The Coming Labor Shortage

 A report By Barry Bluestone and Mark Melnik, Kitty and Michael Dukakis Center for Urban and Regional Policy, Northeastern University Boston

Interesting thoughts from the report--the full report can be found here

With nearly 10 percent of the American labor force unemployed and  another 7 percent so discouraged by their job prospects that they have either dropped out of the labor force altogether or are working at parttime jobs when they would prefer full-time employment, it may come as something of a surprise that within less than a decade, the United States may face exactly the opposite problem – not enough workers to fill expected  job openings.

This analysis is based on official forecasts of population  growth from the Census Bureau; official forecasts of job growth and labor force participation from the U.S. Bureau of Labor Statistics; and estimates of the number of jobs in specific occupations based on the Labor Market Assessment Tool developed jointly by the Dukakis Center for Urban and Regional Policy at Northeastern University and the Research Division of the Boston Redevelopment Authority.

Encouraging people to work longer will go a long way toward preventing such a significant labor shortage. Fortunately, boomers are not expected to retire at anywhere near the same rate as earlier cohorts of older workers. In fact, large increases in labor force participation are expected to occur among those aged 55 and older, with 55- to 64-year-olds increasing their participation rate from 64.5 to 68.1 percent between 2008 and 2018. Those aged 65 to 74 are expected to increase theirs from 25.1 to 30.5 percent. And those 75 and older are projected to increase their participation rate from 7.3 to 10.3 percent.

 But these increases may still not be enough to avert a labor shortage. Using official estimates of projected labor force participation rates, our research shows that there would still be 3.3 million to 4.0 million jobs that could go unfilled between now and 2018. More than 1.5 million of these unfilled jobs would be in the social sector.

As our analysis demonstrates, many of these jobs will go begging unless older workers move into them and make them their encore careers.

 In the current economy, there are so many unemployed people that younger workers seem to be competing with older workers for available jobs. If the economy recovers, as employment projections predict it will, this competition will all but disappear. Instead of workers jockeying for jobs by enhancing their skills to gain the approval of employers, we may find that employers are forced to find ways to enhance their jobs to attract older workers to fill them.

Not only will there be jobs for these experienced workers to fill, but the nation will absolutely

need older workers to step up and take them – to assure continued economic growth and to
provide the critical social and government services on which we all depend.