U.S. faces permanent labor shortage, says University of Tennessee economist

There is a simple reason why so many U.S. companies have been having a hard time filling open job positions, according to University of Tennessee economics professor Marianne Wanamaker: The United States has seen extraordinary economic growth over the last three years but has not been able to grow its labor force at the same rate.

Speaking today at the Council of Supply Chain Management Professionals’ (CSCMP’s) Annual EDGE Conference, Wanamaker says that the United States is 3 million workers short of where it needs to be to maintain growth.  

“The number of unemployed people is as low as it’s been in the last 22 years,” said Wanamaker, “And there are more job openings than there are unemployed people, so the idea that we are going to solve our problem by just retraining the unemployed people doesn’t hold water in today’s economy. That’s not our current situation. Instead, we don’t have enough bodies.”

The situation is not likely to improve anytime soon as U.S. population growth is at 0.5% or lower. Currently U.S. population growth is dependent on immigration. However, only 6% of legal immigrants per year are currently employment-based.

Faced with this daunting reality, what can companies do? Wanamaker has four suggestions: 

1. Embrace artificial intelligence and explore its potential to boost worker productivity.

2. Continue to focus on retraining existing and potential employees in the skills you need.

3. Figure out how to navigate the immigration system to bring in skilled employees from abroad.

4. Recognize that workers are now in the driver’s seat. To be able to attract skilled workers, companies need to be prepared to be flexible and offer them the benefits that they desire.