Mar 17, 2020

The US labor shortage — especially for blue collar workers — will continue through at least 2030, according to a new study released by The Conference Board.

It released a study is based on a survey of more than 200 human resource executives. Findings included 85% of companies in “mostly blue-collar industries” reported recruiting difficulty compared to 64% of companies in “mostly white-collar industries.”

The Conference Board also noted that in just 10 years, the US went from the recession to one of the tightest labor markets in history.

“The result is a labor market with critical shortages, especially for blue-collar and manual services employers who are experiencing much tighter labor markets than employers of highly educated white-collar workers — the exact opposite of prevailing trends in recent decades,” according to the study.

Causes of the blue-collar labor shortage include a shrinking supply of workers and soaring demand.

Factors driving the shrinking supply include:

  • The baby boomer exodus. Baby boomers perform much of the nation’s blue-collar work, but they are leaving the workforce in droves.
  • Dismal growth in the working-age population. The working-age population has largely stopped growing.
  • Disappointing recovery in overall labor force participation. The tight labor market has brought more individuals into the workforce, but participation hasn’t grown fast enough to prevent it from further tightening.
  • Men without a college degree are less likely to work. Their declining workforce participation results, in part, from more of them being single, living with their parents and having less of a need to earn an income. 
  • Large increase in disability rates. The share of people not in the labor force due to disability has soared and is now at a record high, with a strong concentration in the South and the Midwest.
  • More young adults are avoiding trades, pursuing college instead. Meanwhile, the number without a bachelor’s degree — those who typically choose blue-collar jobs — continues to shrink.
  • Young adults are much less likely to be in the labor force. The decline in labor force participation of 16- to 24-year-olds significantly reduces the supply of workers in jobs that hire young, less-educated workers.

Meanwhile, The Conference Board noted that other factors are driving demand for blue collar workers even as their supply shrinks. These include slowing labor productivity, which creates demand for more works; near-zero growth in manufacturing labor productivity; and fast growth in e-commerce.

The shortage is bringing bigger paychecks to workers and higher job satisfaction, according to the study. However, for employers, rising wages and labor turnover are squeezing profits.

Source: Staffing Industry Analysts

Industry News

Salary Guides

Labor Trends

Job Descriptions

Affordable Care Act