The hard math behind America's labor shortage
Yes, the pandemic has created unusual temporary labor market dynamics. But in the bigger picture, the 2010s were a golden age for companies seeking cheap labor. The 2020s are not.
The big picture: In the 2010s, the massive millennial generation was entering the workforce, the massive baby bo0m generation was still hard at work, and there was a multi-year hangover from the deep recession caused by the global financial crisis.
- But now, boomers are retiring, millennials are approaching middle age, and the Gen Z that follows them is comparatively small.
Why it matters: Demography is destiny, and U.S. demographics in the years ahead favor workers over employers.
By the numbers: The Congressional Budget Office forecast in July that the size of the U.S. labor force will grow by a mere 0.2% a year from 2024 to 2031. Employers can't count on a flood of new workers to fill empty jobs.
- "We're trying to warn employers that this is not just a passing fad but a new reality," said Bruce Evans with Emsi Burning Glass, a firm that analyzes job listings.
- "When I entered the labor market, all these systems were set up to keep people away, because every job was overwhelmed with the number of workers looking to do those jobs," said Evans. "Now that's just not true anymore, but all those systems have been retained."
The bottom line: Fortune favors the bold — as well as the companies that recognize that the labor market of the 2020s isn’t going to be like that of the 2010s.