Retiring boomers, missing workers play into labor shortage

Boomers are Retiring: A study published by the Pew Research Center found that one in four of all workers on January 1, 2010, will become retirement eligible and leave the workforce by December 31, 2029. This means that 79,000,000 baby boomers will be leaving the workforce over the next 20 years. At this point, we are halfway through this mass exodus.

Missing Workers: Princeton University and the National Bureau of Economic Research report that the rise in addiction, due in part to opioids, has contributed to the decline in the U.S. Labor Participation rate. Another decline in worker participation is due to an increase in the US incarceration rates. These rates rose from 220 (per 100,000) in 1980 to 756 (per 100,000) in 2008, even though crime rates fell by 30% between 1991 and 2001. Combined, these two trends mean fewer workers, and growing demand for workers in the incarceration and recovery, healthcare, and wellness industries.

Declining Birth Rates: Economic stresses, and the costs of raising children have contributed to a declining birth rate. The U.S. ‘total fertility rate’, defined as the estimated lifetime fertility of all U.S. women 15 to 44, dropped to 1.73 in 2018. The U.S. has not seen a replacement fertility rate, of 2.1, since 1971. Last year the U.S. general birth rates fell another 4%.

There is not a single reason that it is hard to find workers. Another example is early retirement plans that replaced an aging workforce with younger, lower-cost workers, which have increased the decline in the supply of workers over the past 50 years. Undoubtedly, the worker shortage began before Covid-19, and it certainly has made employers more aware of the issue. Let us not be quick to blame the current shortage of workers on Covid-19, and instead focus on the fact that the era of a surplus of workers is over and that the shortage is not going away when unemployment benefits are terminated.

MU’s Labor and Workforce Development program is supporting a multi-state effort to develop programming that will enable extension educators to more effectively work with their communities to address rural workforce challenges. This initiative—funded by the Ascendium Education Group and managed by the Association of Public and Land-Grant Universities (APLU) and the North Central Regional Center for Rural Development at Purdue University—will support extension efforts to design rural career pathways that meet both the specific needs of individual communities and the particular needs of rural low-income and non-traditional learners.

As part of this effort, MU Extension Labor and Workforce is developing a manual and tools that will help extension educators more effectively assist rural communities to use labor market information and more fully inform their workforce development strategies. These resources will show extension educators how to use secondary and primary data to explore their specific region’s current and future workforce needs, with a focus on creating opportunities for low-income workers. Although primarily intended for extension educators, these materials will be useful for anyone seeking to improve their general data literacy. Extension will make this manual and the complementary materials available once complete later this fall.