Aging workers put new pressure on US labor supply
Indeed's chief economist says retirements and low birth rates pose a bigger labor-market challenge than AI-driven job losses.
By Hana Yoshida · Markets Reporter
3 min read
The U.S. labor force could contract by nearly 6 million workers by 2032, a shift that would intensify shortages in health care, construction and other fields that still depend heavily on people. In a Fortune commentary, Indeed's chief economist said the debate over artificial intelligence is drawing attention away from a demographic problem already taking shape.
Indeed Hiring Lab research projects the decline as Baby Boomers retire and younger generations fail to replace them at the same pace. The commentary also cited Centers for Disease Control and Prevention data showing that U.S. birth rates have been falling for decades.
The economist said the country has long benefited from a growing labor pool, which helped employers adjust through recessions and technological change. That tailwind is weakening, according to the commentary, and employers have not fully prepared for the consequences.
Shortages are concentrated in people-heavy work
The commentary said there is little evidence so far of broad job losses caused by AI. Companies are still hiring for roles tied to AI implementation, infrastructure and deployment, according to the economist.
The bigger strain, Indeed's chief economist wrote, is that the sectors facing the sharpest labor shortages are often the least likely to be replaced by AI systems. Health care, skilled trades, construction, engineering, manufacturing and public-sector employers continue to report difficulty finding qualified workers, even as hiring has cooled in parts of the white-collar economy such as software development and marketing.
The Health Resources and Services Administration projects that the U.S. could be short more than 140,000 full-time physicians by 2038, according to the commentary. The economist said AI may reduce paperwork for nurses or automate parts of logistics, but it cannot provide bedside care or build homes without construction workers.
Career moves face real barriers
Indeed's chief economist said the labor problem is also a matching problem. Workers displaced from office jobs cannot quickly move into roles such as nursing or electrical work because licensing rules, training costs, location and pay expectations can stand in the way.
Indeed Hiring Lab research cited in the commentary found that many pathways into shortage occupations remain limited even when demand is clear. The economist said the U.S. has spent years directing workers toward a narrower set of white-collar jobs, including finance and technology, while many stable and well-paid trade and health care roles suffer from poor perceptions among job seekers.
Employers are already seeing longer hiring timelines and higher recruiting costs, according to the commentary. For workers, the economist said, prolonged mismatches can mean delayed pay, slower career progress and more uncertainty.
Training and AI could help with matching
The commentary called for employers to broaden where they look for talent, including across regions, industries and career stages. It also urged more investment in apprenticeships and early training programs that bring new workers into high-demand occupations.
An Indeed survey cited by the economist found that two-thirds of U.S. workers consider skill development a personal priority, while fewer than half believe their employer feels the same way. With slower labor-force growth, the commentary said, companies will need to help create talent rather than only search for it.
Indeed's chief economist also argued that AI can help workers identify roles that fit their existing skills and help employers look beyond traditional credentials. Indeed research cited in the piece found that project managers, data analysts and retail supervisors share core business operations skills found in more than 70% of jobs nationwide.
This story draws on original reporting from Fortune.