Here are some interesting demographic charts that show why finding skilled workers is problematic.
The Civilian Noninstitutional Population consists of those age 16 and older who are not inmates and are not in the military.
The total population change is 7.58 million of which a whopping 4.52 million are in demographic age group 65 and older.
Civilian Noninstitutional Population February 2020 by Age Group
The prime working age population, 25 to 54, grew by 2.08 million but those 65+ expanded by 4.52 million.
The vast majority of those 65+ are retired and most who do work are likely not full time. Unfortunately, the BLS does not have full vs part time status for this age group.
Nonetheless, the overall employment stats are telling.
Labor Force Participation Rates February 2020 vs September 2023
The labor force participation rate is the percentage of the civilian noninstitutional population 16 years and older that is working or actively looking for work.
SA means Seasonally Adjusted, NSA means not Seasonally Adjusted. I used SA numbers when available because there are huge variances in the propensity to work in the 16 to 19 and 20 to 24 age groups due to school.
The participation rate ticked up slightly for those in age group 25 to 54 while that of age group 65+ ticked slightly lower. This looks positive because the size of age group 25 to 54 is more than double that of 65+.
However, note the steep drop in the propensity to work once one hits age 65. It not quite as bad as it looks if one were to break down 65+ into multiple groups, but it is nasty.
Employment Level February 2020 and September 2023
Employment rose across all age groups. But don’t cheer. The comparisons are quite grim.
Change in Employment Level vs Change in Population February 2020 to September 2023
The population of age group 65+ rose by 4.52 million but there’s a mere increase in employment by 582 thousand!
We do not know what percentage of people in age groups 60-64 and 65+ are working full time because the BLS does not provide that breakdown.
Demographics Supports the GDI vs GDP View of the Economy
GDP and GDI are two measures of the same thing. Income should match products sold.
The last three quarters of GDP are +2.6%, +2.0%, and +2.1%.
The last three quarters of GDI are -3.3%, -1.8%, and +0.5%.
We will have revised numbers on Thursday.
Philadelphia Fed GDPplus Measure Sure Looks Like Recession Started in 2022 Q4
GDPplus is a measure of the quarter-over-quarter rate of growth of real output in continuously compounded annualized percentage points.
It’s a blend, but not an average, of Gross Domestic Product (GDP) and Gross Domestic Income (GDI). It is much smoother than either GDP or GDI as the above chart show.
In 100 percent of the cases, with no false signals, no misses, and no lead times more than two quarters, every time GDPplus had two consecutive quarters of negative growth, the economy was in recession.
And except for one negative print of a mere -0.1 percent, the economy was in or would soon go into recession as soon as the first negative GDPplus number surfaced, and stuck.
For discussion of the advantages of GDPplus, please see Philadelphia Fed GDPplus Measure Sure Looks Like Recession Started in 2022 Q4
People believe what they want and certainly Biden along with mainstream media is touting GDP.
The Census numbers are very lagging but match the idea that GDI is the set or numbers to watch.
GDI Matches Demographics
The important point is that GDI matches demographics. Boomers are retiring en masse, replaced by workers of less skill.
This is one of the sore points in the UAW negotiations. Robots are another. See Biden to Join UAW Picket Line as Strike Expands, Good Luck Getting Repairs for discussion.
Please note that retiring boomers means less skilled workers, decreasing productivity, and upward wage pressures which is very inflationary given weak productivity.
Also note there are 12 million people age 60-54 wo are still working and another 10.8 million age 65+. They are all going to retire one way or another sooner rather than later. But as long as they are living, the need for medical care services is poised to skyrocket.
Retirees are generally not unemployed and there are nearly 23 million on deck for retirement.
The demographic factors above are a key reason why I expected minimal rise in unemployment this recession. I have a token, bragging rights bet on this.
The “senior” age group is open-ended, functionally covering 50 years! It would be worthwhile to further break down this segment as the odds of a 66 y.o. working (or able to work) and 86 y.o. working are substantially different.
Mish wrote: “60 Percent of the Population Growth Since the Pandemic is Age 65+”
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So people are being born as old people???
Excess deaths will continue. Great article: https://www.naturalnews.com/2023-09-26-leaked-pfizer-data-deagels-2025-depopulation-prediction.html
You also need to see what their central bank did as well. Zero interest rates for 30 years does not work. However, not much poverty there either.
