Demographic Shifts: A Boom for Employees in the Salary Discourse

The demographic development in the USA places employees in an advantageous position, as the increasingly aging population fundamentally changes the dynamics in the labor market. According to recent analyses of workplace trends, employers face greater challenges in finding qualified employees as more people retire. This development could lead to employees having a stronger negotiating position regarding their salaries and benefits in the coming years. Senior economist at Vanguard, Adam Schickling, predicts a robust labor market until 2025, as the growth of the workforce is restricted by the aging population and companies have to compete more intensively for workers. These factors could reignite the recently declining wage development. An analysis by the Congressional Budget Office from last year shows that the ratio between people of working age (25-64 years) and those over 65 could fall from 2.9 to 2.2 by 2054, meaning each worker would tend to support more retirees. The challenge posed by an aging and shrinking workforce was identified by 47% of surveyed US employers in a November survey by the World Economic Forum as a defining force for the future of their organizations. The pandemic caused a wave of early retirements, thereby driving the demand for remaining workers, which contributed to inflation in 2021 and 2022. While intensified immigration in past years countered the aging labor market and contributed to economic growth, it remains unclear how this situation will develop under the emerging President Donald Trump, especially given his announcements to restrict immigration and carry out mass deportations. Experts at Indeed see this as an impending labor shortage that could lead to more intense competition for workers.