THE U.S. ECONOMY needs a staggering 4.6 million additional workers—2 percent of the U.S. population—every year to keep businesses performing well and the economy growing. Yet a shrinking and aging population is making those workers more and more difficult to find.

The crisis is analyzed in a new report from the Conference Board, a non-partisan think tank, in which suggestions are made on where we can find many of those "missing workers."

Americans are not alone. The crisis is even worse in other countries, the study says. Germany needs to find 1.6 million workers, South Korea needs 2 million and China needs 47 million.

"According to our surveys, CEOs around the world cite labor shortages and attracting/retaining talent among the most pressing challenges keeping them up at night," says Dana M. Peterson, Chief Economist of The Conference Board.

"However, solutions to chronic labor shortages are within reach, if governments, companies, and nonprofits act together. Our new research finds that a multi-faced approach—including older, younger, male, female, and immigrant workers—can bring millions more into the workforce.”

The report points out that labor shortages put upward pressure on wages, which are passed on to customers.

Here are suggestions made in the report to ease the labor shortage.

• Businesses should adopt automation and technology to make up for missing workers. But, the report notes, “science can get you only so far.”

• Immigration is critical to solving labor shortages in many economies. Yet increasing the number of foreign workers and providing pathways to permanent residents is insufficient to provide all the workers needed.

“ In addition to political controversies around migration, many economies cannot admit enough foreign workers to make up for missing workers,” the report notes.

“After declining amid pandemic-era travel bans, immigration rebounded in most economies, but in many cases remains below historical norms. Moreover, immigration growth is anticipated to stall or materially undershoot pre-pandemic levels over the next decade.”

• Drawing on the older worker pool.

The number of people retiring are exceeding those entering the labor pool in nearly all mature economies, the report notes. Extending working years, therefore, can help ease labor shortages.

“Reforming pension programs to encourage workers to work longer, more flexible work regimes, and encouraging companies to pair older, experienced workers with younger workers can add millions of people to regional labor markets,” the report notes.

• Maximizing women workers. Increasing the number of women in the labor force can “completely solve labor shortages in many economies.”

Strategies include upskilling, retraining, flexible work, closing wage gaps, championing familial support, and financing entrepreneurship.

“Companies, governments, and families will have to work together to create incentives such as flexibility and hybrid work—as well as proper support such as reskilling and familial support policies—for women to enter and remain in the labor market during prime working years.” 

• Getting men back into the labor force.

Male labor force participation has been falling in many economies. The reasons include advancement in technology, automation, globalization, health and societal challenges and general discouragement, the report notes.

Among the solutions: Retraining men for modern jobs, licensing reform, investing in education, addressing health and societal barriers to work, and encouraging men to use corporate benefits and employee resources.

• Motivating youth.

A reason fewer youth are in the labor force is extended schooling, the  report says, but also at play are mismatches in skills, differing tastes in work culture, and disaffection and discouragement.

Facilitating youth participation during breaks from school or providing part-time jobs during school can help, according to the study.

“ In many economies, shortages are the most acute in low-wage services jobs that are ideal for young, unskilled, and inexperienced workers. Filling this gap will require reforming inflexible labor laws that currently depress part-time and seasonal work opportunities for teenagers and students.

Public-private partnerships can enhance job preparation and boost participation by youth in the labor force.

Companies can collaborate with schools, individuals, nonprofits, and governments to establish internships, apprenticeship programs, and hands-on training and skills development to build talent pipelines for young adults.