“Forget those grim unemployment numbers. Demographic forces are about to put a squeeze on the labor supply that will make it feel like 1999 all over again.”
–The Coming Job Boom, Business 2.0, September 2003
I’ve been meaning to post a response to this article, which I linked to on Monday. I find myself disagreeing with both the thesis and methodology of this writer’s perspective:
“The cause of the labor squeeze is as simple as it is inexorable: During this decade and the next, the baby boom generation will retire. The largest generation in American history now constitutes about 60 percent of what both employers and economists call the prime-age workforce — that is, workers between the ages of 25 and 54. The cohorts that follow are just too small to take the boomers’ place. The shortage will be most acute among two key groups: managers, who tend to be older and closer to retirement, and skilled workers in high-demand, high-tech jobs.”
It’s a rather flawed argument, as it fails to acknowledge the other side of the balance sheet.
When the Boomers retire from work, they also will be retiring, in large part, from consuming. It’s no accident that so much advertising is aimed at the 18-35 demographic – that’s the fattest part of the consumer bell curve; Peak earning power may be in your 50s, but peak spending power – new homes, furnishing, cars, clothes – is much younger.
That’s the weakness of the coming job boom argument. Certainly, a few age-specific sectors will see an increase; think health care, pharmaceuticals, assisted living facilities, and hospitals. The overall impact on the economy will be to experience a slowdown in demand for a variety of good and services. These two are very unlikely to offset each other.
The article also makes mention of the areas which will be experiencing the biggest growth in hiring (see graphic).
Few of these positions are heavily filled with boomers; Their retirement will be mostly irrelevant to new job openings in these fields – they are much more likely to grow organically.
Source: The Coming Job Boom
By Paul Kaihla, September 2003 Issue
thanks to Business Pundit for the pointer