I should put the sweater on ’cause I thought maybe I should dress up a little bit, but you know what we’re gonna do, we’re gonna lean into the fact that it is casual Friday for the world.
(lively upbeat music)
If you pour it right.
Look at that.
You guys want this to be a high energy or low energy?
You didn’t see that coming.
– [Crew] No.
– Like a woodpecker.
(claps once) Ladies and gentlemen, it is June.
It is sunny outside, and it is time to talk about May, what happened to the economy and the labor market.
First, the US economy grew at an amazing 6.4% in the first quarter of 2021.
(mimics trumpet) Toot too-too-toot.
Second, the economic growth in Q1 has produced a historic surge in job postings, which we’ve covered in previous videos.
So I won’t tell you about that again ’cause you’d be bored.
I’m not on number three yet.
Still on number two.
But it now seems that the job surge has reached a springtime plateau.
I like that.
There were 3.5 million new job postings in May, which is pretty much the same as March and April.
Third, don’t get your hopes up about a renewed surge in May postings.
Economists predicted out-of-control job growth in April, but that didn’t quite come true.
But that didn’t quite come true.
Can you work with what I just produced there?
And right now, the data suggests that we should lower our expectation for job growth in May as well.
Because employers continue to struggle to find people to hire.
They simply can’t fill the positions.
For one thing, enhanced government unemployment subsidies have enabled thousands of Americans to stay home and out of work.
So in order to attract people back into the labor force, companies have to outbid old Uncle Sam.
And many companies and employers just can’t afford that.
But an even bigger hurdle, and one that we’ve been talking about a lot, is this overall decline in young people in America.
One of the biggest reasons employers are having trouble hiring people is something we are calling, in a lot of other videos, the ‘Sansdemic.’ America doesn’t have enough people for all the work they need to get done.
And that’s because baby boomers are leaving the workforce faster than young people are replacing them.
Because those young people were never born.
Did you know that last year, deaths outnumbered births in 50% of our states?
From 2001 to 2011, the local population under age 25 shrank in 61% of the US counties.
But from 2011 to 2021, the same population shrank in 70% of US counties.
You okay so far?
Not every state is struggling equally.
That sounded weird and I’m gonna drink more beer.
Not every state is struggling equally.
A few states are doing okay because their young population is still growing.
Texas, Utah, Idaho, Arizona and Florida are all growing their young population.
But the younger populations are decreasing in Northeastern and Midwest states like Michigan, Maine, Vermont, New York, Louisiana, Mississippi, and California.
Speaking of California, let’s zoom in a little bit. California’s population under age 25 is declining in almost two-thirds of its counties.
LA County, in particular, has lost three quarters of a million young people since 2001.
That’s 10% of the current total prime-age workforce.
Which means that over the next 20 years, LA County’s prime-age workforce will suffer a pretty low blow.
Remember, keeping up the birth rate is like striking oil in your land.
It’s a producer of wealth because we live in a human-capital-based economy.
What do you think?
The thing is I don’t work out, but I do wear tight clothing.
If these national trends continue, the Pacific Northwest, the Southwest, and a few Southern states will boast stronger economies over the next 50 years due to the growth in young people.
You might call these regions ‘People Positive.’
These regions are producing the most valuable commodity of the economy.
Because economies, as it turns out, are people.
Okay, where are we?
So all of this to say, if you’re an employer, you need to have a long-term people plan that anticipates these changes and ensures a viable future for their business.
Assuming that there is enough people is no longer a safe bet.
And check out our article.
It’s on the web at https colon slash slash economicmodeling.com slashslash 05 slash 25 slash the dash decline dash of dash young dash people dash in dash America slash.
I think you’re gonna like it a lot.
I think I did a good job reading that.
I’m thinking how far back I could go before I fall?