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Labor Shortage 4

(August 20, 2007) Colin Kingsbury is one of my favorite thinkers in the industry. Willing to invest his considerable intellectual resources into the industry's ongoing conversation, Colin keeps the edge of the discussion razor sharp. Recently, he vented his inner Doberman:
This line of thought was provoked by John Sumser's Labor Shortage 3 article, which casually lobs this assertion over the wall as if the author was stating a law of physics:

"As mentioned in yesterday's article, there will be 60 Million new workers in the USA over the next 20 years. That's a 20% growth in the labor supply. Unfortunately, we need about 70% growth just to stay out of recession."


The relationship between population and economic growth is murkier and filled with more wild-eyed speculation than the waters of Loch Ness. Add the words "My gut tells me" after "unfortunately" in the paragraph above and you get something a lot closer to objective reality. (RecruitingBloggers)

As everyone knows, being the COO of a small Applicant Tracking Systems company makes you a de facto economist. Kingsbury goes on to cite an endless procession of economies that may or my not prove the correlation between population growth and economic growth. Maybe he's the next Milton Friedman.

I don't know exactly what the correlation between population growth and economic growth is.  I do know that we have had relatively uninterrupted growth in both the population and the economy. If we keep our punitive immigration policies in place, the standstill will come sooner. While the depth and meaning of the labor shortage is hard to pin down, its existence is not. What I do know is that population growth is slowing and headed for a standstill. I do know it will have a large economic impact.

Meanwhile, we don't seem to have a conversation about what happens when population growth slows and stops. That a change is coming is without doubt, what it will be is subject to speculation. That we are already in it is clear. At a minimum, there is a dramatic mismatch between expectations for the availability of certain skills.

In the 20th Century, growth in population and economics were a given. The reality at the trench level was that Baby Boomers had to compete heavily with each other. Growth came as a result of a huge bulge, the proverbial pig in the python. There were five workers competing for every promotion. It took a dozen years of work for the first real management positions to be open.

Today's native born workers do not have to compete that way. They have been deeply schooled in cooperative problem solving and project work. They relax and make way for the more entrepreneurial immigrants. They take management slots in their 20s because the pieces of the labor shortage are already in play.

Colin Kingsbury does us a service by knocking the legs out from under a simplistic argument. The trick here is figuring out how to articulate the problem in an actionable way. Screaming about a perilous shortage or a prolonged armed conflict for talent simply doesn't present reasonable management information.

There is a labor shortage. It's just not the one you think it is.

John Sumser © TwoColorHat. All Rights Reserved.
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