“Turning Japanese, I think we’re turning Japanese. I really think so.”
Relax, the current invasion will offset such concerns in short order.
“However, note the steep drop in the propensity to work once one hits age 65.”
People get shown the door, even before 65. It is a cost savings to get rid of senior employees.
Got immigration?
I think you meant “invasion”
OK, there IS NOT going to be a demographic Study on how many Grandparents have been called upon to be PARENTS, but I would guess it is in the Millions. Grandparents had kids who got divorced or lost hubby’s or BOTH kids work and Grandma and Grandpa are BABYSITTING all the way up to BEING PARENTS full time.
When you got grandchildren, babysitting with them is one of the greatest pleasures you can have. I look forward to it and so do they.
The parents or the grandchildren? There was a time when grandparents were more strict and didn’t resort to bribery as much as now. But they made for great grandchildren.
So you’re telling me the FED didn’t see this coming in its quest to crush jobs with high interest rates? So I guess they crushed everything but,so now people have to work 80 hours a week. Win win for them I guess. What a joke.
1) Gen Z : 70M. 20M of them are already in the labor force. Add the Prime Age
103M, 10M/20M in the black market plus 5M new immigrants ==> 50M Gen Z + 103M Prime + 15M black market + 5M new immigrants ==> 170M.
2) The overextended labor force :
If med schools teach nutrition and healthy food we will need less doctors and live
longer at the expense of 170M in the labor force.
3) We are not Japan. In 1989 the Nikk plunge and barely recovered, while the Dow is surfing on : July 1990 to Feb 1994 tranquility Lazer.
The labor force including 56+ might reach 210M/220M.
I assume the numbers don’t include those flooding through our southern border.
I think it’s obvious that they don’t. No assumption required.
This massive problem Brandon created is a ticking time bomb.
Here’s the latest but expected problem:
https://www.dailywire.com/news/texas-gop-passes-unanimous-resolution-calling-for-special-legislative-session-on-colony-ridge
Just utterly, mind boggling bad.
For the next 10-15 years, the number of people turning 16 and 65 will be down. Every year after 2023, the number of people turning 16 or 65 will be fewer and fewer. The only thing we’ll have in abundance are 50 year olds (born in 1973), which will grow in number every year for the next 20 years. Colleges are out. Baby boomers start dying off. What can you do with increasing numbers of 50 year olds? They sure arent enthusiastic workers by that age. The only good news is that people turning 50 (per Harry Dent) are spending the most money they will ever spend in their entire lives. And more and more come down the line for two decades. Good economic times ahead?
Most of the 50 year old people I know are all planning on retiring over the next few years, they will not wait till 65 or later. Granted, most of these people have been working professionals that earn 200k+ so they are well off and able to do so and this is why I keep harping on the labor/demographics issue. It is way bigger than anyone is thinking and it will cause far more problems that people aren’t even thinking about.
50 million boomers is a huge number, there are doctors, pilots, nurses, engineers, teachers and then all the blue collar and trade people – ALL LEAVING the labor force.
And while immigration may help with the blue collar jobs to some extent, it won’t help the skilled/professional trades at all, these professions take years to get accreditation to practice.
See: “The Great Demographic Reversal” by Charles Goodhart and Manoj Pradhan.
I read and loved the book. Three themes come out of it and I hope I remember them correctly…
1. De-globalization – All countries look inward
2. De-industrialization – Because countries are all looking inward they won’t have the capacity (from globalization) to industrialize like before
3. De-civilization – Once industrialization starts failing it’s back to tribalism.
The plan is to be one of the enforcers for the tribe’s Medicine Man.
@Scott – Golf?
In 2020/2021 about one million impaired elderly expired within weeks.
Civilian population : every category is up, ex 55/59 down 1.215M.
60/65 up 0.347M. // 65+ up : 4.525M. Something is wrong. Where do the 4.872M
come from.
Maybe they needed to make COVID look worse than it actually was.
Spot on. I went into Surgery (heart) in July 2020. I asked the Nurses (I was in 3 days)…and one after the other said, “SHHHHH (finger to lips)….do not believe the news you are hearing.” I had asked: how many Covid Patients are jamming the ER?
NONE. But, the news cast reported thousands dying and thousands sick. ALL lies.
