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Know any airplane mechanics? A wave of retirements is leaving some US industries desperate to hire

by Andrew Wright
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workforce shortages

Subheadings:

  1. Airline Mechanics in Demand: A Growing Challenge
  2. Retirements and Labor Shortages Across Industries
  3. Aging Workforce: Impact on the Economy
  4. Aviation Industry: Desperate Need for Mechanics
  5. Construction Industry: Shortage of Skilled Workers
  6. Challenges in Attracting Young Talent
  7. Aging Workforce Extends to White-Collar Jobs
  8. Impact on Inflation and Monetary Policy
  9. Addressing the Worker Shortfall
  10. Industry Advocacy and Solutions

Revised Text:

Airline Mechanics in Demand: A Growing Challenge

Know any airplane mechanics? A wave of retirements is leaving some US industries desperate to hire

Kwasi Bandoh, a senior recruiter for an airline, stood before a group of aviation mechanic students at their graduation ceremony last month and congratulated them for all having jobs. However, the moment highlighted the challenges faced by recruiters like Bandoh in finding mechanics to meet the demand in the aviation industry.

Retirements and Labor Shortages Across Industries

Across the U.S. economy, various industries are grappling with the challenge of replenishing a workforce diminished by a surge of retirements that began during the pandemic and has continued since. This shortage of workers affects fields such as construction, manufacturing, nursing, and certain professional industries like accounting. The retirement rate has risen from 18% to nearly 20% of the U.S. population since 2019, resulting in approximately 3.5 million fewer workers. Furthermore, the percentage of workers aged 55 or older has increased to nearly 24% compared to only about 15% two decades ago.

Aging Workforce: Impact on the Economy

The surge of retirements, coupled with a slowdown in immigration during the pandemic, is primarily responsible for the labor shortages experienced by employers. Despite the Federal Reserve’s efforts to combat high inflation by increasing interest rates, hiring has remained strong. Companies need to replace departing employees, resulting in job growth surpassing economic growth. Although the economy expanded at a modest rate in the first quarter of 2023, hiring remained robust, leading to a historically low unemployment rate. This situation poses a challenge for the Fed’s goal of controlling inflation.

Aviation Industry: Desperate Need for Mechanics

The aviation industry is particularly affected by the aging workforce issue. More than one-third of mechanics in the airline industry are between the ages of 55 and 64, while fewer than 10% are under 30. As a result, recruiters like Kwasi Bandoh are struggling to find enough mechanics to meet the growing demand from airlines, plane manufacturers, and repair shops. The industry has seen significant job growth, with the air travel sector hiring approximately 45,000 people in the past year, tripling the overall pace of hiring in the U.S. economy.

Construction Industry: Shortage of Skilled Workers

The construction industry is also grappling with the aging workforce challenge. The proportion of workers aged 55 and older has doubled from 2003 to 2020, making up nearly one-quarter of the industry. This shortage of young talent is not unique to construction but is shared with industries like aviation maintenance. Fewer young people are inclined to pursue careers in what they perceive as less secure, blue-collar work. The shift in perception towards favoring formal education, particularly a bachelor’s degree, has led to a shortage of skilled trade workers like factory workers, backhoe operators, welders, and electricians.

Challenges in Attracting Young Talent

One of the major obstacles in attracting young talent to industries like aviation maintenance and construction is the shift in perception regarding the pathway to prosperity. In the past

Q: What industries are experiencing workforce shortages due to retirements?

A: Several industries in the United States are facing workforce shortages as a result of retirements. This includes the aviation industry, construction industry, manufacturing sector, nursing field, and even certain white-collar professions like accounting.

Q: What percentage of the U.S. population is currently retired?

A: According to research by the Federal Reserve Bank of New York, the proportion of retirees in the U.S. population has risen from 18% to nearly 20% since 2019. This translates to approximately 3.5 million fewer workers available in the labor market.

Q: How is the aging workforce impacting the economy?

A: The aging workforce presents a unique challenge for the economy. Despite the Federal Reserve’s efforts to combat inflation by increasing interest rates, hiring remains strong as employers need to replace retiring workers. This has led to a situation where job growth has outpaced economic growth, resulting in a historically low unemployment rate.

Q: What industries are particularly affected by the aging workforce?

A: The aviation industry and the construction industry are among the sectors hit hardest by the aging workforce. In the aviation industry, more than one-third of mechanics are between 55 and 64 years old, while in the construction industry, the proportion of workers aged 55 and older has doubled over the past two decades.

Q: What are the challenges in attracting young talent to these industries?

A: One of the major obstacles in attracting young talent to industries like aviation maintenance and construction is the perception that these jobs are less secure or lack opportunities for advancement. Additionally, the shift in favor of formal education and bachelor’s degrees has resulted in a shortage of skilled trade workers, as fewer young people pursue these paths.

Q: How are industries addressing the worker shortfall?

A: Industries are taking various steps to address the worker shortfall. Some companies are offering scholarships and financial aid to encourage young people to receive training in these fields. There are also advocacy efforts to promote these industries as viable career options, along with federal development programs that subsidize training schools and support outreach to high schools.

Q: What is the impact of the workforce shortage on inflation and monetary policy?

A: Countries with a large retired population and a smaller workforce typically face higher inflation due to increased demand for goods and services. This missing piece in the dialogue about inflation complicates the Federal Reserve’s efforts to control inflation and may lead to higher interest rates, potentially impacting the economy and potentially causing a recession.

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