Vice President, U.S. Programs
On June 13, PRB’s Diana Elliott spoke with Mike Thompson at WOSU, an NPR member station, about the labor shortage affecting the United States. Elliott is our Vice President for U.S. Programs.
Producers on the All Sides program reached out to us after reading her piece on the demographic factors behind the current U.S. labor shortage, including population aging, declining fertility, and rising death rates—and the policies that make it harder for some people to work.
“There are a lot of people who would like to do more work than they’re currently doing right now,” Elliott said. In particular, women, immigrants, and people with disabilities could help fill the gap with the right support from employers and policymakers.
Her comments begin around the 15-minute mark. A transcript is below:
Mike Thompson, host: So, tell us what’s going on. For decades, we’ve heard about the impact of the Baby Boomers—as this wave of population goes through its lifespan, it was going to bankrupt Social Security, and now they’re retiring and there’s no one to do the work. What’s going on?
Diana Elliott, PRB: Well, the Baby Boom cohort, they were the biggest group born in the last century, and certainly prior, so when they have hit retirement age, we’re finding that we just don’t have as many workers in the workforce. When you couple that with declining fertility rates, which we have, you find that there’s not enough people being born to replace those Baby Boomers in the workforce right now.
MT: Is this a surprise? Probably not to demographers.
DE: Not to demographers, but maybe to everyone else. I think the declining birth rate has taken people by surprise, honestly, in our country, but this is something that is certainly happening in other countries. We’ve seen what can happen. Certainly this has been happening in Europe, and Japan is another case study.
MT: You think about just our country… my grandparent’s family and my wife’s parents family they had eight kids, and their generation had maybe three or four kids, and now we’re down to two. I mean, we’ve seen this happening, it shouldn’t be a surprise to us.
DE: And in fact, we’re below replacement rate, and it keeps going down. Replacement rate is essentially 2.1 children being born over a woman’s lifespan, over her fertility span I should say, and what we’re finding is that we’re well below that. We’re not as far down as, for example, Japan, but we’re certainly not at the rate of replacement.
MT: Why is it that birth rates are so much lower in Japan?
DE: In Japan there are a few factors at work. First is that this has been happening a bit longer in Japan than here. And you have a system where women essentially have to come all the way out of the workforce to have children, and there are increasingly women who are saying ‘I don’t want that, I don’t want to have children if that means I have to completely stop working.’
MT: And China had the one-child policy for decades; they’re relaxed that now but now they’re paying the price for that.
DE: Yes, and in fact, India’s population has surpassed China’s, so we’re definitely seeing that China is not having as many babies. And this affects the long term—when you have fewer babies being born, you then have fewer babies being born in the future.
MT: It really is exponential, how it works. But also, folks are living longer but they’re not necessarily working longer, at least in recent years.
DE: And there are some factors behind that, but I’ll point to disabilities for example. People often think that they can work longer than they’re physically able to, and often if you’re in a physically demanding job, you often have to retire sooner than you believe you should. So that does kind of impact people’s expected retirement age and what they do.
MT: So obviously the building trade, if you’re a construction worker and you’re 65-years-old, you’re done, unless you’re a manager or something like that.
DE: Yes, it’s a physically demanding job. I’ll point to other jobs in health care as well that are physically demanding and require that people, they might not want to leave the workplace, but they might have to.
MT: So, what’s being done? We have a politician here, the president of our State Senate Matt Huffman has actually said people should be encouraged to have more children, and that’s one of the reasons why he is strongly opposed to abortion rights, he said we should be encouraging families to have more children. Is that a solution? Abortion issue aside, should we be encouraging folks to have more children?
DE: I personally think there are easier solutions at hand. One of which is we have really low labor force participation for women. This has gone down since the late 90s, early 2000s, certainly since 2020, the pandemic, women’s workforce participation has not come up to that same level. So, if you implement policies that help women have a family life and work, then that’s a very easy solution. You’ve got a readymade workforce right there.
Another solution is thinking about how to engage people with disabilities that are in the workforce. We have a lot of people…a very high unemployment rate for people with disabilities. The pandemic actually boosted their employment, so remote work can be a really positive thing for many people with disabilities.
