NEW YORK, Sept. 2, 2014 /PRNewswire/ -- Serious labor
shortages in the world's advanced economies will create
unprecedented challenges for business leaders and policymakers over
the next fifteen years and beyond, according to a comprehensive new
report released today by The Conference Board. From Not
Enough Jobs to Not Enough Workers forecasts the impact of
aging populations to compound rapidly as increasing numbers of baby
boomers depart workforces. It draws on first-of-its-kind analysis
of the relative risk of shortages in myriad individual labor
markets, including 32 national economies, 266 industries and 464
occupations in the United States,
and 40 occupations in Europe.
"Mature economies are facing a historical turning point: for the
first time since World War II, working-age populations are
declining," said Gad Levanon,
Director of Macroeconomic Research at The Conference Board and a
co-author of the report. "The global financial crisis and its
aftermath—stubbornly high unemployment in many countries—have
postponed the onset of this demographic transformation, but will
not prevent it from taking hold. Companies in the U.S.,
Europe, and elsewhere must begin
planning now for an environment in which difficulties recruiting
and retaining workers will make it significantly harder to control
labor costs without losing labor quality."
Jobs—Now Hard to Find, Soon
Hard to Fill
In examining likely labor-market trends in dozens of advanced
economies, the report draws particular distinction between
short-term outlooks—which reflect the continued impact of the Great
Recession on various countries—and long-term forecasts rooted in
demographic fundamentals. Indeed, while current labor markets in
mature economies are not particularly tight overall—wage growth and
labor turnover both remain below prerecession levels—this aggregate
picture conceals huge variation between countries, with rapid
reversal from labor surplus to shortage in many.
This growing labor-market tightness can be traced in the
gap between current unemployment and the estimated natural rate
of unemployment. Already, Canada, Germany, Japan, and South
Korea have reversed any effects of the recession and fallen
below their natural rate of unemployment. The United States and United Kingdom are likely to follow in
2014–15, while countries like Australia, Sweden, Belgium, and Denmark will cross the threshold by 2016–17.
The hardest-hit European economies—Greece, Spain, Italy,
and Portugal—as well as France
will likely retain slack labor markets for longer, with natural
rates of unemployment unlikely to be reached until after 2018.
To determine long-term trends, From Not Enough Jobs to Not
Enough Workers introduces a Labor Shortage Index which
combines current labor-market tightness with future demographic
developments factors to predict the likelihood of countries
experiencing labor shortages in 2025:
- Germany faces the
largest risk of labor shortages among 32 countries compared, based
on negative projected labor-force growth and an unemployment rate
already below the natural level. Germany's highly integrated Central
European neighbors—including Hungary, Poland, Austria, Slovakia, and the Czech Republic—face risks
nearly as high.
- Despite the severity of the economic crisis in Mediterranean
countries, they may in fact see labor shortages by 2025.
With minimal productivity growth and a large working-age population
decline projected, Italy is at
particularly high risk.
- The Asia-Pacific
picture is mixed. Already experiencing one of the world's tightest
labor markets, Japan faces similar demographic pressures as
Germany in the decade ahead. High
productivity growth should moderate the risk in South Korea.
- The risk of labor shortages in the United States will be moderate in a global
context, as its working-age population grows minimally—but faster
than most mature economies due to immigration. Risks in the
U.K., France, and
Canada will be broadly
comparable to the U.S.
Ground Zeroes for the Looming Labor Shortage
Drilling
deeper into country-wide data, the Future Occupational Labor
Shortage Index introduced in the report identifies the
industries most likely to face a scarcity of qualified talent over
the next decade. The interaction of two factors—the speed of
employment growth and the net number of new job-market
entrants (or departures)—determines the level of risk for any
particular occupation.
Occupational data from the United States indicates that future labor
shortages will cluster around three major categories of
concern:
- Health-related occupations. The same aging of the U.S.
population that will curtail working-age population growth to as
low as 0.15 percent by 2030 is also driving up demand for
medical workers. At the same time, high education and
experience requirements limit entry into the job market. The result
is a dearth in many healthcare professions, including occupational
therapy assistants, physical therapists and therapist assistants,
nurse practitioners and midwives, and dental hygienists. Among
doctors, optometrists and podiatrists are the specialists most at
risk of shortage, with the general physicians and surgeons category
not far behind.
- Skilled labor occupations. These jobs typically require
more than a high-school education, but not a bachelor's degree.
Unlike healthcare, the primary driver of shortages here is not
increased demand—employment growth is expected to be low in the
coming decade—but instead a rapidly shrinking supply of young
people entering these fields as increasing numbers retire.
Skilled labor occupations most at risk include water and wastewater
treatment plant and system operators, crane and tower operators,
transportation inspectors, and construction and building
inspectors.
- STEM occupations. U.S. policymakers have long been
concerned about shortages in science, technology, engineering, and
mathematics, but many of these fields rank surprisingly average in
a national context. Moderating the risk of shortages is the
relatively high number of young entrants compared to
baby-boomer retirees, as well as the large proportion of new
immigrants in STEM jobs. Moreover, strong productivity
growth means that output will continue to expand in areas like
information technology, telecommunications, and high-tech
manufacturing even as workforces in these jobs are expected to
shrink. Nevertheless, certain STEM fields—including mathematical
science, information security, and civil, environmental,
biomedical, and agricultural engineering—do face significant
shortages.
"Our extensive database of occupational data points us to the
U.S. industries most at risk of labor shortages," said
Levanon. "Topping the list are: healthcare, including hospitals and
nursing facilities; transportation industries, including ground
passenger, water, and rail transport; utilities; social assistance;
and mining and construction."
"European occupational and industry data reveal a similar
profile of risks, with social services, health professions, and
medium-skilled trade occupations facing impending labor shortages,"
said Bert Colijn, Senior Economist,
Europe at The Conference Board and
a co-author of the report. "STEM jobs will also see higher
pressures than in the U.S., while the low-skilled occupations that
form the crux of the current unemployment crisis in much of
Europe are unlikely to see higher
demand. This puts the onus on governments, education systems, and
business to retrain workforces in the decade
ahead."
Join the conversation on Twitter. @Conference
Board | #LaborShortage
For complete details visit
www.conferenceboard.org/laborshortages.
Report: From Not Enough Jobs to Not Enough
Workers
What Retiring Baby Boomers and the Coming Labor
Shortage Mean for Your Company
(Research Report
R-1558-14-RR)
By Gad
Levanon, Bert Colijn,
Ben Cheng, and Michael Paterra
Related: International Comparison of Annual Labor Force
Statistics
part of The Conference Board International Labor Comparisons
(ILC) program
https://www.conference-board.org/ilcprogram/laborforceannual
About the Conference Board
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practical knowledge they need to improve their performance
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