The Rising Storm
Building A Future-Ready Workforce to Withstand the Looming Labor Shortage
There's A Storm Coming. Are You Ready?
When worker shortages, a wage-price spiral, and high turnover rocked the labor market in 2021 and 2022, they weren't part of a one-time pandemic disruption: they were the first gusts of a coming storm that will hit in the decade to come.
The Baby Boomers are retiring, and fewer younger workers are coming to take their place, and this is leading to shortages in industries across the economy. So what can be done to build a future-ready workforce in the face of this historic shift? The Rising Storm provides the answers.
Conditions Forming: The Baby Boomers' Labor Market
To understand the coming labor force crisis, we need to first understand the workforce conditions that shaped the Baby Boomers’ attitudes and expectations, which in turn shaped the labor market we’re living in today.
Key Themes
Generational Shift
The Baby Boomers powerfully shaped every institution they touched. Born between 1946 and 1964, this enormous cohort of 76 million Americans is now 60-78 years old in 2024, and they are retiring in droves from the labor market they built.
Exponential Growth
Boomers' coming of age in the late 20th century coincided with women’s entry into the labor force, meaning the working population skyrocketed.
Fierce Competition
The resulting labor market was defined by scarcity, and employers held the upper hand. Workers, as a result, were highly motivated to pursue new credentials and training, move across the country, and make personal sacrifices for their careers.
Understanding the Boomer Worldview
Imagine you are a young adult entering the workforce during the 1970s and 80s. You are one of millions looking for work, and there aren't enough jobs to go around. From 1973 to 1997, the US unemployment rate never drops below 5%. Employers are able to take their pick from an influx of highly skilled, ready-to-work job applicants. Here's what you may be thinking:
"Higher education will help me get the job I want."
"I need to weigh the benefit of a family against its cost to my career."
"I will move to get the job I want most."
"I do not want immigrants coming to steal jobs."
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The Outer Bands: Today's Labor Market
The unprecedented scale of Boomer retirements is upending a labor market used to an abundance of workers. The tight and turbulent labor market from 2021-2023 foreshadowed the disruption ahead, like the outer bands of a hurricane.
Key Findings
The Silver Tsunami
Younger generations approach their lives and careers much differently than their grandparents did, meaning the huge wave of Boomer retirements also marks a cultural shift in the workforce.
Increasing Dependency
Labor force participation for working-age men has been falling, meaning a smaller share of workers must support a growing older population.
Storm Signals
The US is highly educated, but many crucial jobs don't require a college degree—our workforce growth is misaligned with demand.
Boomers are Retiring in Droves, and Earlier than Expected
Out of the 5 million people who have left the labor force since 2020, 80% are over the age of 55. Just as the Baby Boomers’ entrance into the labor market created a surge in the number of available workers, their retirement is leaving behind a workforce whose numbers are not keeping pace with the US population.
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Landfall: The Decade Ahead
Before the end of the decade, the US will face a shortfall of roughly 6 million workers. For the first time in history, more people will turn 65 than 16, depleting our working population while our overall population increases. With labor force participation dropping, how can we make up the difference?
Key Findings
The Math Problem: Not Enough Workers To Go Around
Comparing future workforce projections to present labor-market needs, demand already dwarfs supply. That math doesn't add up.
How Can We Make Up for our Declining Workforce?
Female participation and immigration will be crucial for meeting workforce needs—because automation is years away from meaningful help.
Landfall: Why the Storm Will Hit In Under 10 Years
As declining birth rates and rising retirements squeeze the labor force, the US faces a deficit of millions of workers before the end of the decade.
Looking Ahead: What Can the US Learn from Japan
Japan's working population has been in decline for decades, and the US can look there for lessons about how best to prepare for the years ahead.
Who Is Going To Do The Work?
The Bureau of Labor Statistics projects 2.6 million prime-age workers annually through 2032. But if current education trends hold, roughly two thirds of those remaining workers will have a college degree, leaving just 90,000 net new workers without a BA per year. Lightcast job posting data tells us there are 850,000 openings right now in food, community service, and construction. How can 90,000 workers meet the need of 850,000?
A shortfall so dramatic means the need to prepare is urgent.
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Preparing For The Storm
No perfect solution can prevent the coming shortfall of workers, just like nothing can stop a hurricane from forming. But after seeing the forecast of what’s ahead, we can make preparations that mitigate its effects. We can start by reframing the narratives that have shaped our approach to the labor market for decades.
How Work Could Get Done
If we understand that the coming years will not enjoy the abundance of workers that past decades did, then everyone’s approach to the labor market will need to change as a result, and that differs by industry.
If you don’t have enough workers to do the work your business needs, what can you do?
Four Options For Our Future
Local Workforce Development
With fewer workers available, companies will need data-driven strategies both to compete in the open market for talent or to develop the skills of their existing workforce.
Globalization: Push Work To Other Countries
The rise of remote work has opened the door to more globalization in more industries. As US population growth slows, reliable global data can show you where to invest.
Automation
AI won't replace anyone's job anytime soon, but automation can help improve efficiency in many industries that are running low on talent. Specific industry data can reveal if this is a viable solution.
Immigration: Pull Workers in from Other Countries
The US has shown it cannot sustain its workforce with US-born workers, so immigration will remain the most important path forward.
Healthcare
Healthcare desperately needs more workers, and is already facing massive shortfalls across the country. The aging US population puts healthcare in an especially challenging position, because older adults need more of it than younger populations—making it vitally important to expand talent pipelines.
Food & Hospitality
Even though the US working population is growing more slowly, the population overall continues to rise—and everyone needs to eat. More than most other sectors, both food and hospitality rely heavily on young and immigrant workers, making these vital industries especially vulnerable to the storm ahead.
What's Next?
Industries like healthcare and food supply need to be ready for extreme weather, and they're not the only ones. But panic doesn’t help anyone—preparation does. The Rising Storm was written not to raise alarm for its own sake, but to inspire action. The issues raised here require response from governments, educators, and businesses.
You can’t build a workforce strategy that can withstand the wind and rain if you’re only looking at the sunny skies overhead. A future-ready workforce needs to be ready for whatever challenges lie ahead, and that means preparing for them now.
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