A new study by labor market data provider Lightcast predicts a stark labor shortage in the United States, with an estimated shortfall of 6 million workers by 2032, Bloomberg reports.
The study cites a confluence of factors driving this gap, including retirements, mismatches between available workers and in-demand jobs, and a decline in workforce participation among men.
“Over the next five to seven years, our labor pool’s growth will not match our population’s,” stated Ron Hetrick, an economist at Lightcast. “We will increasingly have more consumers than producers, driving price hikes and product shortages.”
The study reveals that older workers, who fueled job expansion in the two decades preceding the pandemic, are no longer driving growth. Since 2020, nearly 4 million out of 5 million workers leaving the workforce have been over 55.
By 2027, the number of Americans turning 65 – a traditional retirement age – will surpass the number turning 16 for the first time, raising concerns about a potential lack of new entrants to replace retirees.
Another looming issue is the mismatch between available workers and in-demand jobs. The workforce is expected to become younger, more educated, and more female, yet these groups may not align with industries projected to require more labor, such as healthcare, construction, and skilled trades like plumbing and car maintenance.
The report outlines the troubling trend of prime-age men disappearing from the job market. Substance abuse and incarceration are cited as significant contributors, removing 4.6 million Americans from the labor force. This decline coincides with a rising number of openings in “critical, male-dominated skilled-trade jobs.”
The study stressed that the majority of drug-related deaths or addictions occur among young men. Additionally, alcohol is responsible for around 232 million missed workdays, equivalent to 112,000 full-time workers absent for an entire year. Since the pandemic, the number of Americans not employed and not actively seeking work has risen from around 95 million to 100 million.
The report posits that immigration will likely be crucial to fill the gap left by US-born prime-age men. Certain industries, like healthcare, heavily rely on immigrant workers, with 18% of healthcare workers coming from outside the US, including one in four doctors and one in five registered nurses.
