Is a Labor Challenge Coming?

Our economy has operated with a growing labor force for decades. This excess labor world kept wages and benefits, and effectively cost-push inflation, down. That’s certainly not the world we find ourselves in now. And labor supply looks like it will remain constrained. Fewer workers would constrain our growth and pressure inflation until businesses and governments can deliver productivity enhancements and/or structure incentives to bring more workers into the workforce. Increasingly, I fear we are moving to an environment where labor is short, not long. That situation can be managed, as other countries have proven, but it requires real intentionality.