With millions of unemployed people across the country struggling to find work, it may seem unbelievable that there could be more jobs than workers to fill them in coming years, but a new report predicts exactly that.
A worker shortage could develop within 10 years as baby boomers reach traditional retirement age and there are too few replacement workers, according to the report published last week by the MetLife Foundation and San Francisco-based Civic Ventures, a think tank focusing on baby boomers, work and social purpose.
"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," according to the report. "If the economy continues to improve, the spot shortages will become more general, and we will experience the shortages our research projects."
How did the report's authors arrive at this conclusion? First, government analysts expect 14.6 million new nonfarm payroll jobs will be created between 2008 and 2018. Including self-employed workers, family members working in family businesses and workers in farming, the total hits 15.3 million new jobs.
Next, given the government's projected population growth and current labor force participation rates -- and assuming no major changes in immigration -- there will be about 9.1 million additional workers over the same time period. Taking into account multiple job holders, the total number of jobs expected to be filled is 9.6 million.
Finally, subtracting the projected number of filled jobs from the expected number of new jobs results in a range of 5 million to 5.7 million vacant jobs. However, using projected labor force participation rates -- baby boomers are not expected to retire at as high a rate as earlier cohorts of older workers -- there would be 3.3 million to 4 million vacant jobs, according to the report.
"While things look very dark at this moment in terms of the employment situation, unless this is an unbelievably unusual recession, we will come out of it, and when we come out of it we may find ourselves first experiencing spot shortages in key fields, such as health," said report co-author Barry Bluestone, an economist and founding director of Northeastern University's Kitty and Michael Dukakis Center for Urban and Regional Policy.
"And if we get projected growth, there could be pretty broad shortages, and we need to find a way to fill those jobs," he said.
Older workers may be the answer. "What makes me sanguine about our ability to fill these jobs is that people are not only living longer, but they are much healthier, and as a result it's more likely that we'll want to continue to work, even if we don't have financial reasons."
Still, not everyone agrees with the report's projected job shortage.
Harry Holzer, an economist at Georgetown University and the Urban Institute, said he's skeptical about a projected longer-term worker shortage. A combination of new technology and globalization could constrain job growth, he said.
"I'm willing to acknowledge that you can have shortages for short periods of time. At the occupational level, there are some areas, especially health care, where demand is outstripping supply of workers. But an economywide shortage of workers? I don't think so," Holzer said.
Labor markets adjust -- if more workers are needed then wages will increase, Holzer said. He added that part of the adjustment will require workers retiring later, a trend that has already started, in part because of better health and more workers in white-collar jobs. Insufficient retirement savings and losses in the stock and housing markets also add to the need to work longer. "All those factors would lead people to delay retirement," Holzer said.
The government projects the following job categories will see the largest employment growth between 2008 and 2018:
*Registered nurses will add 582,000 jobs;
*Home health aides will add 461,000;
*Customer services representatives will add 400,000;
*Food preparation and serving workers (including fast food) will add 394,000;
*Personal and home care aides will add 376,000;
*Retail salespeople will gain 375,000;
*Office clerks, general, will gain 359,000;
*Accountants and auditors will gain 279,000;
*Nursing aides, orderlies and attendants will gain 276,000;
*Postsecondary teachers will gain 257,000.