MT: Let’s take those one at a time. First, women in the workforce. Child care is key, having better access to affordable child care.
DE: Better access to affordable child care, and maybe even a lower-cost solution is better scheduling, that’s something that employers can think about and strategize about right now. So that is one easy, ready-made solution, but yes, absolutely, better child care policy would be key to getting more engagement.
MT: Of course, when you hear ‘mother’s hours,’ you hear while your kids are in school, but that often meant working part time, making less money, and that’s not exactly an incentive to go back to work either.
DE: Not at all, not at all. I mean the other thing we should consider is, is there a way for men to be doing more care in the household, as well? We still are essentially operating with 1950s ideas about work and family, and that doesn’t reflect what’s happening today in our world.
MT: Are you seeing some advancements in that arena because of the labor shortage and because companies are trying to be more creative to get people and keep people?
DE: When you talk to people who work, for example, in the service sector, they’re thinking about every solution possible. And we’re talking sort of lower-wage, hospitality and service positions. They’re trying to think about solutions that can engage, because they’re having a really hard time filling jobs right now.
MT: You talk about folks with disabilities. The Ohio Newsroom, which WOSU is a member of, had a story recently where they talked about this program up in the Mahoning Valley, which is up in the Youngstown area of our northeastern Ohio, where they were getting folks in with developmental disabilities to do tasks like folding sheets at a laundry service, and the workers loved it and the companies loved it because they got an employee to do a job, and this person, and the agency helping the folks with developmental disabilities, that gave them some purpose in life. Will we see more of that, you think?
DE: I certainly hope so, because there are a lot of people who would like to do more work than they’re currently doing right now, like people with disabilities. And you know people with disabilities range across the spectrum, right? You have people with disabilities who might also be neurodivergent, and working in an office setting is really challenging for some people who are neurodivergent, so I think there’s a lot of creative ways that an employer, given what their tasks are, whether that’s folding sheets or computer programming, can think about being more inclusive.
MT: Yes, creativity is key. Another issue is faced by Robert, he’s on the line from Cincinnati. Robert, you’re on All Sides.
Robert, caller: Some of the solutions I would have is, I’m going to give myself this scenario: I’m a convicted felon, I am on the sex offender registry. After getting out from prison, I went and got my bachelor’s degree in information technology. I am still having problems, I graduated in 2015, still having problems getting into IT because of my record. So, I think, one, getting people with criminal records and even on the sex-offender registry, getting people out of the prisons, because the United States has more than a 1% population that is locked up, and also doing like Japan and getting more automation and robots into the workplace.
MT: Robert, thanks for the call. A big issue, the old ‘checking the box’ controversy that convicted felons have to do, not all companies are doing that anymore, and that’s an untapped labor source.
DE: Yeah, and I’m glad that he raised that because that’s a really important issue. Again, we have some people who are interested in getting back to work and getting engaged and because of these rules are not able to. I’d offer up that drug testing is another thing that prevents people from accessing jobs. And if we think differently about these barriers to entry, I think again we provide more on-ramps for people who are eager to work.
MT: When you put yourself in the position of an employer, and here’s a person who he’s a convicted felon, sex offender, has done his time, has tried to improve his credentials, gone back to school, got his bachelor’s degree, but there’s still that question mark. And it can be hard for employers to take that risk, right?
DE: For some employers. I think there are other employers who are demonstrating that they’ve removed that as a policy, as a barrier. So, I think again, the employers who think more creatively about policies are the ones who are going to come out ahead in the next couple of decades.
MT: We’re talking about the labor shortage in Ohio and the nation and around the world; in particular, demographics, how a declining birth rate combined with an aging population is contributing to the labor shortage. Our guest is Diana Elliott, she’s a demographer and serves as Vice President for U.S. Programs at Population Reference Bureau.
Immigration is also a factor here—if you don’t have enough people to do the work because your birth rate is declining, you can welcome people in to do the work—something we have done in this country for centuries.
DE: Absolutely, and labor force participation tends to be very high among the foreign-born. And the other thing to add about immigrants is they tend to have higher birth rates than people who have been here for a generation or more. So again, it helps with that forward ripple effect. I like to share examples from other countries to make this case. And in Canada, in the last few decades, they’ve loosened up their immigration policy, and you have a bigger share of the working-age population consequently. Japan, if you go back to Japan, they have a very restrictive immigration policy, and again a very small share of working-age population right now.
