This report from the Wharton School of Business questions the received wisdom that the US economy is on the precipice of a huge labor shortage:
Cappelli's study lays out in detail why it is erroneous to assume that a smaller baby bust cohort and the aging of the boomers--who will begin to retire soon--will lead to a labor shortage. For one thing, the fact that the baby bust cohort is smaller overall than the baby boom cohort does not mean that every subgroup within the baby bust group has to be 16 percent smaller. [...]Now, about that need to outsource everything...As for the fear that the retirement of baby boomers will contribute to a labor shortage, Cappelli says this assumption is predicated on the unrealistic expectation that the boomers will quit work at age 65. Unlike their parents and grandparents, many boomers will continue to work past 65, even though they may change the kind of work they do.
What's more, both the general population and the labor force will continue to grow, according to the study. The Bureau of Labor Statistics estimates that the labor force will rise from 153 million in 2000 to 159 million in 2010. The assertion that the labor force will be smaller in the years ahead is, Cappelli says, simply wrong. Moreover, the baby bust cohort will be followed by an even larger generation of people who are now in their teens and 20s.
