Workers and economic growth

Although the economy has been expanding and jobs have been increasing, the pace of improvement has been slow. Does this mean we’re stuck with unemployment rates much higher than we’d like?  N.C. State University economist Mike Walden answers.

“It’s interesting … how fast things can change in economics — I’m sure in other areas also — but before the recession hit many economists were worried about a labor shortage. And what they were focusing on is the fact that the baby boomers, that big generation of folks who were born right after World War II, were beginning to retire, and their retirements were going to increase and that was going to dramatically reduce the labor force and, in the minds of many economists, mean we didn’t have enough people to take those slots.

“Of course, then the recession hit, and we had a tremendous increase in unemployment. Now as we look post-recession, those baby boomers have slowed down their rate of retirement in part because a lot of them lost money — retirement money — during the recession. But they’re still going to retire at some point.

“So one source of hope for those folks who are unemployed is that we are going to have millions of retirements over the next decade, couple decades, again as those baby boomers move into their golden years.

“So that will open up slots. But they’re two issues there: One, will businesses increasingly replace people with machinery and technology?  And obviously that would take away some jobs. And secondly do the people who are unemployed have the right skills for the jobs that are going to be opening?  Those will be two big challenges facing unemployed workers in the future.”