US Videos

Expect a Labor Shortage in the Coming Years

Robert Johnson, CFA

Bob Johnson: This week's chart attempts to take a simple measure to focus on the working-age population, that is the people between 22 and 62, which is typically viewed as when people are working. Some of the other participation measures and so forth that are out there include people all the way up until age 90, which is probably not a really fair representation of the actual number of people available for work.

Our data today is focused mainly on births in U.S. hospitals over various years to track when our labor force may expand and contract.

What the chart shows looking very far to the left, in the very early 2000s, the number of net adds to the working-age population might have been as high as 1 million people per year. But now here in 2014, it really represents the last year where there will be any growth in the working age population as that begins to slow in 2015, not only slow but actually turns, in that the working-age population is shrinking.

What does that mean? It means more labor shortages in the years ahead, it probably means more income for the people who are working, and it probably means a little less profitability for corporations.