Economist Barry Bluestone Projects More Jobs than Workers by 2018

Barry Bluestone, Dean of the School of Public Policy and Urban Affairs at Northeastern University, predicts that within the next eight years there will be more jobs than workers based on demographics and assumptions about the economy. He believes there will be up to 5 million job vacancies.

“If the baby boom generation retires from the labor force at the same rate and age as current older workers, the baby bust generation that follows will likely be too small to fill many of the projected new jobs,” states Bluestone’s report, After the Recovery: Help Needed – The Coming Labor Shortage and How People in Encore Careers Can Help Solve It.

How did he arrive that that number?

The government expects that 14.6 million new nonfarm payroll jobs will be created between 2008 and 2018. If self-employed and famiy business jobs are included the nuber jumps to 15.3 million. The government also projects that there will be 9.1 million additional workers (using the governments projections on population growth and labor force participation rates and minus any net immigration). The numbers take into account multiple job holders which brings the number of new jobs expected up to 9.6 million.

When you subtract the number of new jobs from the number of new workers, the gap is 5-5.7 million.

That range assumes several things. First, that baby boomers will retire at the same rate as the previous generation. The housing and stock market crash and the propensity for boomers not to save, coupled with their relatively better health seems to indicate that boomers will be working longer than previous generations. The numbers also assume that the economy will go back to previous growth patterns. While that's possible, it's more likely that we'll see sub-par growth over the next 10 years. Lastly, technology is increasingly taking up the slack and allowing more to be produced by fewer people - it's called productivity. If the numbers are updated just to reflect the expected later retirement ages of boomers than the gap drops to about 3.3 million.

The last thing that is not included is immigration into the US. If there are jobs to be had, there's a world of labor waiting to work.