Imagine a not-too-distant future when millions and millions of jobs go unfilled.
Instead of dozens of applicants for every job. There are dozens of jobs for every applicant. And one of the most frightening costs America faces is $3 trillion in lost economic output because there just aren’t enough workers to meet rising labor-market demands.
Welcome to the year 2018, as forecasted by Barry Bluestone, dean of the School of Public Policy and Urban Affairs at Northeastern University in Boston and Mark Melnik, Deputy Director for Research at the Boston Redevelopment Authority.
Suddenly, the baby boomers are retiring en masse and there just aren’t enough people to fill their desks. This cheery vision of roughly five million potential job vacancies is brought to you by the MetLife Foundation and Civic Ventures, a national think tank. And it sure beats the cannibalistic vision of 2022 that Charlton Heston brought to life in the 1973 film “Soylent Green.”
Bluestone and Melnik marshal plenty of demographic and economic data, as well as compelling analysis, to support these predictions, but even they concede their findings are surprising.
“With nearly 10 percent of the American labor force unemployed and another 7 percent so discouraged by their job prospects … it may come as something of a surprise that within less than a decade, the United States may face exactly the opposite problem,” their study reads.
It was indeed a surprise to Larry Christensen, a retired auto worker in Michigan who is in regular contact with out-of-work acquaintances.
“Labor shortage my butt,” he wrote in an email after I told him about the study. “Productivity is far too high … Maybe a ‘shortage’ of people ready to work for a nickel an hour. Is that what they mean?”
I do not know the future, Larry. But I do know the past.
In October 2003, I wrote about similar predictions of an extreme labor shortage hitting us … oh, at right about this very moment. In 2003:
Not surprisingly, Business 2.0 became Out-Of-Business 2.0 in October 2007.
Despite all the jobs being shipped to India and China, and the mighty influx of immigrant workers from all over the world, and all the unprecedented productivity gains, the argument behind the Great Labor Shortage of 2010 was the same: The oldest boomers were 57 in 2003 and would turn 64 in 2010.
The Beatles: Will you still need me, will you still feed me, when I’m 64? The labor market: No!
Wharton business school professor Peter Cappelli swiftly debunked the 2010 labor shortage myth when I contacted him in 2003. Cappelli said then exactly what Larry the retired auto worker is saying now: “If productivity is growing at 4 percent a year, and the economy is growing at less than 4 percent a year, you actually need fewer workers each year.”
As baby boomers retire, the economy and labor demand will shrink, Cappelli predicted, and this is exactly what happened. But this time, it’s different, Bluestone said in a phone interview.
“We’re going to need millions of people working in the health-care sector because this huge baby boom generation is entering the age when their health-care expenditures are going to soar,” he said. “They may not be buying as many cars and dishwashers and clothing or restaurant meals … but the big difference is going to be the health-care sector.”
Aging baby boomers also will require more services from state and local governments, and their children and grandchildren will be flooding the schools, generating jobs in education.
History shows the recession won’t last forever, Bluestone said, and when it ends, job growth inevitably will follow as it has following past recessions.
Cappelli, however, said he stands by the analysis he offered me in 2003, and isn’t surprised to see the labor shortage prediction resurface again: “People so want to believe this story that it just won’t die.”
Let’s hope Capelli doesn’t prove right once again.
Although Bluestone’s vision isn’t exactly utopian: More government agencies to manage more social problems, more nonprofits not making profits, more teachers teaching aspiring teachers, and more health-care workers to deal with the sick and the dying.
Bluestone’s study says there will be plenty of work available for those 55 and older: Registered nurses, home-health aides, customer-service reps, food-preparation workers and servers, and personal and home-care aides.
Geriatrics taking care of geriatrics.
Maybe Charlton Heston wasn’t so far off: “Soylent Green is people!”
Al Lewis: 212-416-2617, al.lewis@dowjones.com or
