You
Will Have A Quantity Problem
By Dennis Winters
Posted on 3/21/07
You think you have trouble finding quality workers? You may.
But soon you will also have a quantity problem. The labor
supply situation in Wisconsin is on a collision course with
time and it is important to do everything possible to attract
and retain workers.
Remember how the difficulty of trying to find enough workers
in the late 1990s dissipated somewhat with the recession of
2001. This time around things are different. The challenge
of finding enough workers won’t go away with the next
business cycle.
Wisconsin’s labor force grew 28 percent from 1980 to
the year 2000. It is expected to increase by less than 4 percent
in the twenty-year period from 2010 to 2030. Instead of adding
656,000 workers to the state’s labor force in the past
twenty years, only 114,000 will join the ranks in the next
twenty – a difference of 542,000 workers.
One task is to retain your best workers, those with the most
knowledge and experience, those that are considering retirement.
You know the Baby Boomers are getting older and will eventually
retire. Labor participation rates for 25-55 year-old Wisconsin
workers are over 85 percent. Those participation rates drop
to 50 percent for the 60-64 year-old cohort. When the Boomers
reach 65 years of age, which begins in 2011, their work participation
rates halve to about 25 percent and fall quickly thereafter.
With them will go not only their efforts, but their knowledge
and experience as well. Many of them will stick around the
job for various reasons: they don’t want to quit work
just yet; many can’t afford to retire; or, you can entice
them into staying by treating them better.
If older worker participation rates can be changed to decrease
by only half as much, 128,000 workers will remain in the labor
force over the next twenty years. Retaining those workers
will also retain a huge body of knowledge and experience.
Keeping those experienced workers on the payroll will be a
benefit and a necessity.
Dennis Winters is the Chief Economist
for the State of Wisconsin
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