Kwasi Bandoh, a senior recruiter for an airline, stood before a group of aviation mechanic students at their recent graduation ceremony. As he congratulated them on their achievements, he soon realized that not every graduate had secured a job yet. Bandoh promptly assured them, “Who doesn’t have a job? Because I have a job for you.”
This scenario perfectly captures the struggles faced by recruiters like Bandoh. The demand for mechanics in the aviation industry, along with plane manufacturers and repair shops, is growing rapidly. However, most of the existing workforce is aging, leading to a desperate need for skilled workers.
This challenge is not unique to the aviation industry. Across the US economy, various sectors are grappling with a similar issue. The retirements that began during the pandemic have created a significant workforce deficit, affecting industries such as construction, manufacturing, nursing, and even professional fields like accounting.
Research by the Federal Reserve Bank of New York shows that since 2019, the proportion of retirees in the US population has risen from 18% to nearly 20%, equating to approximately 3.5 million fewer workers. This trend is expected to accelerate further, as the percentage of workers aged 55 or older has reached almost 24%, up from around 15% two decades ago.
The surge in retirements, coupled with a slowdown in immigration due to the pandemic, are the primary factors behind the labor shortages plaguing employers. The implications of this aging workforce can be observed in the current state of the economy. Despite the Federal Reserve’s efforts to curb high inflation by raising interest rates, hiring remains remarkably robust. Companies are scrambling to replace departing employees, resulting in job growth outpacing economic growth projections.
In the airline industry, for example, over one-third of mechanics fall within the 55-64 age range, while less than 10% are under 30. “Everybody’s getting ready to retire, and not enough people are coming in to take the jobs,” laments Mike Myers, a maintenance manager for Piedmont Airlines.
However, for recent graduates from institutions like the Pittsburgh Institute of Aeronautics, the outlook is overwhelmingly positive. Will Gower, one of the graduates, shares his experience of receiving multiple job offers, some offering nearly double his previous wage. The demand for skilled workers in the aviation industry is evident, with air travel companies increasing their workforce by 9% in the past year, triple the pace of the overall US economy’s hiring.
This shortage of skilled workers extends beyond aviation. The construction industry, for instance, has seen a doubling in the proportion of workers aged 55 and older, accounting for nearly one-quarter of the workforce. Additionally, industries like aviation maintenance and construction face the challenge of attracting younger individuals who often prefer fields perceived as more secure or prestigious.
The labor shortage, especially in white-collar professions such as accounting, continues to pose challenges. Approximately three-quarters of accountants are approaching retirement age, further exacerbating the issue. The industry struggles to attract young talent, as data science and finance appear more appealing to recent graduates.
The consequences of an aging workforce extend beyond the labor market. Countries with a high proportion of retirees and fewer working individuals tend to experience higher inflation. Demand for goods and services surpasses supply, creating an imbalance that affects the economy.
While some individuals below retirement age have re-entered the job market, drawn by higher pay levels and steady hiring, the need for a sustainable talent pipeline remains crucial. The aviation industry, for instance, faces an estimated shortage of up to 18,000 mechanics this year, prompting the industry to raise pay levels and offer financial aid and scholarships to attract new talent.
To combat this labor crisis, industry stakeholders and policymakers must invest in training programs, increase outreach efforts to high schools, and promote these industries as viable and prosperous career paths. Failure to address the shortage could lead to flight delays, impeding economic growth and stability.
As the United States navigates the challenges posed by retirements and a diminishing workforce, industries must proactively adapt to ensure a steady supply of skilled workers. By investing in training and education, they can bridge the gap and secure a promising future for both workers and the economy.
