Background

The Skilled Trades Issue

There are at least three factors driving heightened concern within the manufacturing sector regarding the future supply of skilled trades workers – a general slowdown in the growth of the U.S. labor force, a large pending wave of retirements, and the increasingly high-tech nature of manufacturing and the changing labor force requirements that such a change entails. Each of these factors is addressed in turn.

GROWTH IN THE U.S. LABOR FORCE IS SLOWING
As shown in Figure 1, where the U.S. labor force grew at an average of 1.7 percent per year between 1950 and 2000, current projections anticipate a precipitous decline in that growth rate, falling to 0.3 percent between 2020 and 2030.¹⁰ In fact, if not for immigration, growth in the U.S. labor force would probably fall below zero.

The primary effect of this decline will be a tightening of the U.S. labor market, making all types of workers more difficult to find and potentially creating severe shortages in certain key occupations, like skilled trades workers.

There are two main factors driving this change. The first, the aging of the baby-boom generation, is relatively well known. As the baby-boom generation begins to enter retirement, the proportion of the U.S. population 65 years of age and older will increase from 13 percent in 2000 to 21 percent in 2030.¹¹ This will drive a concomitant decline in the proportion of the U.S. population in their working years (20 to 64), falling from 59 percent in 2000 to 53 percent in 2030.¹²

A second factor affecting the size of the U.S. labor force is not as commonly perceived. Between 1950 and 2000 female labor force participation rates in the U.S. increased from 34 percent to 60 percent.¹³ This dramatic flow of women into the workforce was responsible for the bulk of the increase in the U.S. labor force over that period. Future projections, however, anticipate that female labor force participation rates in the U.S. will not rise appreciably above the 60 percent mark and may actually decline. As a result, this driving force in recent labor force expansion is expected to flatten out.