Using data from the Bureau of Labor Statistics, the U.S. Chamber of Commerce has calculated a worker shortage index for each state, calculating the ratio of people looking for work compared to the number of open positions. Florida, for example, has 53 people looking for work for every 100 open positions, making a worker shortage index of .53. The states with the most severe shortages stood at .36. Large structural changes are driving the shortage of workers, and they have implications for the future of the public education system.
Half of America’s 73 million strong Baby Boom generation reached the age of 65 in (editor’s note **gulp**) 2022. For the remainder of this decade, an average of 10,000 more baby boomers will reach the age of 65 daily until 2030, when all surviving boomers will be 65 or older. As the boomers exit stage left, a small Baby Bust generation began to enter the workforce as 16-year-olds in 2024. This generation had social media unleashed on them and then had their education disrupted by the COVID-19 pandemic.
Next, there is the demand for American labor to consider; it is up. A “re-shoring” of multiple industries began more than a decade ago due in large part to the shale-oil revolution producing the world’s lowest prices for natural gas. Citibank noted that natural gas now costs three to four times more in Europe than it does in the United States, thanks to the U.S. domestic shale gas boom.
The COVID-19 pandemic reinforced this trend. Companies are now seeking to insulate supply chains from political risk and cut time to market and respond to foreign wage inflation. Deloitte reported the results of a survey of 350 corporate presidents in 2022:
Transportation executives whose companies have begun preparing for nearshoring anticipate 20% of Asia-originating freight will move to closer-proximity markets by 2025…doubling to 40% of freight originations by 2030. Manufacturers’ expectations are similar, and 62% of them have begun this process already. Survey respondents expect agriculture, apparel, and consumer electronics to see supply lines being reconfigured the most.
So, summing up the story thus far, the demand for American labor is growing, but the supply is shrinking. Now recall the fall of 2021: Schools began to reopen; kids around the country went out to the school bus stop and…no one picked them up. Governors in multiple states called the National Guard to drive school buses. The causes for this occurred gradually and then suddenly.
The gradual part was an increased demand for drivers with a commercial driver’s license. Amazon and many other firms increased the demand for people with the same license required to drive a bus. School districts increasingly relied upon CDL holders who were not in the market for full-time work. The all of a sudden part of the story came when this universe of mostly older drivers did not feel eager to get on a bus with kids throwing their COVID masks at each other.
Districts were eventually able to find new drivers, and the National Guard tour of duties driving school buses ended. In the future, the CDL crisis of 2021 may be viewed as a suggestive bit of foreshadowing. The demand for American labor is increasing; the supply is decreasing, and the demand for public health care spending from those retiring Boomers will be in direct competition with education spending. Our Washington Olympians could try to fire up the money printing again to preserve as much status quo as possible, but we now have first-hand experience with the inflationary cost.
America’s public school system failed to meaningfully improve outcomes during multiple decades of steady increases in per-pupil spending above and beyond inflation. Is it possible they will do better during a period of heightened competition for public dollars and competition for labor?
Many human activities have become simultaneously less expensive and higher quality; it happens all the time. Public education, however, finds itself subject to a complex web of multi-jurisdictional red tape ensnaring a baseline district governance model highly vulnerable to regulatory capture. It’s not exactly the ideal circumstances for producing innovation or success.
Going forward, this politicized mess will have to increasingly compete with the elderly for public dollars and with a starved American labor market for workers. Not surprisingly a growing number of American families have decided to make alternate plans.
