IN MY ROLE with the National Club Association (NCA), I have the good fortune of speaking with club managers across the country nearly every day. I have also served on the board of my country club for the past eight years, so no matter the issue, I get to see and hear both the macro trends and the micro effects firsthand. When it comes to labor and workforce, there is a common question I hear from managers throughout the country, as well as the management team and members at my club: Why can’t we find the workers we need and what can we do about it?
The U.S. economy started to see the contours of a labor shortage before the pandemic declaration in the spring of 2020, but more than two years hence, it seems particularly acute. For some club positions, most commonly kitchen and grounds staff, it seems nearly impossible to find enough workers to meet the demand, even at wage levels never before seen for entry level jobs. There are many factors that affect the availability of labor and they manifest themselves in different ways.
Businesses of all types must have a clear understanding of these trends and what they mean for the labor force to effectively prepare for them.
Labor Participation Rate
According to the Bureau of Labor Statis- tics, the current unemployment rate at press time is 3.6%. This translates into roughly 6 million individuals. At the same time, there are 11.3 million job openings— nearly two openings for each unemployed person in the U.S. The picture doesn’t seem likely to change much in the future.
The labor force participation rate, a measure that includes all working age individuals, currently stands at 62.4%— still below the 63.4% level we saw just before the pandemic hit. As previously mentioned, prior to the pandemic we were already starting to feel the squeeze of available workers, so what’s going on?
Twenty years ago, the U.S. labor force participation rate was 66.6%, with 76.4% of men 20 years and older participating. Today, just 70.5% of men aged 20 and older are in the workforce—a drop of 5.9%. The number of women in the labor force aged 20 and older dropped 2.3% over the same period.
Adding to the drop in the participation rate are the 15,000 workers who will hit retirement age each day for the next 10 years. In just eight years, approximately 22% of the population of the United States will be 65 years of age or older.
Four years after that, in 2034, there will be more people age 65 or older than there will be children under the age of 18 in the U.S.—for the first time in the history of our country. The Baby Boom generation that fueled so much economic growth in past decades is retiring and the generations coming in behind it not only have different expectations about the workplace, but there will be fewer of them to fill jobs vacated by the generations before them.
Looking Ahead
Now that we understand what has occurred in the labor market during the past 20 years, what do those trends mean for the next 20 years? Predicting the future is a tricky endeavor, but there are lessons we can take from the past to inform our planning for the future. As is commonly the case, there are myriad factors that come into play when thinking about what the
workforce of the future will look like, but two variables we can predict with some level of reliability are our population and net migration. When it comes to the birth rate, the picture looks a bit unsettling.
America’s birthrate has steadily declined the past 20 years and is projected to stabilize at a level below what is necessary just to replace the current population. It takes a national birthrate of 2.1% just to keep a population stable; our current birthrate is just 1.64—well short of population replacement. Academics and policy experts point to a few societal shifts for the declining birthrate, but the main takeaway is that Americans are waiting until later in life to have children and having fewer of them when they do start families. With the number of Americans aged 65 and older outnumbering children in just 12 years, we forecast an intensifying labor crunch that will affect all sectors of the economy. The second major factor is net migration into the country. According to data from the United Nations, the U.S. net migration rate has declined since it reached its peak of 6.48 per 1,000 residents in 1998. Net migration this year is projected to be 2.784 per 1,000. These figures are based on legal migration into the U.S. and do not take into consideration the fluctuation of undocumented entrants, which is clearly an issue Congress and the Biden administration have been at odds on how to address. Unfortunately, our border policies, or lack of enforcement of them, have created a political stalemate when it comes to the larger issue of immigration reform. Congress has made two serious attempts at immigration reform in the past
20 years and has little, if anything, to show for it. There is a compelling argument that our current and future workforce shortages are as much an immigration issue as anything else and the raw numbers are stark. In 2016, approximately 1 million immigrants were added to our population. In 2021, that number dwindled to just 247,000. Our lack of progress on immigration policy is having a negative effect on our economy, but there are efforts underway in Congress to alleviate immediate concerns about workforce shortages.
Legislation
Congressman Lloyd Smucker (R-Penn.) has introduced legislation that would create an additional non-immigrant visa program aimed at occupations with basic skills. It’s called the Essential Workers for Economic Advancement Act (H.R. 7239), and NCA sent a letter to the Congressman recently thanking him for his efforts and pledging to work with him for its passage (see p. X for an interview with the congressman).
The Essential Workers for Economic Advancement Act (EWEA) would establish a year-round temporary worker program aimed at filling basic-skill jobs in the service and hospitality industry. Other sectors of the U.S. economy currently have access to legal visa programs to meet their needs, including agricultural visas (H-2A), high-skilled visas (H-1B) and seasonal visas under the H-2B program, which many clubs already participate.
Under the EWEA, there would be as many as 85,000 H-2C visas issued per year. The visas allow workers to remain in the U.S. for up to three years with an option to renew twice. Businesses would have an opportunity to apply for H-2C permits to hire H-2C workers for up to three years and renew those permits twice. Employers would have to demonstrate they tried to hire U.S. workers and must be in an area with an unemployment rate of 7.9% or lower.
There are additional worker protections such as wage requirements and participation in the E-Verify program to which businesses would be required to adhere. The program would be administered by the U.S. Department of Homeland Security.
The bill is a realistic and reasonable approach to a long-term labor force issue that contains protections for both U.S. workers and visa holders. NCA will work with its allies in Washington to pass this much-needed legislation, though it will take some time. We’re hearing bipartisan talk about immigration later this year and you can be sure NCA will push for action. I encourage you to reach out to your congressional representatives to urge them to consider cosponsoring and supporting passage of the EWEA. We’re amid a workforce shortage that despite what some suggest, can’t be solved by simply raising wages. The sooner we recognize the macro trend, the sooner we can fix the micro problem clubs face every day.
Joe Trauger is Interim President & CEO of the National Club Association. He can be reached at [email protected].