If there isn’t a concentrated effort by governments and companies across the US, blue-collar labor shortages will drag down the overall standard of living. The current shortage is forecasted to last through at least 2030, slashing profits across manufacturing, warehousing, and transportation. Through a new study, The Conference Board explains the underlying causes of the labor shortage and how companies are currently fighting it.
Several trends are to blame for the shortage, from large increases in disability rates to more young adults going to college instead of pursuing a trade. The current blue-collar workforce, mostly made of Baby Boomers, is retiring in great numbers. Combine these facts with a near-zero growth in the working-age population and the stage is set for a crisis. Amidst these issues, demand only grows.
The tremendous growth of e-commerce requires a strong backbone of transportation and warehousing jobs to support it. Manufacturing’s static productivity growth fuels a spike in demand for workers. And because of these trends, wage growth in professional positions is being outpaced by other occupations not requiring a college degree. While these factors make the sector highly desirable for new employees, they strain business operations and squeeze corporate profits.
A popular tactic to combat these factors is to raise salaries and wages, but that only works to a point. Harder-hit companies are overhauling their entire recruitment processes, increasing referrals and social media while shortening their recruitment processes. These are excellent strategies, but The Conference Board warns that not enough attention is given towards retaining mature workers with new incentives.