Population growth. Even though the US has a very low growth rate (<1%) when your total population is over 330 million it grows by over 1 million a year. So in 3 years you add ~4 million people.
The rest of the numbers increasing just show the wave of people moving along the aging graph. The reason age 55-59 is down is because that's the affect of the boomers all moving into the next age group and GenX is a much smaller cohort.
They got older.
And better like fine wine.
Micheal, you need to study up on the theory of spontaneous generation.
At one time it was quite popular.
The Kansas City Fed has a release that points out that the Fed’s rate hikes have had minimal impact on labor due to demographics. It’s a great read but it leaves out the whole baby boomer issue and instead blames “labor hoarding” for the problem.
https://www.kansascityfed.org/research/economic-bulletin/post-pandemic-labor-shortages-have-limited-the-effect-of-monetary-policy-on-the-labor-market/
Here’s what will happen in 2030. You’ll have a plumbing problem that you can’t fix yourself. You call your local plumber and he/she says it will take 3 weeks and the site visit charge will be $300. After than it’ll be minimum $200/hr (2 hr min charge) + parts and labor to fix the issue. You’ll gasp at the cost but that’s how the labor shortage world of 2030 will work. Same for electricians, carpenters, roofers, etc. Young people don’t want to go into the “trades” and would rather do tiktok or work from home as a tech worker. It’ll be a whole new paradigm.
Print this comment out and save it, you’ll see how clairvoyant I was…if I get anything wrong it may be the cost. It might be double of what I wrote up above.
I think you are correct. Met some people out boating on the lake. Owner of plumbing company and his younger brother. Younger guy was a master plumber. He said most master plumbers are retiring soon and he sees great opportunity. Jobs that need to be done now and the customer doesn’t care what it costs – it just needs to be done now. He had quit GA Tech engineering as he thinks he’ll do better in plumbing.
H1b visas and outsourcing to overseas tech plantations are no threats to plumbers.
Nope. What will happen is that as the price of plumbing rises, more people will become plumbers for that same reason that so many people ‘learned to code’ in the last 20 or so years or so many went into union jobs making cars in the 60s.
People will always gravitate to the jobs that pay the most and that are in the most demand and plumbing isn’t a job that requires special skills (high intelligence or high strength / dexterity).
Plumbing isn’t a job that requires special skills?
Do you know how long it takes to become a master plumber and be licensed?
It’s not a job you can walk into. It takes years and years, often 5-6 years of study, apprenticeship and experience. Then you have to take a state test.
It takes as long to become a plumber, learn the building codes as it does to become an accountant.
Anyone who thinks you can just walz into the plumbing industry and become a plumber doesn’t understand at all how it works.
Give the guy a break, if he’s in Texas. Where if the temperature drops below 32 degrees Fahrenheit all the pipes in the place break and everybody looks at each other and says “whocoodanode?”.
Exactly, during the big freeze in the Austin area our house was the only one with water. Interestingly enough I did the plumbing. No plumbing background just common sense. All they neighbors were done by contractors and licensed plumbers. Something is not adding up. LOL
Plumbing is a valuable skill, but Residential plumbing is not rocket science, getting licensing for anything is a pain. Lots of new effective plumbing repair solutions out their that don’t even require solder. Even soldering is learnable, just make sure the copper is clean and dry. Lots of You tube videos out there that help show how to repair Autos, sewing machines, washers, dryers, everything under the sun.
Certain people like the licensing because it eliminates competition. You hire the smooth talking Anglo contractor, and illegals show up to do the work, who 6 months earlier were cooks.
America has become more and more a society of “Let me see your papers” That model is getting old and will fade away.
“but Residential plumbing is not rocket science,”
A lot more so, than running a hedge fund or The New York Fed, brokering sales of or renting out overpriced apartments, “investing” in random numbers, chasing ambulances or, for that matter, being the President. Of the USA, as well as the vast majority of it’s “corporations” after 50 years of completely unhinged wealth-and-power transfers to the rankest of idiots.
If plumbers screw up, things break. As in: They CAN fail. Hence need to display at least SOME minimal level of competence and sentience. As opposed to the rest of the above rabble, who simply gets bailed out. As well as excused by an ever so pliant and illiterate indoctrinati, when tasks such as walking up flights of stairs without falling over, or managing to NOT lose even MORE than the billions upon billions of pure loot The Fed has already handed them free of charge, proves too ardous for their incompetent selves.
