Shortage Of Labor

One of the major concerns of today's companies is the shortage of labor,
especially in management. The baby boomers are nearing retirement age in the

United States and the birth rate is dropping. These circumstances, coupled with
the booming economy are the main causes of the labor shortage. There is a high
demand for labor but the once seemingly bottomless pool of employees and
managers that companies drew from has started to dry up. What are the factors
that contributed to the problem and how are today's corporations going to handle
this problem? The type of labor needed in today's society has been undergoing a
constant change. There is an increase in demand for workers but there is a much
greater demand for educated white-collar workers, especially management
material. Projections state that the growth in managerial positions will
increase 20% by the year 2010 yet the population aged 35-50 will decrease nearly

10%. What these figures say is the already diminishing supply of executives is
going to dwindle even more over the next 10 years. There is a shortage of
blue-collar workers now and there will also be an even greater shortage of them
in the future. In order for employers to find people who are willing to perform
unskilled, repetitive jobs they are going to have to be willing to raise the
level of compensation offered to employees. If McDonalds needs someone to flip
hamburgers they better be prepared to pay double to triple minimum wage. There
are a wide variety of employment opportunities and today's workforce can afford
to be selective when choosing a job. The demand for employees is high while the
supply is low. The figures on the change in average population ages and growth
in industrialized nations is beginning to make the corporate world stand up and
take notice. If the trends continue as they have been for the past thirty years,
the shortage of labor is going to continually get worse with each year that
passes. The predictions from the United States Census Bureau state that between

1990 and 2000 the increase of the American population over 60 will be 10.5% but
in 2010 to 2020, the increase will be 32.5%. The change in the 60 plus
population in the United States is projected to nearly triple in thirty years.

Compare these figures to the increase in under sixty-year-old population. From

1990 to 2000, the increase in under sixty year olds will be 6.5% and it is
projected to drop to 2.8% by 2010. If you look at the changes in the workplace
you will see that the average age of an employee is steadily rising as the
average age of retirement continues to drop. The projected increase in 55-64
year olds in the workforce from 1996 to 2006 is a staggering 54%. The projected
change in the 25-34 year old bracket is -8.8%. These trends are not only true in
the United States. Japan is also going to be coping with similar problems. Today
the people over age 65 compose 16% of Japan's population, but by the year 2020
it is projected that percentage will soar to 26.3%. Japan, just like the United

States is going to have to attempt to retain some of this group in the workforce
to compensate for the continually falling birthrate in their country. This
problem is very true in Europe too. Since 1995 Germany, France and Italy have
experienced a continual fall in working population ages 15-64. This trend is
projected to continue into the year 2000. Our aging population is also choosing
to retire much earlier than they once did. This is a factor contributing to the
strong economy we are enjoying now. The old are growing older, living longer and
they are healthier than ever. Breakthroughs in medicine have enabled people to
live much longer. The advancements our pharmaceutical companies research and
development departments have made are staggering. Diseases that once were a
death sentence are curable. Organs that are failing in the human body can be
replaced or rebuilt. There are even some types of cancer that are considered
curable. These things were not true twenty years ago. There also is a trend in
this country towards remaining healthy. Americans are taking much better care of
themselves; there is a genuine concern towards health. People are not smoking as
much as they did in previous decades and there is a trend towards exercise. We
take vitamins, we go out for a weekend run or bike ride and we are eating
healthier. All these factors contribute to a longer life