The unemployment rate in the U.S. changed little this month, holding at 4.1%, according to the Bureau of Labor Statistics. But some experts are concerned about the future as job openings outpace the workforce and older generations retire.
The latest report from the U.S. Chamber of Commerce shows there are 8 million job openings in the U.S. and 6.8 million people unemployed — a gap that is expected to increase as older Americans retire in waves described by some as a "silver tsunami."
Lightcast, a company that focuses on providing labor market data to help empower communities, reported in September that U.S. employers will soon “face the largest labor shortage the country has ever seen.” The latest report, titled “The Rising Storm: Building a Future-Ready Workforce to Withstand the Looming Labor Shortage” lays out a deficit of six million workers by 2032. According to findings, foreign born workers are helping keep the economy afloat by filling roles in construction, hospitality, and other sectors.
A new labor report released this year by Mercer, a consulting firm, predicts over the next five years the medical work will experience a shortage of more than 100,000 health care workers. The states expected to be hit the hardest include Georgia, Massachusetts, Tennessee, New Jersey and New York.
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This October the National Association of Home Builders also reported that thousands of construction workers will be needed to reduce the nation’s housing deficit. NAHB is estimating a shortfall of 1.5 million homes.
According to the Home Builders Institute report, immigrant workers now account for 24.7% of the construction workforce, a historic new high. In construction trades, the share of immigrants surpassed 31%.
“The data clearly shows that we're very, very dependent on foreign labor to get that work done,” Hetrick said. “We didn't have children for several decades… the younger population overwhelmingly goes to college so that leaves us with, 'well, then who builds homes?' You know, 'who fixes highways?'”
Hetrick says Americans need to brace for the silver tsunami of older workers leaving the workforce. According to Lightcast, of the 5 million workers who left the workforce in 2021, 80% were over the age of 55, and with the average retirement age now dropping to 61 it’s further shrinking the labor market.
“This massive group of people, very driven, you know, 2 income households, they have a lot of money and they're all retiring and so they're all going from producers to consumers,” Hetrick said.
As older generations retire the demand for goods will increase, adding a strain to a job market struggling to find workers during a time when there is historically low participation in the labor force.
The U.S. Chamber of Commerce also examined the labor shortage and cited several factors leading to more job openings, including people living on savings or what’s left of pandemic aid, low legal migration, and women leaving the workforce to become homemakers.
Hetrick says the solution to the issues at hand is promoting trade specialties, cross-training new generations, incorporating Artificial Intelligence, and employing migrants to help fill positions.
“At the end of the day, you need a body in the job,” Hetrick said. “If you don't get the body and the job, then you provide less service. You are a restaurant that doesn't open all their tables. You're a hospital that doesn't fill all of their beds. You're a construction company that doesn't build all of the homes that you were hoping to build.”
In fall of 2022, more than 15 million students were enrolled in college for an undergraduate degree, according to the Education Data Initiative.
Hetrick says the job market is saturated with college graduates with similar degrees and the job openings are for service level jobs like hospitality and construction. He predicts companies will have to increase their wages to lure new employees that could in return lead to consumers paying higher prices.
