Marko Grecs @emge2116: "🔷U.S. LABOR SHORTAGE🔷 It’s hard to..."

Slovenia

🔷U.S. LABOR SHORTAGE🔷 It’s hard to discuss the U.S. economy today without frequently mentioning tariffs, interest rates, or Trump’s policies. But let’s shift focus for a moment to labor shortages and their evolving trends – an urgent issue the new administration has inherited. The labor market seems somewhat contradictory at the moment. While many companies are announcing layoffs or halting hiring, some employment indicators remain strong, and many businesses claim they can’t find qualified workers. So, what’s going on? It seems the U.S. labor market is facing a significant structural problem and skills gaps. Vacant jobs and unemployed workers both exist, but they simply don’t match up. UNEMPLOYMENT DOESN’T TELL THE WHOLE STORY A low unemployment rate looks good on the surface, but with labor force participation still low, many working-age Americans aren’t even seeking work. While most who want jobs have them, a large share remains out of the labor market entirely. Participation rates remains below pre-pandemic levels – hovering between 62.4% and 62.8%, down from 63.3% before COVID and 67.3% before the 2000 recession. Though more people are returning to work, overall participation still hasn’t fully recovered. WHY HAS THE LABOR FORCE PARTICIPATION RATE DECLINED? ➤Demographic shifts Demographic change is a major driver of labor shortages, fueled by declining fertility rates, rising life expectancy, and a shrinking working-age population. The share of older Americans is steadily increasing – a trend expected to continue and further strain the labor market. - Americans aged 65+ are projected to grow from 58 million in 2022 to 82 million by 2050, rising from 17% to 23% of the total population. - Median age rose from 30 in 1980 to 39 in 2022. - Civilian noninstitutional population is projected to grow by just 0,6% annually between 2023 and 2033. - The trend shows more older adults are remaining in the workforce longer. - Life expectancy gains have recently stalled though, due to COVID, drug overdoses, heart disease, chronic liver disease, and suicides. ➤Declining Immigrations Migration to the U.S. is at its lowest in decades. Between 2020 and 2021, net international migration added just 247k people to the population – compared to over 1 million between 2015 and 2016. Immigration has historically been a key driver of workforce growth, helping offset the decline in the working-age population. Without aggressive immigration targets, labor shortages will likely persist. ➤Lack of access to childcare The pandemic created a vicious cycle for the childcare industry: Parents – especially mothers – need reliable, high-quality childcare to return to work. But childcare providers themselves have been struggling: many were forced to shut down or scale back during the pandemic. The industry includes daycare centers, in-home care, preschools, after-school programs, nannies, babysitters, and early childhood education. With fewer options available, many parents – particularly mothers – stayed home to care for their children, making workforce re-entry difficult or even impossible. ➤Early retirements While early retirement is a dream for many Americans - 59% say they want to retire before age 65 (median retirement age is 62), many retire early due to job loss, health issues, or caregiving responsibilities, not choice. Some believe they have enough saved, only to later realize that early retirement was a mistake. The pandemic further accelerated this trend across the U.S. ➤Large savings Stimulus checks, enhanced unemployment benefits, and limited spending opportunities during pandemic helped many Americans to build up significant savings—sometimes earning more than while working. This financial buffer enabled some to delay reentering the workforce. While unemployment benefits typically last up to 26 weeks, this period can be extended during emergencies like the COVID pandemic if Congress approves. Still, even after benefits expire, a growing number of jobless individuals remain out of work. ➤Rise in New Business Starts Driven by a surge in entrepreneurship, many workers left traditional jobs or remained unemployed to launch their own ventures. In 2023 alone, 5.5 million new businesses were started, continuing record-high trends. ➤Finally – Trump’s impact Concerns over potential tariffs are prompting some companies to consider layoffs, likely raising unemployment. At the same time, uncertainty around future trade policy is making workers more hesitant to switch jobs. Trump’s push to expand U.S. manufacturing clash with reality – factories already face worker shortages worsened by aging demographics and stricter immigration policies LOOKING AHEAD... Overall, the U.S. faces a high risk of sustained labor shortages over the next decade. On the flip side, a recession could flood the labor market with workers – but for the wrong reasons, reflecting economic distress rather than genuine recovery $GOLD $BTC $SPX500 $DJ30

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