American employers should brace themselves for a serious worker shortage, especially between 2010 and 2015, as members of the baby boom generation retire without enough younger workers ready to replace them, says David Pearce Snyder, one of the top futurists in the nation.
"In a real sense, the workforce is aging" he said. "The entry-level labor pool will be very small. Now, education becomes more important. We need everyone we can get with skills."
Snyder, the contributing editor of The Futurist magazine, was in Milwaukee recently speaking at the University Club about the future of the American workforce. Snyder analyzes statistical data to make his predictions about the future. Citing U.S. Bureau of Labor Statistics data, Snyder says there will be a worker shortage in the United States of about 3 million in 2012.
The Bureau of Labor Statistics (BLS) is projecting the American workforce to grow to 162.3 million in 2012. The bureau also estimates that the number of jobs needed to support the level of economic activity projected for America in 2012 will be about 165.3 million. A comparison of those two numbers results in the projected 3 million worker shortage.
Snyder said the BLS numbers indicate it will be a tight labor market in coming years.
"We’re going to have fewer workers than we’ve got jobs," he said. "We’re not just talking about a numbers shortage, we’re also talking about a shortage of qualified workers."
The BLS also predicts an unemployment rate of 5.2 percent in 2012.
Before entering private practice as a consulting futurist in 1981, Snyder worked as chief of information systems and then senior planning officer for the Internal Revenue Services. He has also served as a consultant to Santa Monica, Calif.-based RAND Corp. and was an instructor for the Federal Executive Institute and for Congressional and White House staff development programs.
Snyder said the amount of people between the ages of 55 and 64, when many retire, will increase by 50 percent between now and 2015. That’s because the baby boom generation, born after World War II, roughly from 1946-64, is approaching retirement age.
The generation behind the baby boomers, born from 1965-84 and known by some demographers as the "baby bust" generation, is much smaller in population size than the preceding generation.
Another baby boom, called the "baby boom echo" by some demographers, occurred from 1985 to 2002. However, that second baby boom is just starting to enter the workforce now.
The aging of the baby boomers, the small population of the "baby bust" generation and the youth and inexperience of the "baby boom echo" generation will create a "perfect storm" resulting in the labor shortage, Snyder said.
The worst of the labor shortage will occur from 2010 to 2015, he said. The labor shortage could result in wage inflation, which would benefit workers but could make it more difficult for American companies to compete in the increasingly global economy.
Snyder foresees several micro-trends in the workforce of tomorrow, including:
Older workers
However, not all of the baby boomers are retiring. As a whole, the American workforce is going to become older, Snyder said.
The average retirement age today is 61, and that will rise to 67 by 2015, he said. Today, 13 percent of the workforce is over 55. By 2015, 19 percent of the workforce will be older than 55, Snyder said.
People are living longer and are living healthier in their later years so they are able to work longer, Snyder said. Many want to keep working because their job gives them an identity. Others need to keep working because they have not adequately prepared for their retirement. Many who keep working simply enjoy what they do, Snyder said.
Businesses are going to need those older workers to stick around longer, because the labor shortage will result in a shallow pool of capable workers to replace the retirees.
"Do what you can to keep your older workers, especially your good ones," Snyder said.
More diverse workforce
The American workforce is also going to gradually become more diverse, Snyder said.
Today, about 11 percent of the workforce is Hispanic, about 12 percent is African-American and about 2 percent is Asian. By 2015, about 14 percent of the workforce will be Hispanic, about 13 percent will be African-American and about 4 percent will be Asian, Snyder said.
The pending labor shortage will force more companies to embrace diversity, Snyder said.
"You are absolutely going to have to become more culturally diverse," he said. "You’ve got no choice. Diversity is no longer a moral issue (for employers). It is an issue of survival. You have to hire anybody that walks in the door who happens to be qualified."
American employers will increasingly rely on immigrants to fill jobs, Snyder said. Almost half of all new U.S. workers during the last 10 years have been foreign-born.
"Without those people we are in serious trouble," he said.
Immigrants, including illegal aliens, currently comprise about 12 percent of the U.S. population. They make up about 15 percent of the workforce, including 20 percent of the minimum wage jobs, Snyder said.
If the U.S. government makes changes to its immigration policy that decrease the number of immigrants coming into the country, it would cause a "catastrophe" for the nation’s economy, Snyder said.
"We’re going to import the workers," he said. "We will not see any significant curtail in immigration."
Smart, progressive companies will find ways to best use immigrant laborers such as providing English language classes for immigrant workers or Spanish classes for supervisors with Hispanic employees, Snyder said
More women in workforce
There will also be more women in the American workforce of the future. By 2020, for the first time in the nation’s history, more than half of the workforce will be women, Snyder said. Today, about 47.5 percent of the nation’s workers are women.
"Women are fighting in combat," Snyder said. "Let’s quit thinking about them as women and think of them as productive employees, like everyone else. I think that is likely to happen after all of these years."
Shortage of blue collar workers
Although white collar workers are retiring later, blue collar laborers are still retiring "on schedule" in their early 60s because the rigors of a blue collar job prevent them from extending their careers, Snyder said. Teachers and police officers are also still retiring in their early 60s, he said.
In addition, fewer young people are pursuing blue collar work as pressure from society and their parents encourages them to go to college and pursue a white collar career.
"There’s a dramatic shortage of blue collar workers, and it’s only going to get worse," Snyder said.
Many manufacturers in the United States have improved efficiencies to increase productivity and maximize what they can get out of their blue collar workforce, Snyder said.
Office workers will also have to become more productive to compete in the global economy with white collar workers around the world, Snyder said. Those innovations will improve productivity and help make up for the pending labor shortage, he said. Many of the jobs that will put people to work during the information age have not been created yet, he said.
In recent years, some U.S. companies have outsourced manufacturing production overseas to nations with low-cost labor, including China. Increasingly, more information technology work has also been outsourced overseas, in many cases to call centers in India.
"(The number of jobs outsourced overseas) is a small number," Snyder said. "The labor unions would like you to believe they are a large number."
Some critics have said that the loss of American jobs to workers in foreign countries is damaging the U.S. economy and making it harder for U.S. workers to find jobs. However, Snyder disagrees. He says American companies will need to continue outsourcing work because they will not be able to find enough workers when the pending labor shortage hits.
Working from home
More people are going to work from their homes in the future, Snyder said. Currently, 24 million salaried employees in the U.S. work from home at least one day a week. By 2015, about 40 million salaried workers will work from home at least one day a week, he said. Improvements in communications technology, including the Internet, are allowing more people to work from their homes.
As baby boomers age, more of them will move in with their children, placing more pressure on their children to work from home, Snyder said.
May 13, 2005, Small Business Times, Milwaukee, WI
