Oh the labor shortage thing: it get dredged up every so often, and not without cause. We all know the theory behind it, more or less. The boomers are aging, and they are going ot exit the labor force. The generation coming up behind them was not nearly as plentiful in numbers, so they won’t really be replaced. So, as long as the economy keeps growing and nothing major (immigration, labor force paritcipation rates etc.) changes, then there will be lots of unfilled jobs out there.It’s been a popular view for years, although not expressed too much these days, what with the not-too-far-off 10 percent U.S. unemployment rate, and the gloomy prospects of jobless recovery to come.
Given all that, I read with interest the Met Life Foundation/Encore Careers paper “After the Recovery: Help Needed”. The premise is basically as set out above, with the added caveat that the ‘shortage’ of workers will provide lots of opportunities for those 55+ looking for something more exciting (and better paying) than playing Canasta. By the calcualtions of the authors, there could be a least 5 million potential job vacaties in the U.S. between now and 2018.
Sounds like a job hunters paradise – sort of.
I don’t really have any problem with the methodology behind the calculations. The authors use existing Census Bureau stats to estimate that between 2008 and 2018, there will be 21.8 million additional adults in the U.S. aged 18 or older. That’s basically the potential new labor force. If the current labor force paraticipation rate (the percentage of adults either working or looking for a job, now about 66.2 percent) holds, that gives you 14.4 more workers. That’s about equal to the number of jobs that are calculated to be available over that time period.
So where’s the shortage? Well, as the authors point out, most of that growth in the labor force will be in workers aged 55 plus. Since those workers are less likely to be in the job market than is the ‘average’ labor force participant, then the labor force participaton rate is going to fall, to something like 64.5 percent. Translation: an older population has less available workers than a younger one.
As the authors also point out, they are working under the assumption that nothing major is going to change. If immigration was skewed way up, for example, then you wouldn’t have the same supply side issues.
What they don’t spend much time on either, is that the participation rate can also be rapidly ratcheted higher if wages went up. That is, if the ‘shortage’ of workers meant you got paid more for working, then some of those sitting it out (college students, stay at home parents, retired workers) would find it worthwhile to look for worker.
Poof, the shortage would disappear.
And of the of course the whole ‘demand side’ of the forecast is up for grabs too.
Although the report uses modest employment growth projections, even those could be blown away by a recession.
But what if the report is dead on, and this labor shortage does happen? Will it be a jobs bonanza for everyone?
Well, sort of – as long as you are a special ed teacher, nurse, nursing aide or home helath aide or medical assistant. Those ‘caring’ professions and variations on them account for the first seven of the top 15 jobs that will provide career opportunities for the next decade. Also on the list are child care workers, teacher assistants – and clergy. In total, nearly half of the top-growth occupations will be in some kind of social services.
Good times – if you want to work in a hospital (or a church).
Other occupations? Oh sure, there are some that will do decently, but few others are going to produce enough jobs that anyone talks about a shortage. In fact, for a lot of other occupations things are likely to be pretty tight.
Interesting stuff to chew on, espeically if you are choosing your career (or your second career or your third one).