America’s Future Labor & Skills Shortage.

The workforce over the next 30 years will place a heavy emphasis on education and skills, and America could suffer serious consequences without enough highly skilled workers to fill available jobs, according to the Employment Policy Foundation’s (EPF) latest Employment Forecast report.

“While the combination of a weak economy and the Sept. 11 tragedy have pushed the country into a recession in the near term, the nation’s great challenge will be finding enough highly skilled workers to meet future demand,” said EPF President Ed Potter. “Fifty-two percent of today’s jobs require at least some college or post-secondary training. Thirty years from now, it will be 65 percent.”

America will need to add 58 million more workers in the next 30 years to maintain its global prominence, Potter said. “Today’s displaced workers should take advantage of every opportunity to increase their skills and training because they will be needed,” he said. “In addition, workforce development should be a top priority of any economic stimulus program the government proposes.”

The future labor force will be short about 35 million workers, Potter said. Besides more workforce development, fundamental changes are needed in policy to encourage better labor force participation – especially among older workers, to reform immigration and to increase productivity from those already in the labor force.

There are several adverse consequences for America unless the need for skills and labor are met.

Reduced Standard of Living. If the labor and skill shortage is not addressed, growth in the average standard of living could easily fall to half its historical rate. Slower improvement in the standard of living could affect some groups – the elderly, minorities and low income families – more than others.

‘Wage-Push’ Inflation. Scarce labor in the highest-skilled occupations could lead to national “wage-push” inflation. EPF estimates the average wage rates could climb between 13.9 and 20.9 percent in response to the labor and skill shortage. Higher labor costs would be transferred to consumers through higher product prices.

Erosion of the American Industrial Base. The labor and skill shortage could result in a loss of domestic, strategic production capacity. As labor costs rise, some companies will keep their product prices competitive by moving operations to foreign countries with lower wage rates. This loss of capital and jobs could hamper America’s ability to maintain national security.

Persistent Structural Unemployment. Since World War II, America has moved from “mass unemployment” to “class unemployment” Those individuals with the lowest skills increasingly have found it difficult to find stable employment. The labor shortage will fail to help the most disadvantaged workers. Even those positions that will not require a college degree will require high levels of experience and training.

EPF’s latest Employment Forecast report CLICK below (Adobe Acrobat required):

http://www.epf.org/research/newsletters/2001/ef20011025.pdf