After the Recovery - The Coming Labor Shortage

The Coming Labor Shortage and How People In Encore Careers Can Help Solve It  


With 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 part-time 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 remarkable turn of events is likely to occur as the baby boom generation reaches traditional retirement age. If this generation retires from the labor force at the same rate and age as current older workers, the baby bust generation that follows will likely be too small to fill many of the projected new jobs. Even when the “echo boomers” – the children of the boomers – hit the labor market, those 55 and older will still be the dominant age cohort. 


Between 2015 and 2030, the U.S. Census Bureau projects a total increase in the U.S. population of 47 million. The increase in the number of individuals 55 and older will be more than double the increase of those ages 20 to 54 (an additional 25 million versus an additional 12 million). If this shift in the age distribution to older Americans contributes to substantially reduced labor force participation, long-term economic output and real household income could suffer as jobs go unfilled.

When the nation comes out of the current jobs recession – and this may take two to three years – we will begin to see spot shortages in labor markets. If the economy continues to improve, the spot shortages will become more general, and we will experience the shortages our research projects.

By 2018, with no change in current labor force participation rates or immigration rates and an expected return to healthy economic growth, we will have more jobs than people to fill them. That’s true within the entire economy and particularly true of the fast-growing social sector. 

A labor shortage leaving as many as 30 to 40 percent of all projected  additional jobs in the social sector vacant, could have a significant impact on our economy and on the quality of life in our communities 

If the full employment gap is not filled, using data from the Congressional Budget Office, we estimate the loss in total output could be as high as $3 trillion across a five-year period beginning in 2018. 

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 our 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.

Bluestone_and_Melnik_-_After_the_recovery.pdf476.23 KB
Barry Bluestone and Mark Melnik

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