I have friends who became plumbers and they said the only 2 things they had to learn were:
1) Water runs downhill
2) Payday is every other Friday
And yeah that’s over simplified in this day and age of building codes and permits which do have to be learned. But residential plumbing does not require 6 years to become a master plumber. Once the plumbing is already in, virtually anyone can watch a YouTube video, go to Home Depot and get the parts and do the repairs (sinks, toilets, faucets) if they are so inclined. I’ve done plenty of home repairs and I bet lots of people on here have as well.
I just replaced a washer on my hose bib in the garage. The drip was driving me crazy. The only hard part was loosening a nut that hadn’t been loosened in about 30 years.
Americans used to be more self reliant. Home maintenance was just part of the equation for Homeowners. There was usually some person in a families gene pool or a neighborhoods gene pool that was handy or good with their hands. These same aptitudes are still present and I know many young people who can do some sort of repairs.
A few generations of planned obsolescence and lack of repairable gadgets and appliances by design; has frustrated many to give up on certain projects.
Human aptitude has not diminished but valuing human aptitude has. Those who complain about not being able to find help are those who are not self reliant or refuse to value paying someone a compelling rate to do things that they themselves are unable to do.
So many cheapskates on this forum who wish they could just own an illegal and have it over with.
But you hit the conundrum right on the head without realizing it. The solution to all problems is “hire more people” or “raise wages” and that normally works as long as you have the people to take up those professions.
As an example, Desantis kicked out a bunch of undocumented workers from Florida, are people clamoring now to work in the farm fields picking oranges? I’m sure wages will go up but where will the people come from?
As a society we will need to choose between plumbers or pilots. Electricians or engineers, surgeons or lawyers but we won’t have enough people to do them all no matter how high wages climb. Where are the robots and AI that we were promised 30 years ago? I am skeptical AI will do anything more than token activities for people like ordering a latte or set grocery list to be delivered to your house.
To look at it another way, there are 600,000 cybersecurity jobs open around the world, why aren’t they being filled? Because these jobs require lots of technical training and they all pay very well ($100k+) so why aren’t people flooding in? Because the people don’t exist is the answer, at least not educated people familiar enough with STEM skills. Neither does the educational infrastructure exist to train and educate people. Yes there are billions of people around the world but how many have access to internet, computers, and teachers/mentors?
But believe and plan for whatever you want, I hope your assessment works out the way you think it will because if you’re wrong, you’ll be headed to the poor house.
Look up Optimus Robot. They will be taking over a lot of low-level types of work and they are coming sooner than you think. For agriculture work we already use special robots to do the work. The up-front cost is high but the saving are big. Some say they will destroy jobs and they might. When robots become sophisticated enough to do the “real work” all that will be left for us is to make podcasts and interview each other. Sounds dystopian but today we see people making very good money doing incredibly stupid things on TickToc and such. In an economy where robots do the work, a guaranteed minimum income for people then I could see it happening and strangely attractive in a morbid way.
I did and it’s a joke. I don’t get why people making robots keep making them human. Think of all the creatures on earth from an octopus to a cat and you’ll easily see there are far more practical designs for robots that would lend itself to more useful thing like carrying loads, lifting heavy loads, or have multiple arms with multiple tool sets.
When I see a weird robot with 8 arms and 12 legs then I’ll know we’re on to something better.
The robots are made to replace human labor, so it makes sense to make them like a human.
It would be interested to see how many of the Millennials and Zoomers are making good money in Tik Tok . Like anything else, it is getting saturated. and all of them want to do nothing or stupid stuff for money….Since money now is worth something then the question how long will this nonsense last?
“Because these jobs require lots of technical training and they all pay very well ($100k+) so why aren’t people flooding in? Because the people don’t exist is the answer, at least not educated people familiar enough with STEM skills.”
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Ans because they won’t hire anyone over 40 these days.
“When I see a weird robot with 8 arms and 12 legs then I’ll know we’re on to something better.”
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Here you go. Robot designed with reverse knees to better lift items and fit into smaller spaces.
https://interestingengineering.com/innovation/worlds-first-humanoid-robot-factory-set-to-open-this-year
Florida’s protected citrus growers are far from needing more people to pick fruit.
https://www.fox13news.com/news/treatments-for-citrus-greening-providing-hope-for-the-orange-industry-as-production-declines
(somewhat dated)
https://www.bloomberg.com/view/articles/2016-10-12/the-florida-orange-industry-enters-the-sunset-years
You are obviously clueless about plumbing.
