The Bureau of Labor Statistics announced some very good news on Friday: the economy created the most new jobs in two years last month, and the unemployment rate dropped to 6.3% from its previous 6.7%. Nearly three-quarters of a million people found jobs in April, while the ranks of the long-term unemployed shrunk to 3.5 million from 4.4 million one year ago.
After nearly six years of being in the economic doldrums, there finally seems to be solid proof that better times are ahead. But, wait: another crisis could be looming, according to the Conference Board. In a recent publication, the global business membership and research association foretells a time in the not-too-distant future when employers will face a dearth of available workers with which to fill job openings.
From feast, to famine
To what do the Conference Board researchers attribute this decline in the number of workers over the next few years? There are several reasons for this hypothesis, all of which the authors have determined point squarely at an upcoming labor shortage that could result in a 3.8% -- or lower -- jobless rate within 15 years.
Considering how employers have had so many workers from which to choose in the years since the financial crisis, this theory sounds intriguing. Wouldn't it be great for the nation to return to a rate of unemployment not seen since the late 1960s?
It certainly would, but don't hold your breath. Some of the assertions made don't appear to jive with the realities of the labor market that have taken hold since the Great Recession.
In a discussion of the study on the association's website, there seem to be several factors currently indicating a movement toward widespread labor shortages: retiring baby boomers, wage growth, and the inability of employers to fill vacant positions.
I would argue that those issues are not as black-and-white as this paper suggests. For instance, even though it is true that thousands of baby boomers are reaching the traditional retirement age of 65 each day, many are not retiring, or planning to do so. In fact, workers over the age of 55 have the lowest unemployment rate of any age demographic. This is likely to persist, it seems. A recent Gallup poll showed that 39% of respondents said they did not expect to retire until age 66 – or older.
While some employers are having trouble filling some skilled positions, there are also tens of thousands of college graduates working in jobs that pay minimum wage – or less, according to the BLS. If filling vacancies is such an issue, employers need look no further than their neighborhood Starbucks for an educated workforce that would no doubt be glad to turn in their aprons for more education-appropriate work.
The idea that wages are growing is also suspect. Wage stagnation has become the norm, even for college graduates, who gained a lousy 1% increase in pay between the years 2000 and 2012.
After the most recent jobs report, it might seem easy to imagine a job market not only returning to its pre-crisis normality, but improving with a vigor not seen in 45 years. However, we will need more than one encouraging employment report -- as well as more progress on issues such as retirement security and stagnant wages – before the predictions proffered in this report become reality.
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