It has been nearly eight years since the end of the Great Recession and many businesses in the United States are still struggling to grow, but this time for a different reason – a lack of qualified workers.
From technology companies in Lehi, to homebuilders in Boise, there is a growing divide between the number of job openings and the number of qualified workers to fill them.
At the same time, the labor pool from which employers can draw new talent is shrinking in tandem with the unemployment rate. In 2009, there were approximately 6.6 unemployed persons for every job opening, now there are 1.3. As the labor gap persists, businesses are forced to scale back on projects, increase wages, or relocate to more advantageous regions. In the construction industry, a shortage of workers has become a major driver in the delay of new construction and rising home prices.
As the president and his administration advance policy to make good on his promise to return the United States to 3 percent economic growth, a significant hurdle lies ahead. In order to revitalize U.S. manufacturing, improve infrastructure and grow the export industry, the country needs more skilled workers.
However, this is a struggle against long-term trends. The labor force participation rate, which measures the share of the population actively engaged in the labor market, has fallen steeply since reaching its peak of 67.3 percent in 2000. The current rate of 62.9 percent reflects the continued march of the baby boomers into retirement, a slowdown in population growth and the increasing amount of time working age individuals spend in the education system.
As these trend continue, the United States and many sectors of the economy will find it difficult to locate and retain the labor it needs to grow.
See charts illustrating labor trends here.