MT: Why is that? Is it because Japan is geographically on an island, it’s a very crowded place?
DE: It’s a matter of policy and preference. They would rather have restrictive immigration policy, and honestly, they’re paying the price right now with labor force shortages. They just don’t have enough people to do these tasks. They are, as the last caller suggested, turning to robots and trying to figure out how robots can fill some of these roles.
MT: Yeah, we heard about that on the last segment, automation at grocery stores and fast food restaurants, and it’s only going to improve as technology improves, AI improves. Other countries… we mentioned Asia, China, Japan, how about western Europe, South America, are they facing similar situations?
DE: I look at France as a case study, where there have been strikes and protests about raising the pension age two years. And it’s still lower than the U.S. Social Security age. The population is not happy about this but the reason they’re doing this is for the reasons we’ve discussed—longevity, and sort of this factor of the working-age population. I’ll say though that France tends to have better workforce participation, labor force participation, amongst women, in part because there are better policies that support women being engaged in both family and work.
MT: To that retirement age, most people here retire at 65, which is when you can quality for Medicare, which is a big factor when folks are deciding whether to retire. Should we look at increasing that? Medicare at 67?
DE: Certainly some people have suggested that. I think there are some people though in certain groups in the labor force for whom that would be really hard for them, who might have to retire earlier, whose jobs might not provide the kind of supports we might expect upon retirement. So, certainly we’d have to think about that very carefully because there are certain segments of the population for whom that would not work.
MT: COVID-19 caused a lot of folks to retire early, maybe someone who wasn’t quite 65 yet but was near there, and someone particularly who worked in health care, worked in the service industry, was afraid of the virus, was just burnt out because they were working long hours. From a demographer’s standpoint, is that just a blip, like a little mark in the timeline, and that will eventually even out?
DE: What’s interesting about the retirements that happened, the boost in retirements that happened during COVID, is that we saw something similar like this happen during the Great Recession. So there are these moments in time where the workforce becomes restrictive, people are close enough to retirement, and they just decide to leave at that moment. So certainly, those eternal factors are powerful.
MT: Of course, those folks have the ability to leave.
DE: That’s right. But some people, to your point, maybe shouldn’t have left yet, right? But because of the environment at work, maybe it was in health care and they did not feel safe, they left as a consequence. The thing we haven’t talked about as well is the effect of long COVID and how that will be affecting people’s engagement with the workforce and their ability to stay engaged full time and work.
MT: One of the things we’re seeing there is lingering symptoms, whether it be fatigue, headaches, things like that.
DE: Correct, correct. And we’re finding too that there’s not necessarily, our policies have not necessarily caught up with the diagnoses. So you have people who are physically unable to work but are not necessarily able to be classified as disabled and are having to just sort of figure it out and navigate this on their own.
MT: You know the core demographic foundation is birth, death, and migration. So. to sum up, we can’t avoid death. Let’s just put that right out there on the table. What is the solution?
DE: I should say on the death note, we have higher death rates for young people than in any other comparable country. So that is clearly an incidence of policy affecting us and choices.
MT: That’s health care, the opioid epidemic is really hurting us, plus obesity and diabetes and things like that.
DE: That’s right. Drug use. Exactly.
What’s the solution? I think an easy, readymade solution is again, think about engaging more people in the workforce. think about the other barriers that exist for people with disabilities, people who are justice-involved in some way. Also, think about our immigration policy. Let’s be smart about this, let’s not look at this as an ‘us versus them’ kind of policy. Let’s think about how immigrants are really important for our labor force and how this is about the evolution of our country and making sure that we remain strong going forward.
MT: We’ve had immigrants from the get-go. And it’s just a matter of getting the, you said the ‘us versus them,’ and the targeting of immigrants—and just get down to business and do immigration reform, hopefully will help the situation.
Diana Elliott is a demographer, she serves as the Vice President for U.S. Programs at Population Reference Bureau. Diana, thank you for joining us here on All Sides.
DE: Thank you so much, it’s been a pleasure.