Weekly new jobless claims have exceeded 400,000 for more than five months, underperforming even amidst speculation of an economic recovery, but the ailing labor market didn't stop Business 2.0 magazine from titling its September cover story, "A Job Boom is Coming."
The article argues that within two years a skilled labor shortage will begin as the first baby boomers start to reach retirement age, and by 2010, the country's labor shortage will become acute. As a wide swath of the workforce nears retirement, the size of the college-educated employee pool is on track to actually stagnate in the next few decades, rather than grow sharply as it had since the 1950s.
As soon as this decade, the article posits, the labor shortage of the 1990s will look like "a minor irritation" compared to the skilled labor shortage that will befall companies. By 2010, analysts in the article estimate a 5.3 million skilled-employee labor "gap," and the shortfall is estimated to balloon to 21 million by 2020.
Economists aren't alone in tolling the warning bell. Companies as diverse as Intel (NASDAQ:INTC), Sprint (NYSE:PCS), Whirlpool (NYSE:WHR), and others (including the largest job-placement firm in the world), told Business 2.0 they fear "that the supply of labor is about to fall seriously short of demand." Larry Summers, a former Treasury secretary and the current Harvard president, regards a skilled labor shortage as "all but inevitable."
Sprint went on to point out that half of its 6,000 field and network technicians are older than 50, while at Cigna (NYSE:CI), about a quarter of its 3,400 information technology (IT) workers will surpass 55 years of age in the next six years.
Today's 6.2% unemployment rate is the country's highest in nine years, making warning calls of a coming labor shortage ring hollow to many. But baby boomers -- the country's largest generation -- make up nearly 60% of the primary workforce, and the number of workers coming up behind them is not nearly big enough to fill the giant gap they'll leave as they retire.
Unless most baby boomers work longer into retirement years, a labor shortage (especially in skilled technology and medical fields, Business 2.0 argues), may be much closer than you think.
