Statistical evidence suggests that a worker shortage is a very real threat to the U.S. labor market. Most analysts cite the routine reasons: demographics (the aging baby boomers and slowed population growth), decreases in immigration since the September 11 terrorist attacks, and a slowdown of economic growth and job creation . While these statistics suggest a possible reduction in the labor force, they do not take into consideration other, less tangible factors. The changing landscape with regard to how people work will simply shift. There will not be a future labor shortage; instead however, there will be a shift in how the labor force is defined.
Baby Boomers. The most frequently cited reason analysts cite for the future labor shortage is the aging of the baby boomer generation and the slowdown of population growth. The theory is that many Baby Boomers are at or reaching retirement age, and are dropping out of the workforce.
However, recent concerns over Social Security system failing, the lack of retirement planning and escalating consumer debt will force many to continue working beyond retirement age. Granted, older workers will not be able to work as much, due to health concerns and family commitments, so companies will have to find alternative work arrangements for this group of employees.
Offshoring. It is also commonly felt that the number of jobs in the U.S. is decreasing. This is not necessarily so. The trend for many companies over the last several years is to offshore many jobs to less expensive labor markets. In particular, India, the Philippines and China have been particularly attractive for their well educated, plentiful and cheap workforces. As a result, many manufacturing, IT and customer service jobs have been sent to these areas because of the tremendous cost savings they offer to companies. The number...