US Labor Force Squeeze: Challenges and Opportunities Ahead

    According to Bloomberg News, Reggie Kaji’s recruitment agency received a peculiar request wherein the agency was asked whether it could provide 200 migrant workers that are willing to travel from Texas to Detroit. They would be accommodated in hotels while working at a factory that makes doors for cars for the three biggest auto manufacturers. 

    The above is an instance of the worker squeeze due to the pandemic. US job reports have shown that a shrunk workforce with prospective employees about to retire or kept at the sidelines. For the new hires, bosses are desperate so that they can meet the increasing demands, causing the wages to go up and letting the officials at Federal Reserve monitor other aspects. 

    What is not being understood well is that there are many industries where the shortfall of workers might well continue for many years or even decades once the pandemic is gone. 


    The labor force is anticipated to grow by 6.5 million workers by 2030, as per the Bureau of Labor Statistics. This figure indicated a backslid of almost 10 million for nearly ten years that ended 2019 and perhaps more significant numbers in earlier decades. 

    A combination of population growth which is slower within the country and with few numbers of migrants coming from outside implies that even though during those periods of stronger economic growth, it is quite likely that companies find it difficult to find people even for jobs that are at the entry-level. 

    There are falling birth rates, and the death rates are higher, a trend that worsened during the pandemic. And it is also being anticipated that immigration may be slower and slower. Bloomberg News also reports that if demographics are the same in the developed nations, it is being thought whether wages will rise or the bargaining power will be more because of fewer workers. As unemployment dropped in 2019 by 3.5%, businesses got previews of a labor crunch. 

    Net immigration flows are dropping along with the birth rates in the domestic circle, and a pandemic-driven shortfall of almost 1 million working visas is being witnessed. Last month the Department of Homeland Security announced an additional 20,000 permits, which does not put a dent in the seasonal guest workers.

    The meaning of slow growth in the labor force also implies that companies will have to realign their hiring trend from about any profession and for applicants belonging to any educational background and not like the ones the recruiters are used to. 

    The big tech companies or even the local tech companies do not recruit from the cities, much from the so-called garlic and strawberry capitals that are referred to as Gilroy or Watsonville, California. 

    Tighter labor markets foster productivity since companies will work efficiently and will tend to invest in tools and equipment. The prevailing squeeze is proving to be beneficial for workers as well. It was seen that individuals that had just a school degree enjoyed faster growth in their wages, as per Atlanta Fed, says Bloomberg News.

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