Countdown to the Great Labor Shortage
By WELD ROYAL
NewYorkTimes.com
August 22, 2001
The daily flurry of layoffs is bringing major changes to the workplace as companies struggle with the economic downturn. But if government predictions play out as expected, soon there will be an equally big and opposite shift as baby boomers retire and the nation experiences one of its most severe labor shortages.
In its most recent study, released in November 1999, the Bureau of Labor Statistics projected that the gap between the number of jobs available and the number of people to fill them would grow to six million in 2008. And this is just the start of a shortage that will peak from 2015 to 2025, when the bulk of workers born between 1946 and 1964, as many as 60 million, reach retirement age.
Occupations with large numbers of older workers like construction inspection and teaching in secondary schools are expected to suffer. So are fields creating jobs at a fast pace, like computer engineering.
Of course, there are always unexpected developments that can radically change the workplace — the women's movement, the Internet, a war. But experts say the coming demographic shift is sure to have an impact.
"As the baby boomers retire, we'll be losing the head of the proverbial python that tried to swallow the elephant," said Ross C. DeVol, director of regional and demographic studies at the Milken Institute, an economic research group in Santa Monica, Calif. "And that will have ramifications on the diversity of the work force. There will be more women and minorities in the work force, and older Americans deciding to work longer."
For workers, experts say, the imbalance means opportunities in fields like engineering or health care where the shortages will be the most acute. For companies, the shortages will mean sending more jobs overseas and turning to immigrants to do the work Americans cannot or will not do. Already, such trends are under way.
"Finding qualified workers remains a top economic development priority, even during this downturn," said Shepard Nevel, executive director of the Mayor's Office of Workforce Development in Denver.
Technological advances have allowed companies like Affiliated Computer Services (news/quote), a Dallas-based information technology concern, to weave a patchwork of solutions here and overseas. ACS generates half its $1.96 billion in revenue from business service. In one operation, employees in Lexington, Ky., retrieve their client companies' correspondence from a local post office, scan it and send it by satellite to a data processing center in Ghana, in West Africa. There, 500 workers — mostly young women — enter the information into a database. They can earn about 80 cents an hour plus benefits, amazingly cheap by American standards but well beyond Ghana's minimum wage of about 80 cents a day.
ACS first set up such outposts abroad to lower costs, but expanded further as it struggled to find enough workers in America willing to handle data processing. "When we opened our office in Guatemala City, we had 500 people on the first day looking for a job," said Jeffrey A. Rich, the chief executive. "If we had opened in Manhattan, we would have had just a few people."
In Baltimore, economic development officials say they will not be able to attract the next generation of workers with such routine data processing jobs. And they are worried because a decade from now, the city and surrounding region are expected to have 108,000 fewer people aged 25 to 44 than now. Among other steps, government officials, executives and philanthropists financed a series of recent focus groups nationwide to find out exactly what the baby boomers' children want in a job. The aim is to attract companies that have jobs that will appeal to this group.
Companies will have to grapple with changes in the work force structure, said Ronald E. Bird, chief economist for the Employment Policy Foundation, a business- oriented research group based in Washington. Thirty years ago, he said, the labor market was shaped like a pyramid topped by corporate executives and other professionals (24 percent of the work force). In the middle were the skilled crafts workers, clerks and administrators (36 percent). The remaining 40 percent, including unskilled laborers, made up the bottom. But that pyramid has been shifting, with the top and the middle making up 71 percent of jobs now and projected to make up 77 percent by 2031.
BE&K Inc. of Birmingham, Ala., which designs and builds industrial plants worldwide, has been wrestling with these changes. It says it cannot find enough skilled laborers. To address the escalating shortage, it created a task force on the future of construction work. The group foresees a more diverse labor pool, with more new immigrants and women. But attracting women is an uphill battle because of the industry's macho image.
The number of women in the work force has more than doubled, to 62 million, since 1970, but they still constitute only 10 percent of all construction industry workers, according to the National Association of Women in Construction. BE&K has managed to beat that ratio — some 12 percent of its 10,700 employees are women — through such initiatives as day care at job sites and networking groups.
To attract more young women, it sends role models like Mary Hodge, a 47-year-old electrical supervisor, to visit high schools. This summer, it enrolled 10 high school girls in a free construction camp, where Ms. Hodge showed them how to thread electrical wires through siding while talking up opportunities for travel and the good pay — perhaps $80,000 a year with overtime.
John Natoli, 52, also acts like a cheerleader for his profession. Mr. Natoli, chief engineer at the New York City Department of Parks and Recreation, says while unemployment statistics are inching up, they do not square with what he is already finding: a dearth of engineers. "If 15 or 25 of them walked into my office now, I could hire them," he said. The gap is so big that Mr. Natoli does not expect this to change even if the downturn persists awhile.
The unit runs help-wanted ads, sends e- mail messages to new graduates and hires from other agencies. But people leave, and Mr. Natoli cannot always replace them with American-trained engineers, who can make much more in private industry. As a result, the construction unit has become a mecca for immigrant engineers, with roughly 40 percent of the engineers educated abroad.
Despite some tensions, Mr. Natoli said, work pressures mostly trump cultural divides. "People have so much to do, they forget about everything else," he said.
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