America has a jobs conundrum. The issue isn't a shortage of jobs or a lack of workers. The problem is a mismatch of skills and available workers. The dilemma is compounded by a demographic quandary that will result in a gaping shortage of workers to fill some of society's most critical jobs.
Thousands of young people with newly minted college degrees are struggling today to find work. Reports show about 5.6% of recent college grads remain unemployed. At the same time, many American businesses can't find qualified workers to fill jobs.
The Bureau of Labor Statistics' (BLS) latest data estimates there are currently 7.36 million job vacancies in America. The number of people searching for employment is calculated to be 7.1 million. Simple math would indicate those vacancies could be whittled down by matching jobs with applicants.
However, there aren't enough job seekers with the skills required by companies that are hiring.
The Society for Human Resource Management (SHRM) published research that found about a third (32.7%) of job openings cannot be filled by someone with recent job experience in a related field. Nearly three in 10 unemployed people could not be matched to a job despite relatable experience.
Some may be thinking: AI is to blame. No question workers today are fearful artificial intelligence may endanger their jobs. Stanford policy research termed the "AI jobs apocalypse" more fiction than fact. Company announcements blaming job cuts on AI often are a disguise for softening market conditions.
Indeed, job cuts in July slowed nationally as companies stepped up hiring plans, according to data from outplacement firm Challenger, Gray and Christmas. Layoffs decreased 27% from June. Job reductions have primarily been in tech sector, where AI has been a factor cited by firms.
Demographics--not AI--will create the largest shortage of workers in U.S. history by 2032.
Georgetown University's Center on Education and the Workforce projects a shortage of 5.25 million workers with education beyond high school. About 4.5 million of these workers will need at least a bachelor's degree to meet hiring requirements, according to the new research.
Part of the problem is that the labor participation rate is tumbling. The rate measures the percentage of working age adults (18+) who are in the workforce. The latest data for June shows the rate to be 61.5%. That is a steep decline from the peak of 67.3% in 2000.
If the labor participation rate reached its historic high and unemployment remained at the current 4.1%, the workforce would increase by 12 million people, more than double the projected shortage in 2032. However, more workers doesn't necessarily mean they will have the skills needed.
Many of those 12 million potential workers would need more education and training than today's employees. The current projection indicates that 52% of those potential workers would not have the skills companies are seeking.
Georgetown's research reveals that the economy will need more accountants, construction workers, doctors, engineers, managers, nurses, teachers and truck drivers in six years than people with those skills. Some of the largest shortages will likely occur in the most critical areas.
Projections are for a shortfall of 611,000 teachers, 362,000 nurse practitioners and registered nurses, and 42,000 licensed practical nurses. High turnover rates due to burnout from the COVID-19 pandemic decimated the ranks of these professions and fewer people are interested in those jobs, Georgetown's research finds.
America also faces a skill shortage of 210,000 engineers. Research shows not enough young people are qualified and interested in these careers. Forecasters indicate there will be shortages in occupations that don't require a college degree, such as truck drivers (402,000) and construction workers (200,000).
Even these eye watering numbers don't tell the whole story.
A University of Minnesota professor of history and population studies reviewed Census Data and discovered the double whammy impacting the labor market are baby boomer retirements coupled with fewer people entering the workforce.
Professor Steven Ruggles says the result will be the labor force will shrink by 2.7 million workers or 1.3% from 2030 to 2040, according to his analysis of Census data and projections from the Congressional Budget Office.
An average of 10,000 boomers a day are turning 65 through 2029, based on Census data. In 2025, a record 4.18 million Americans turned 65. Boomers are leaving the work environment at a time when there are fewer young people entering the labor market and many don't have the same skills as retirees.
The U.S. fertility rate has been below replacement rate since the early 1970's and declined further since 2007. Currently, the fertility rate is around 1.6 annually, below the 2.1 births needed to grow the population. A reversal in fertility rates is not likely any time soon, demographers postulate.
Possible solutions to the looming labor market crisis include sharpening skills-based hiring; investing in retraining workers; expanding visa programs to prioritize immigrants with in-demand skills; aligning college degree programs with skill sets required for the future; and expanding training programs in the trades.
Artificial Intelligence could gallop to the rescue.
AI is currently automating burdensome administrative tasks, freeing workers to spend more time on more rewarding projects. AI can also accelerate training of the workforce by using tools that enhance learning on the job. AI systems can also churn out analytical data to give managers and workers more information to improve their productivity. Already, AI is being deployed in the healthcare industry, assisting in the diagnosis of diseases and reviewing MRI's and X-Rays.
And companies are just scratching the surface on AI applications.
That's why you can add data scientists--including those with computer and mathematical skills--to the list of the fastest growing occupations through 2034, according to the Bureau of Labor Statistics. The agency estimates a 33.5% growth in this occupation.
America has faced worker shortages before, as recently as 2018. A combination of increased productivity, innovation and the retraining of workers met hiring needs. Then the pandemic hit, which whipsawed the labor market. The U.S. pulled out of that quagmire too and can do it again.
