First, the good news. The good news is that the United States is generating a lot of new jobs. In fact, the amount of new jobs generated recently is at a multi-year high. It is beginning to look like, if you have a college degree, you will be able to get a job. Now, whether or not the job that you get is something that you like and can see as a long-term career is another matter entirely. The reality is that a lot of the jobs being created currently are in the service sector, and they tend to pay less.
With that said, according to some analysts, the increased demand for college degree holders will pick up dramatically in the future. This can lead to an actual labor shortage. Why? Due to many different reasons.
The labor force participation rate in the United States is at a record low. So many people aged 25 to 45 have completely stopped looking for work. Economists don’t exactly know why.
There are certain indications as to where these people went. You only need to look at the increase in food stamp rolls to see that some people went there. You can also point to the fact that the number of people on permanent disability is at record highs as well. However, both these statistical explanations don’t really do a good job of explaining the whole picture. For one reason or another, there has been a cultural change and few people are working.
Of those who want to work, however, the future looks bright. Due to this predicted labor shortage, wages will rise. Wages have always been the sticking point of this recovery. Most of the new jobs being created are in the lower-paying service sector. If the labor shortage does materialize, around the 2020, expect a greater dynamism in the resurgence of the middle class.
However, there is one very dark cloud on the horizon. This dark cloud is record student debt. Most college students have graduated with a huge amount of debt. This is going to slow down their household formation. This is going to drain quite a bit of their earnings. It will take some time for the current crop of jobseekers to finally get out from under the negative effects of the huge debt that they took on to get their degrees.
