RTWBC Presentation March, 2017
Baby boomers are indeed retiring in large numbers Source: U.S. Census
The labor market is getting tighter “Race against the machine” published First KBI Note: Shaded areas represent recessions. Sources: Bureau of Labor Statistics, CBO
Very weak growth in working age population is projected for the next 15 years Annual growth rate in the working-age population (18-64) and its contributing factors Annual percent change Forecast Source: The Census Bureau; calculations by The Conference Board
Time to fill a position much higher than pre-recession highs: time to adjust requirements? Note: Shaded areas represent recessions. Sources: DHI Group, Bureau of Labor Statistics
More workers are quitting Note: Shaded areas represent recessions. Source: Bureau of Labor Statistics
The trend in wages will keep moving higher Note: Shaded area represents a recession. Source: Bureau of Labor Statistics
The Conference Board’s Labor Shortage Index is a tool for comparing the risk of labor shortages in the coming decade across occupations: Three sub-indexes: Demand/Supply Gap Projected employment growth Projected replacement (retirement) Projected new entrants Education and Skills Average years of education Typical years of education required Typical year of experience required Typical years of on-the-job training required Measure of occupational skill Flexibility Probability of offshoring Percent teleworking Probability of computerization Measure of occupational certification Percentage of workers who are immigrants Percentage of workers who are part time In addition: higher unionization share lowers risk of shortages
Risk of labor shortages by occupation Health related jobs are at the highest risk Ageing and healthcare reform leading to rapid growth Skilled trade labor at a high risk Large number of retirements and few new entrants Large variation in the risk of shortages in STEM occupations High risk of shortages in mathematical jobs Shortages are expected in computer jobs but some offsetting factors: Relatively small retirement rate in computer jobs Many new entrants Many immigrants High flexibility in computer jobs – teleworking, offshoring, no certification needed Labor shortages are a bigger issue in labor intensive industries
Preparing for the coming storm: What employers can do Anticipate retirement of older workers Evaluate future labor market conditions by Occupation and location and adjust policies Location related solutions Relocate if necessary Offshoring Remote working and Teleworking Contingent workers and ‘gig economy’ platforms Tapping untapped pools of workers Immigrants Older workers delaying retirement Underutilized workers
Disability rates among those under 65 are highest in states that specialize in declining industries like coal mining Share of population under 65 who are not in the labor force due to disability Sources: Current Population Survey, calculations by The Conference Board
Steady increase in the share of teleworkers
Some jobs could easily be done remotely