Companies attempt to hire the specific skills they need right now.
Understandable.
What they don’t do well is recognize potential and add training at company cost.
Some do and do well.
Others just hire for their current needs and discard folks when needs change.
Younger folks have become attuned to the fact that company loyalty is hard to find.
Hi Mish! It’s been a long time. Good to see your blog is still popular.
Thanks for checking back in
Have you away realizing?
Hi Realist!
Welcome back!
Thank you for presenting your oil and gas scenario here many years ago. It convinced me to switch from tech to energy. And I have done very well with it.
I hope you have more investment ideas to share with those who read Mish’s blog.
I think we’re turning Japanese
I think we’re turning Japanese
I really think so think so think so
We’re about a quarter century behind their experience. Buckle up.
What scares me the most is that Japan’s population peaked in 1980 along with their stock market then has been declining ever since for the past 40 years. Will the S&P 500 steadily decline for the next 30 years as boomers cash out for retirement?
The answer is YES.
The Japanese decline was from a market that was absurdly overvalued. Ours is too, but nothing like Japan in 1990.
You also need to see what their central bank did as well. Zero interest rates for 30 years does not work. However, not much poverty there either.
Not a lot of sex their either.
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Doctors warn US is barreling towards same fertility crisis as Japan – where one in 10 men in their 30s are VIRGINS and third of women will be childless
– Japan’s birth rate in 2020 was 1.34 births per woman, down from 1.5 in 1992
– US birth rate is 1.6 – its lowest level recorded since data was first tracked in 1800
https://www.dailymail.co.uk/health/article-12461821/Doctors-warn-barreling-fertility-crisis-Japan-one-10-men-30s-VIRGINS-women-childless.html
The stock market bubble wasn’t the problem. It was the real estate bubble. The Japanese have spent the last 3 decades paying off borrowed debt instead of buying things.
Japan’s “lost decade” is because the pundits think banks lend deposits. Both the banksters and the economists are delusional. It’s no happenstance that the Japanese save a higher percentage of their income and keep a higher percentage of their savings inside their banking system.
Link: “The Riddle of Money Finally Solved” by Dr. Philip George
http://www.philipji.com/riddle-of-money/
Dr. Leland Pritchard said the same thing 20 years earlier.
I don’t think so….we have a vibrant Millennial, Zoomers as well as the Government who keep spending like drunken sailors..
“I think we’re turning Japanese”
In the way of age demographics I agree. However, in the way of finance, this nation is moving decidedly Argentine at an ever increasing rate.
The big difference is the Japanese pay off their debts. We default on them.
The thing about Japan is that even in stagnation they live very well and that real estate prices after four decades of demographic weakness are very affordable. It is still early in the demographic decline game but for the moment you can live well in Japan. In a few years that may change as we will see if massive adoption of Humanoid-style robots like Optimus technology will enable them to continue to do so.
Optimus won’t be in wide use any time soon. And it will cost a lot. In most cases it will be cheaper to hire someone than to buy and setup a robot.
Define soon first of all and then define what tasks you want it to do. That will determine whether it would be cheaper to hire somebody or not. Probably what will happen is that you will hire somebody to do something and he will come with his robot to do it.
If you amortize the costs over 3-5 years, the robot will come in much cheaper.
Absurd generalization. There are very few applications where it makes sense to use a robot over a person. Why do you think there are way more employed people than robots?
“Turning Japanese” would require increases in longevity. As well as function at old age. That takes wealth.
Instead, We’ve long ago turned Argentinian. Navel gazing, delusional, once-were 1st worlders; now far too destitute to have any hope of experiencing life expectancies like those of more advanced 1st world populations.
On a more positive note: Just like Argentinians, as well as many/most non-first-worlders, “we” still remain much better at building more Americans, than the Japanese are at building more Japanese. And, no matter what illiterate dittoheads may have been told to mindlessly regurgitate at Trump rallies: Third world youngsters, have a lot more potential net productivity in them, than even Japanese-grade Biden+generians.
I don’t get it…Trump keeps screwing everyone without giving them Vaseline, but they keep coming back for more….It reminds me of Rasputin.