U.S. faces critical shortage of 6 million workers by 2032: Lightcast
IDAHO, UNITED STATES — The United States is expected to face a critical shortage of 6 million workers by 2032, according to a recent study by labor market data firm Lightcast.
The cause for the shortfall will be a combination of factors, including rising retirements, mismatches between available workers and jobs, and lower workforce participation among men, researchers say.
Economist Ron Hetrick at Lightcast warns, “Our labor pool’s growth will not match our population’s. We will increasingly have more consumers than producers, driving price hikes and product shortages.”
Demographic shifts and industry disruptions
One key factor contributing to the labor shortage is the aging workforce. Since 2020, about 4 million of the 5 million workers who left the labor force were more than 55 years old.
In 2027, the number of Americans reaching age 65 will exceed those who become 16 for the first time in recorded history, perhaps signaling the start of a shortage of new labor force entrants to replace retirees.
Another source of trouble will be the mismatch between the labor force available and jobs in demand. The labor force will continue to skew younger, better educated, and more female, and their demographics may not match up with the prospective industries that are supposed to require more labor in such areas as health care, construction, and skilled trades, including plumbing and automotive repair, where demand is surging.
The numbers are dramatic! We've been researching what's coming re: a labor shortage in the US, and our new report THE RISING STORM details it fully. Read our latest Demographic Drought report now. https://t.co/Jwu4fIKjeC pic.twitter.com/FgW1mcCeFS
— Lightcast (@LightcastData) September 17, 2024
Prime-age men exiting the workforce
The study also highlights a concerning trend of prime-age men leaving the workforce.
Substance abuse and incarceration are responsible for taking 4.6 million Americans out of the labor force, with the majority of drug-related issues affecting young men. Additionally, alcohol misuse alone accounts for 232 million missed work days annually.
This exodus is particularly problematic given the rising demand for workers in male-dominated skilled trades.
Immigrants and automation could ease pressure
The study suggests that immigrants may help fill part of the workforce gap. Already, foreign-born workers make up 18% of healthcare employees, with one in four doctors and one in five nurses coming from abroad.
While some advocate for artificial intelligence (AI) and automation to address worker shortages, the Lightcast research shows that AI is unlikely to replace human roles in many critical sectors, such as healthcare and skilled trades.
