That's one way of looking at the data we've been reviewing this week. (see War 1, War 2 and War 3)

The domestic workforce in the United States is nearly 150 Million strong. Another 100 million go to work in ways that are not counted in the workforce (lawyers, doctors, contract workers, small business people). 35% of the people who work each day change their work each year. (It's not the same 35% each year.)

That's a lot of people in play.

In addition, the domestic population will grow to nearly 400 Million by 2050, a surge of 33% in 40 years. That's a lot of people, most of whom (94%) will be immigrants who arrive here old enough to join the workforce. (Remember the immigrant age distribution chart?)

So, what's all the fuss about a labor shortage?

We think it has a number of roots:

1. While a population expansion of 33% seems pretty big, the economy needs to grow by 130% over the same time just to stay out of recession. The anti-shortage thinkers insist that this hurdle can be overcome by productivity improvements. New overtime regulations expanding the group who should work OT without compensation may help in this regard. If everyone worked 100 hour work weeks, there would definitely be no labor shortage.
2. Skill mixes are changing. For example, construction supervisors must now be bi-lingual. HR Managers (and other beneficiaries of outsourcing) must have contract compliance experience and skills. In a number of categories, ready-made employees just aren't available. There may be more than enough people, just not too many with the right skills.
3. Given the changes in workforce composition (age, gender, ethnicity) that have taken place already, many in leadership (who are looking to replace the white guy who just left) have trouble understanding how to manage through cultural and language barriers.
4. The media and techniques used to reach prospective employees have undergone a revolution. The hiring manager and recruiter have a vast number of tools available to do the job. There is little quantifiable data about which works and which doesn't.
5. The personnel requisition process generally fails to account for any market factors before it is executed. By neglecting market level compensation and general local availability of resources, the requisition process causes huge amounts of waste in hiring. This waste is often seen as evidence for a labor shortage.
6. The labor force is not spread evenly around the country (or the planet for that matter). There are, in fact, shortages in one discipline or another in local economies. A national view of the question is not very useful.
7. The idea that the labor market should rapidly provide the exact set of people with the exact set of skills, temperaments, aptitudes, attitudes and work ethics is an arrogant and self serving approach. It neglects to account for the value and importance of innovation and entrepreneurship in  the development of an organization. It smacks of classism and the desire for entitlement.

So, the answer is that there is and isn't a labor shortage. To the extent that you desire a ready trained and available workforce at your whim, there's a problem. To the extent that you are willing to articulate your needs clearly and invest in the people you hire, there's not much of one.

If we are really going to continue to grow the economy at 20th century rates, we'll have to make some changes. Economies with pyramid age distribution structures are better suited for that.

On Monday, we'll look at the planning tools required to navigate future labor requirements.

John Sumser © TwoColorHat. All Rights Reserved.
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