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Why the Shortage of Skilled Labor Will Get Worse

Shortage of Skilled Labor
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EDITOR NOTE: Despite the immense availability of jobs to match the vast numbers of unemployed workers, the labor market ironically seems tight because there are supposedly not enough workers available to fill the positions. The GOP has blamed President Biden’s enhanced unemployment benefits as the major disincentive preventing people from going back to work. Quite possibly right. But there’s another factor in play, one that hardly gets any mention. It has everything to do with the aging population. And according to the author below, the shortage of skilled labor is only going to get worse over time. So, how might this forecast the Fed’s interest rate suppression efforts if it can’t get the economy near maximum employment? Are we looking at a prolonged scenario of easy money--and the debt, spending, and high levels of inflation that go with it?

Companies complain about the lack of skilled workers. What's going on?

Shortage of Skilled Labor

Employment Population Ratios

  • The percentage of people age 16-19 who are working bottomed at the end of the great recession and has risen steadily since. 
  • Age group 16-19 is the only employment age group that is above the pre-Covid level.
  • Employment in age group 65+ has risen nonstop until Covid.
  • Employment in age group 60-64 took a deep dive. 

Employment Change in Thousands 

Shortage of Skilled Labor
  • Since February 2020, employment in age group 60-64, a highly skilled age group, is down 5,364,000.
  • Since February 2020, employment in age group 16-19, a highly unskilled age group, is up by 72,000. 
  • Age group 16-19 is the only age group whose employment is above the pre-Covid high. 

Population vs Population in January 2000 

Shortage of Skilled Labor

Key Population Stats Since January 2000 

  1. The total population has increased by 49.693 million.
  2. The population in age group 55 and older is up by 40.586 million.
  3. The population in age group 60-64 is up by 10.465 million.
  4. The population in age group 16-54 is up by only 9.107 million

Looking Ahead 

  • In the next 5 years, over 10 million workers will move from age group 60-64 into age group 65+ (point 3 above)
  • The employment population ratio of age group 60-64 is 48.99% down from 56.11% pre-Covid.
  • The employment population ratio of age group 65+ is 14.27% down from 20.10% pre-Covid.

The shortage of skilled labor is poised to get worse.

Original post from MishTalk

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All articles are provided as a third party analysis and do not necessarily reflect the explicit views of GSI Exchange and should not be construed as financial advice.

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