Labor Shortages to Have Uneven Effect Across U.S.
September 18, 2015 | The Conference BoardEstimated reading time: 3 minutes
Companies in high-risk U.S regions need to start planning now for deep and long-lasting labor shortages, according to a new Executive Action report published today by The Conference Board. The US Labor Supply Problem: Which States are Most at Risk? is the latest piece in a major research series tracing the global impact of aging populations and shrinking workforces over the next decade and beyond.
“We are now in a period of unusually slow working-age population growth—nearly zero through 2030, according to the U.S. Census Bureau,” said Gad Levanon, Director of Macroeconomic Research at The Conference Board and a co-author of the report. “The underlying demographic trends mean even delayed retirement and higher participation rates will do little to stop labor demand from far outstripping labor-force growth. But while adjusting to this reality will require national thinking and perhaps a federal policy response, the onset and impact of the worker shortage will vary widely across the U.S. For many places in the Northeast and Midwest, the time is now.”
Synthesizing the latest data, The US Labor Supply Problem breaks down the 2015–30 labor-market outlook for each of the 50 states. Among the key findings:
- Immigration may be a wildcard—and game-changer—for expanding labor supply to meet expected demand. While factors like birth and death rates, population distribution, and retirement expectations are only bent—if at all—over decades and generations, net migration can be increased considerably in the relatively short term. While unlikely in the current political climate, reform that boosts visas for skilled workers and regularizes the status of undocumented residents could substantially mitigate projected labor shortages across the country.
- The size and shape of working-age populations vary widely across states, and will diverge further. To calculate where they are headed, the report compares the current size of two age groups as a proportion of the working-age population: 3–17 year olds, whom will be entering the workforce over the next 15 year; and 50–64 year olds, whom be will be leaving. With its unusually high fertility rate, the younger group in Utah outnumbers the older by over 18 percentage points. Texas (+7.77 points), Idaho (+6.36), and Arizona (+3.94) also have large rising cohorts of young workers. Throughout the Northeast, by contrast, 3–17 year olds are substantially outnumbered as a proportion of the population by 50–64 year olds, with the problem most acute in Maine (−10.91), Vermont (−10.35), and New Hampshire (−8.81).
- The combined effects of age distribution and migration will mean serious labor-force contraction in some states, relatively healthy growth in others. Nationwide, the working-age population is projected to grow 5.2 percent between 2015 and 2030. However, while states like Nevada, Arizona, and Texas may see their working-age populations grow by over 20 percent, others—largely in the Northeast and Midwest—could see contraction approaching 10 percent. (These projections are based on historical trends and will likely be counteracted somewhat by worker movements adjusting to demand.)
- States at the highest risk of labor shortages are those that both have relatively low unemployment rates now and projected weak labor force growth in the future. These states are concentrated in the Midwest and New England, but also include Montana, Kentucky, South Carolina, and Oregon. By contrast, favorable demographic trends and relatively high unemployment remaining from the Great Recession reduce the likelihood of serious shortages in California, Arizona, Nevada, and other Southwest states. A unique case, Texas has extremely tight labor markets now, but a long-term outlook moderated by high numbers of youth and migrants entering the workforce.
- Effects of a tightening labor markets are already being felt in many locales, even as others continue to struggle with high unemployment. Businesses must take these forces into account in their planning, and work with policymakers to improve job skills and labor-force participation in the areas in which they operate. Given sufficient private- and public-sector attention, the size of the labor market and its low barriers to worker movement may ultimately help the U.S. weather the challenge of aging populations better than other advanced economies like Europe and Japan.
About the Conference Board
The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world’s leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States.
Suggested Items
Nano Dimension Refreshes Corporate Governance by Appointing Major General (Ret.) Eitan Ben-Eliahu to the Company’s Board of Directors
04/16/2024 | Nano DimensionNano Dimension Ltd., a leading supplier of Additively Manufactured Electronics (AME) and multi-dimensional polymer, metal & ceramic Additive Manufacturing (AM) 3D printing solutions, today announced that Major General (Ret.) Eitan Ben-Eliahu is joining its Board of Directors.
Marcy's Musings: The Growing Industry
04/16/2024 | Marcy LaRont -- Column: Marcy's MusingsAfter decades of steady decline in the U.S. and Europe, the PCB industry is finally growing, especially in China Plus One countries. The U.S. for example, which seemed to have abdicated its title as the world leader in innovating high-technology cutting-edge manufacturing processes, is now in a race to regain what it lost and then some. The PCB fabrication industry is growing in the West, thanks to DoD funding, the CHIPS and Science Act, and hopefully, the passing of HR 3249, the Printed Circuit Board and Substrates Act.
PCB007 Magazine April 2024 — The Growing Industry Issue
04/15/2024 | I-Connect007 Editorial TeamAfter more than two decades of steady decline in the U.S., the PCB industry is finally growing in the West thanks to the CHIPS and Science Act, DoD funding, and hopefully, the passing of HR 3249, the Printed Circuit Board and Substrates Act. The U.S. is now in a race to regain what was lost and then some. But what does “growing” look like for the organizations that have received DoD funding, and for the rest of us? How can we sustain this growth?
An Ultimate Goal in Sustainability: Recyclable PCBs
04/11/2024 | Marcy LaRont, PCB007 MagazineWho doesn’t believe in recycling? “Re-use, repurpose, recycle” has been a drumbeat for more than two decades. Our children learn about it in primary school. Full university departments devoted to environmental science and sustainability in universities forward their discipline for the world's benefit. In theory, we all get behind the concept of recycling, even if the nuances of execution may fall short.
MacroFab Announces Addition of Gordon Rapkin to Board of Directors
04/10/2024 | PRNewswireMacroFab Inc., the operator of North America's largest technology platform for electronics manufacturing, has announced today the appointment of Gordon Rapkin to its Board of Directors as Chairman.