Sector News

To fix the labor shortage, solve the care crisis

June 11, 2022
Diversity & Inclusion

The US desperately needs workers. Workers desperately need help taking care of their children and (increasingly) their parents.

Carina, a 51-year-old nanny in a midwestern suburb, was forced into early retirement in spring 2022 to care for her adult daughter, who had fallen ill. When Carina gave notice, her employer, Sarah, found herself in a similar bind. Unable to find a new nanny in a tight childcare market, Sarah downshifted her promising career running a small health care business to work part-time while her mother watched her children several days per week.

Carina and Sarah each made rational choices that served the best interest of their families. More broadly, their stories exemplify the struggles both paid-care workers (like Carina) and workers with care responsibilities outside their jobs (like Sarah) face. Their stories also foretell a looming crisis across the economy.

Ongoing labor and talent shortages threaten US economic leadership and future growth. Even as the country approaches a return to prepandemic levels of employment and workforce participation, it faces historic job vacancies: there are 5 million more open jobs than people in the workforce. To address this shortage, US policymakers and employers must act decisively to recruit new workers from the nearly 50 million adults younger than age 65 who don’t hold jobs and to keep current workers working. This will require, among other solutions, reskilling for the jobs of tomorrow, harnessing immigration as a source of talent and innovation, and rethinking retirement.

Another vital antidote to the labor shortage is fixing the care economy, made up of people who provide paid and unpaid care. (See “Overview of the Care Economy.”) Within the care economy, two related and somewhat hidden issues are crucial to the long-term health of the US labor market.

First, the US must hire more workers in paid-care jobs in child, adult, and medical (especially chronic) care. These jobs are projected to provide three-quarters of the nation’s job growth between now and 2030. Yet most paid-care jobs are low wage, demanding, and stressful. They are likely to go empty in this labor-constrained market, as evidenced by understaffed daycares and nursing homes nationwide.

Second, the US must ensure that current workers—women and men, old and young—with unpaid-care responsibilities at home continue to work. These “employed caregivers” (not to be confused with those who work in paid-care jobs) make up more than half of the workforce. Nearly nine in ten employed caregivers like Sarah depend on other care providers—either paid-care workers like Carina or unpaid caregivers like Sarah’s mother—to free them up to perform their own jobs. Paid-care shortages strain the ability of employed caregivers to participate in the workforce, as many have experienced acutely during the pandemic.

While the pandemic laid bare the crisis in the care economy, it was brewing long before COVID-19 and is poised to worsen as the population ages and demand for care increases. Recruiting new paid-care workers and better supporting employed caregivers are critical endeavors. Without a healthy care economy, the workforce falls apart.

The US Needs to Enroll New Workers and Keep Current Ones
Three trends suggest labor shortages will persist for the next decade. First, the share of adults working or looking for work has declined since the late 1990s. Second, US-born population growth is in decline. The US birthrate has dropped steadily the past 15 years, and at 1.6 births per woman is too low for the domestic population to replace itself. Struggling to find satisfactory care or juggle care demands with work, many women are having fewer children or forgoing childbirth altogether. Third, with the recent decline in immigration, foreign-born population growth cannot make up the difference.

There is a silver lining. The US has enough people to close this labor gap. Even with 11 million job vacancies, an all-time high, there are more than four times as many people ages 18 through 64 currently out of the workforce. This is a large pool from which to source new workers. READ MORE

By Emily Kos, Nan DasGupta, Gabrielle Novacek, and Rohan Sajdeh


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