The percentage of working age Americans in the labor pool has fallen to a 38 year low. Statistics show that less than 63% of those who are working age actually had a job or were actively looking for one. This is the lowest rate since 1977. There are a number of factors that play a part in the shrinking labor pool and this decline could potentially slow economic growth.
Why the Decline?
One of the main reasons for the shrinking work force is the number of baby boomers that are reaching retirement age. As the population gets older, many of these workers are beginning to retire, leaving a large gap in the labor pool. In addition to the increase in retirees, there is also an increase in educated women who are choosing to stay home with their children. Furthermore, there is an increase in working age people who are receiving disability benefits and are not actively employed. The recession from 2007 has also played a major part. Before the recession, nearly 66% of working age Americans were employed. This number drastically decreased with the staggering job loss associated with the recession. Although many of those jobs have since been recouped, there is a larger number of Americans who are considered long-term unemployed. Many economists expected the labor pool to increase after the recession, but is has remained low as a result of these many factors.
What Does this Mean for the Restaurant Industry?
In recent years, there has been a sharp decline in the teenage labor pool. The numbers of workers ages 16-19 has dropped significantly. Since restaurants have always been the largest employer of teenagers, they have been forced to look to a new age demographic for employees. As the nation’s second largest private sector employer, the restaurant industry has been directly impacted by the shrinking labor force. After the recession, many of those who were left jobless have remained unemployed. That, along with the large number of teenage workers remaining on the sidelines, has made it more difficult for restaurants to find employees. They have had to look to the millennial generation to fill this void. Thus, there has been a shift in labor demographics for restaurants in recent years.
It is crucial that our economy work to build a stronger labor force. The economy will decline and see less growth if there continues to be a drop in the number of participants in the workforce. As the millennial generation nears graduation and begins to join the workforce, we can hope to see an increase in employment rates. This is the perfect time for the restaurant industry to hold job fairs in order to entice this up and coming generation. The millennial generation could provide employees that are fresh, educated, and motivated.
The Gilkey Restaurant Consulting Group knows the importance of having a strong team of employees in order to run a successful restaurant. Despite the declining labor pool, Gilkey Consulting Group has an experienced team of professionals that are prepared to help you find the right employees to fit your needs. Our expertise in restaurant start-up and our knowledge of restaurant concepts will enable restaurant owners to employ an exceptional staff who are ready and willing to make your restaurant a success.