Marketers are pretty good at keeping tabs on sweeping demographic patterns. Trends like the aging U.S. population and net migrations to or within the U.S. generally show up in CRM files. However, there is one long-term trend that only got short-term attention last year: the shrinking U.S. labor force.
It may seem an odd time to raise a labor flag in marketing trades. The tech sector, the shining example of making talent acquisition a priority through marketing, is cutting recruiting efforts and announcing a new set of layoffs every other day. In our small corner of the professional services economy, some talent is finally back on the market.
The U.S. workforce began shrinking before the pandemic
U.S. labor force trends affect more than marketing staff, though. Trends such as how Americans spend their time and what their cash flow looks like are always important to brands. In 2022, the average annual job openings level was at 11.2 million, and there continues to be a deficit of workers to fill them.
Unemployment is the lowest it’s been in decades. We should pay attention because it’s likely this is not just another pandemic blip. Yes, we have 2.8 million fewer Americans working today compared to February 2020, but if every unemployed person in the country found a job, we would still have 4 million open jobs (according to the U.S. Chamber of Commerce). It’s true that the lack of international migration during the pandemic certainly didn’t help labor force numbers. It’s also true that some people are not participating in the workforce, like women with childcare issues, or people who still have stimulus savings. However, some of the deficit is part of a longer-term demographic trend.
Baby boomers started retiring, and fewer young people jumped at the chance to enter the workforce well before March 2020. Bloomberg presents some solid evidence that this is more of a demographic trend by focusing on the stalled growth of the U.S. working age population. In the last five years, the U.S. working age population grew at just 14% of the rate of growth that the U.S. saw in 2000-2005.
The contents of Americans’ day and wallet is marketing’s concern
What does it mean for marketers when fewer people are tied up for 40 hours a week? So much of the services and products we sell are about saving people their most valuable resource: time. What happens when a cohort stops putting a price premium on convenience? How does this affect our pricing models?
Spending power might start to change as we see what happens when fewer customers are beholden to a biweekly paycheck spend cycle. Do Wednesdays start to become more important because of Social Security check drops? Or does Wall Street performance have more of an effect on Main Street sales, as people only feel as flush as their retirement accounts?
The effects of a shrinking workforce have big impact on talent management -- but more than that, non-working customers also affect our pricing, promotions, and products. While this trend won’t sneak up on us, it’s important to think about how it might change your strategy in years to come.