labor force participation rates among older adults will converge across racial and ethnic groups, reaching approximately 18% by 2040.
The findings highlight the financial pressures facing some older workers. About 20% of Californians age 65 and older were living in poverty in 2023 and 2024, with an additional 14% considered near-poor.
Wages help keep an estimated 800,000 older Californians out of poverty.
The report notes that some older adults continue working by choice, while others do so because their retirement income is insufficient. Rising living costs, limited retirement savings, and changes in public benefits can make continued employment an economic necessity.
As California prepares for an aging population, the researchers point to the importance of workplace flexibility, protection against age discrimination, and policies that support older adults’ economic security.
