Do we have a worker shortage? Maybe.
For months, I’ve planned to write a column on the future of the U.S. labor market. Stacked on my desk are reports on “the gig economy,” “independent workers,” “contingent workers,” “freelancers” and the like. All signify a new, less secure labor market. Workers won’t have long-lasting career jobs, as the old post-World War II employment model promised. Now it’s survival of the fittest. Workers who can adapt to constant change will thrive. As for everyone else, tough luck.
I never wrote that column.
The main reason is that I never felt certain that this widely prophesied labor market would prevail. Indeed, the postwar employment model might make a comeback. Demographics — the ongoing retirement of the massive baby-boom generation — would make experienced and competent workers prized resources. Because the labor force would be growing only slowly, many companies would try to stabilize their employment by offering career jobs with better wages and benefits.
I still don’t know which of these models will triumph: the first reflecting a management belief that workers must be hired and fired as business conditions dictate; the second based on the notion that good workers will be scarce for the foreseeable future and smart companies will do their best to train and retain them. But I do know two things.
First, market power is swinging from companies to workers. The supply of new workers is meager, barely offsetting the loss of retiring baby boomers. Look at the numbers. From 1950 to 2016, the U.S. labor force (the number of workers multiplied by their hours on the job) grew an average of 1.4% a year, reports the Congressional Budget Office (CBO). Now the CBO projects annual growth of only 0.5%, about a third of the post-1950 average.
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