Baseline assumptions about the U.S. labor market were formed when Baby Boomers dominated the workforce and large candidate pools made it an employer's market. A significant shortage of workers is expected within the next decade, concentrated in the next five years. For the first time in modern history, there will be more people aged 65 than aged 16, changing traditional work entry and exit patterns. Between 2024 and 2032 U.S. population growth will outpace labor force growth by nearly 8 to 1. Generational size cycles have produced alternating large and small cohorts, and massive Baby Boomer retirements have reduced workforce supply.
Today's labor market rests on baseline assumptions that were formed when the Baby Boomers dominated the workforce. Things looked eternally bright, with lots of good candidates entering the job market each year, making it an employer's market. The seller enjoyed an advantage over the buyer in terms of jobs. But a storm is coming. For numerous reasons, a significant shortage of workers is arriving in less than a decade, primarily in the next five years.
For the first time in modern history, there will be more people who are 65 than 16. These are the years people traditionally stopped and started working. Today's U.S. workplace is understaffed, and it foreshadows what is to come. Between 2024 and 2032, the U.S. population growth will outpace labor force growth by nearly 8 to 1. In other words, the U.S. will have more people, but a lower share of them will be working.
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