Ron Hetrick, Sr. Labor Economist, Lightcast
In 2021, I was the lead author of a white paper titled “The Demographic Drought
” where we took a look at the current and future state of the United States Labor force. We explored how surging Baby Boomer retirements, declines in labor force participation among millennials, ebbing birth rates, and falling immigration numbers helped explain why the U.S. was facing talent shortages and near-record-low unemployment numbers.
This started a global conversation about the sansdemic. A sansdemic is otherwise known as ‘without people’ and it’s a problem the U.S. and other developed nations were – and still are – experiencing.
Jumping ahead to 2022, the United States faced historical labor shortages as the nation, flush with cash, tried to buy goods and services at a time when very few people were making goods or providing services. Inflation soared and the Federal Reserve intervened, trying to weaken the labor market only for it to have the opposite effect. Unemployment in January was the lowest non-war time rate in U.S. history.
Understanding the Boomers and their profound impact on the labor force is a critical component in unpacking what will happen over the next 10-15 years. What the U.S. has experienced over the past 2 years is merely a taste of what will become a critical shortage of workers.
Korn Ferry’s The Global Talent Crunch study
found that by 2030, the country could face a deficit of more than 6.5 million highly skilled workers. By 2034, there will be more older adults than children for the first time ever in our country. A large aging population will be relying on a shrinking and less work-involved millennial, Gen Z, and Gen Alpha.
However, there is a bigger problem. In October of 2022, Tallo, the premier early talent recruiting platform, and Lightcast partnered to conduct a study to determine what it is young adults are looking for in their future and how industries can capture that to bring critical workers to their fields.
In our study “Who is Going to do the Work?
” we surveyed 1,500 high school students about their intentions after they graduated. Between 60 – 85% of the respondents said they intended to get a 4-year degree and pursue careers more commonly associated with a bachelor's degree. This poses an extreme problem as roughly 2/3 of all jobs currently in the United States don’t need a 4-year college degree.
What does this mean?
The fallout of an entire nation encouraging their children to pursue a 4-year degree means that many industries that keep the country functioning will not have the workers they need. The huge food supply industry, utilities, construction, police and fire, garbage collection, and numerous others simply will not be able to operate in their current capacity. Most importantly, the aging boomers will need healthcare as never before and there simply won’t be enough people to staff that sector.
Because of the significant labor shortages, the U.S. will continue to see significant wage inflation in lower-skilled jobs, with many overtaking college-degreed jobs in the next decade. It is already happening in skilled trades where electricians at 25 years old are approaching and often exceeding 6-digit salaries. Restaurant tabs that were once considered excessive when over $100 are becoming and will become normal. Americans will eat out less and have fewer options when they do.
What can you do?
Our survey showed us several interesting dynamics facing young people today.
- Societal pressures from parents, guidance counselors, and friends are coercing young people who probably should not be in college to pursue it anyway. The messaging must change. Every job is valuable.
- Our respondents told us that they valued the coming-of-age experience of college just as much as the degree itself. Employers of young adults who do not go to college must determine ways of creating social networks for these people. Roughly 30% of married college couples met their spouse at their college. Colleges excel in team sports and activities. They are formidable competitors.
- Gen Z consistently says in surveys that they want jobs that “make a difference” and give them a “sense of purpose.” Most also say they want to own their own business someday. The issue is they fail to see the connection that jobs in skilled trades give them everything they are seeking and that is due to perception. Trade skill jobs are hard, are in challenging work environments, and were historically not paid well due to society not valuing them. With well-timed effective marketing from the trades, this can be overcome from both the parents’ and students’ viewpoints.
- Apprenticeships and mentorships are key to introducing students to see the value of working in a trade. 97% of our respondents said they would choose a college if it could get them an internship with a company they value. Trade and technical programs should learn from this and provide apprenticeship and/or job shadow experiences to students while they are still in high school to capture their interest early. Determining how to become valuable in the eyes of younger generations, or even people who may have become jaded with the jobs they took after college, can assist in gaining their interest. People want a life of purpose, and you have it once you can show how your trade can provide value to the world. We have reached a point in our economy and society where equilibrium seems to be broken. Policies that push all high school students toward the 4-year degree have created an imbalance in labor. In many ways, the desire to have everyone pursue a narrow set of the “best jobs,” the “best degrees,” or the “top ten careers of the future” might be misleading. The attempt to rank learning or careers according to what is hot and up-and-coming is tantamount to ranking which part of your body is most important. The point is, they are all important.
For the economy and society to function, we need balance across all careers. An electrician is just as important as an engineer. A plumber solves as many problems as a software developer, if not more.
The skilled trades have a daunting set of recruitment barriers. But there is hope. Today, even though most young people prefer college, there are opportunities that trade-based industries can take advantage of. Young people are willing to see the value in these areas if you get to them early and develop connections before they choose to pursue other sectors. To help them see and appreciate the trades more clearly, companies and community colleges should take an active role in communicating the various benefits and advantages of skilled trades.