With shrinking population will come new approaches
As the economy reopens in the wake of COVID-19 shutdowns, employers are facing a harsh reality. There are simply fewer workers, including right here in our own area. Yes, some of that right now is due to COVID-related unemployment money still being dispersed. That is obvious and well-documented. But that will end at some point. The guess here is that employers will still be scrambling in some sectors to fill slots.
Census Bureau estimates show the U.S. working population (ages 16-64) fell 0.1% in 2020. It might not seem like much, but it is the first decline in decades — a result of changes in immigration, a slowing birth rate and the retirement of the Baby Boomers. Given the impact that generation has on the workforce, even a small reduction makes a big difference.
Economists see this as an opportunity: Fewer people of working age means a competitive field to retain employees, which may mean higher pay and other incentives to attract and retain workers. It is no longer a buyer’s market, so to speak. Employees may be in the driver’s seat for their careers. But by the same token, our economic expansion will be based on those workers’ productivity. As Baby Boomers reach retirement, then, employers may find there aren’t enough young adults to replace those leaving. Certain sectors will feel this hit hardest.
Gad Levanon, an economist at the Conference Board, told the Associated Press the number of those without a four-year degree will drop as Boomers retire and younger people are more apt to seek a college degree. Industries such as manufacturing, construction, retail, restaurants and hotels will see dwindling numbers of applicants. Levanon said while the number of college grads grows about 2% each year, this also means college students may find it hard to find jobs they believe fits the education for which they paid, and/or companies may inflate job requirements to demand bachelor’s degrees, where one was not necessary before.
It is time to think outside the box. Manufacturers and other employers are looking to attract new workers, and to make connections with local high schools to help build a different pathway to careers. College is not the only way. Educators and potential employees will have to think differently, too, as the jobs landscape changes. We can no longer rely on the thinking of a couple of generations ago. Change can bring opportunity, and that change has begun. All parties must be willing to adjust their mindset if that change is to help us leave the economic turmoil of the past 18 months far behind.