Forget recession. Will US have too few workers by 2018?
Up to 25,000 UPS jobs will open up in the next few years because of retiring baby boomers. Retirements may mean the US will have too many jobs and too few workers.
UPS expects to hire up to 25,000 drivers in the next five years.Skip to next paragraph
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These are good jobs. The average salary is $74,000 a year. So why are there so many vacancies in such a poor economy?
Retirements. The company's baby boomers are expected to leave and UPS will need new drivers to take their place.
By some estimates of the workforce, so many boomers could retire in the next few years that the US could find itself with too many jobs and too few workers to fill them.
Wait! This is great recession America, U-shape recovery-land, home of the weak job market. We're not going go have too many jobs, right?
"With nearly 10 percent of the American labor force unemployed ... it may come as something of a surprise that within less than a decade, the United States may face exactly the opposite problem – not enough workers to fill expected job openings," write Barry Bluestone and Mark Melnik, authors of a 2009 study by the Dukakis Center for Urban and Regional Policy at Northeastern University in Boston.
That's typically what happens after recessions: a glut of workers turns into a labor shortage as the economy booms, they argue. By their calculations, the US could create 14.6 million new nonfarm payroll jobs between 2008 and 2018 and have only 9.1 million additional workers to fill them (9.6 million if you figure some people will hold more than one job).
So in eight years, the US could have 5 million or more jobs left unfilled if current trends continue.
Those current trends represent a crucial caveat: The study assumes that baby boomers will continue to retire at recent rates. And lately, boomers have been making noises that they may stick around on the job past retirement age.
In 1990, for example, only about 17 percent of Americans aged 65 to 75 had jobs, according to government figures. This year that proportion is expected to rise to 25 percent.
Then, government and some other forecasters think that rise will begin to level off. Others say the trend will continue through at least 2030: Ever-growing numbers of boomers will keep working.
"There are lots of reasons to stay in the labor force when your earnings are good and your benefits are there," says Julie Zissimopoulos, an economist at RAND and co-author of a study on the subject released Wednesday. It's not just the impact of the recession, she adds. "People are living longer. If you live longer, you have to save longer."
So which will it be for post-recession America: too many or too few jobs? It's something of a coin toss right now.
"Boomers are going to retire from the jobs that they've had to do so that they can do the jobs that they want to do," says Matt Thornhill, president of The Boomer Project, a market researcy and consulting firm in Richmond, Va. That may be new careers or brand new businesses that they start.
One thing is clear: They won't follow the model their parents set.