Looming Skills Shortages Threaten Occupations Critical to Societal Well-Being

The US is facing an imminent crisis: Millions of workers from the baby boom generation will reach retirement age between now and 2032, and there are simply not enough younger workers with equivalent education and training to meet labor-force needs. In our new report, Falling Behind: How Skills Shortages Threaten Future Jobs, we estimate that through 2032, the US economy will require 5.25 million more workers with education and training beyond high school, 4.5 million of whom will need at least a bachelor’s degree. These skills shortages are emerging in many critical occupations, including management, engineering, and construction, but anticipated shortages are particularly concerning in occupations that provide essential services for societal health and well-being.

Workers in education- and care-related occupations—including childcare workers, teachers, physicians, and nurses—play essential roles in our society and economy by caring for young children and enabling parents to remain in the workforce, preparing students for college and careers, and providing life-saving medical care. Because these occupations generally require workers to hold a bachelor’s degree or higher, policies aimed at increasing postsecondary attainment, better aligning educational and training programs with labor-market needs, and incentivizing workers to enter these occupations will be critical to address projected skills shortages.

Implications of skills shortages within education- and care-related occupations

The US faces a whopping projected shortage of 611,000 teachers and childcare workers through 2032, only 57,400 of whom will need a high school diploma or less. Combined, middle-skills¹ workers (108,700) and workers with a bachelor’s degree or higher (444,800) represent more than 90 percent of the educator shortfall. The implications of this shortfall are immense. A wealth of research shows that greater investments in education and childcare lead to positive short- and long-term outcomes for children and their families, underscoring the need for quality staffing in schools and childcare facilities. Additionally, the ongoing decline in the foreign-born workforce in the US and overall decrease in the US labor-force participation rate suggest that mitigating the skills shortage crisis will require bringing people back into the labor market. The shortage of qualified childcare workers threatens to undermine that goal, given that the lack of affordable and accessible childcare has long presented a barrier to parents fully participating in the workforce.

Healthcare providers similarly face a large shortage of 551,000 workers (189,000 physicians and 362,000 nurses) by 2032. Physicians in the US are required to hold bachelor’s degrees and professional degrees, and employers increasingly prefer to hire nurses with bachelor’s degrees. Consequently, the entire physician shortage and 98 percent of the nursing shortage reflect future unmet demand for workers with a bachelor’s degree or higher. This problem is only expected to worsen as the rapidly aging US population creates greater demand for increasingly complex healthcare, burdening an already overwhelmed healthcare system.

If current trends continue, skills shortages could negatively disrupt the US economy and broader societal well-being for years to come. Policymakers must address the specific challenges facing education- and care-related occupations, including the significant investments of time and money required to attain skills and credentials; high turnover rates, particularly among educators and nurses; and low wages and poor working conditions that push individuals out of these professions or deter young workers from pursuing them at all.

Make postsecondary education more accessible to and affordable for workers preparing for education- and care-related occupations

Addressing postsecondary affordability is a crucial strategy for mitigating the skills shortage, given that the occupations highlighted above largely require education beyond high school. The significant upfront costs of postsecondary education, and the uncertain returns on investment, can pose barriers to entering teaching, childcare, and medical professions. Moreover, factors such as changing perceptions of the value of a college degree, skyrocketing tuition costs, and new policy developments—including uncertainty around the future of the Public Service Loan Forgiveness program and significant changes to the student loan repayment system—may be discouraging young people from pursuing postsecondary education at a time when we need to increase credential attainment to meet future workforce demands.

Policymakers should incentivize education leading to high-demand occupations through policy reforms and increased public investments, especially for workers reentering the labor market who will likely require additional education and training. These might include creating more streamlined loan forgiveness or repayment programs; instituting programs in which the employer or government covers the costs of certification, training, or preparation; and expanding nontraditional career pathways, such as learn-and-earn programs or apprenticeships. Addressing affordability challenges will make postsecondary credentials more accessible to those from lower–socioeconomic status backgrounds and underrepresented racial/ethnic groups; importantly, this has the added benefit of ensuring that educators and healthcare workers reflect the populations they serve, which is proven to support higher student achievement and improved health outcomes.

Make education- and care-related occupations more financially rewarding

Numerous studies find that low pay and poor working conditions are key drivers of high turnover rates and worker shortages, suggesting that higher compensation would encourage people to pursue and remain in essential occupations that currently offer relatively low median pay, such as childcare (where workers earn a median of just $32,050 per year). Collective bargaining has historically offered a pathway to better jobs, and unions remain an important avenue for workers to gain stronger workplace protections and benefits. Across industries, labor unions are strongly associated with reduced employee turnover, higher wages for union and nonunion workers alike, and improved working conditions and benefits. Yet with overall union membership in the US hovering at less than 10 percent, an administration proving increasingly hostile to organized labor, and “right-to-work” states imposing significant barriers to unionization, the reality is that good union jobs remain out of reach for the vast majority of the workforce. Therefore, it is also incumbent on policymakers and employers themselves to undertake efforts to raise wages and workplace standards to make these occupations more attractive.

Within the physician workforce, certain specialties and regions of the country are projected to face more pronounced shortages. Policymakers should consider expanding existing programs to incentivize comparatively lower-paying but high-demand roles, such as providing healthcare in rural areas or specializing in primary care. To address the overall shortage, a recently introduced bipartisan policy proposal offers one route to expanding the number of available residency positions by 14,000 over the next seven years.

Although unlikely in the current political climate, less-restrictive immigration policies—such as raising the annual cap on H-1B, EB-2, and EB-3 visas and reducing burdensome restrictions and wait times—could also alleviate shortages in occupations like nursing and encourage foreign-born healthcare workers to relocate to underserved rural areas that will bear the brunt of impending skills shortages. Indeed, on September 19, the Trump administration announced an executive order imposing a steep $100,000 fee on H-1B visas, previously $2,000 to $5,000 per application, in a move meant to prioritize the hiring of US workers. H-1B visas have played a critical role within the tech industry, but this policy change also threatens to exacerbate shortages in other sectors that rely on the program, such as healthcare and education, and make it even more challenging for employers to fill specialized occupations.

Care-oriented occupations such as childcare, nursing, and teaching are notoriously both essential and thankless, characterized by burnout, years of debt, and low pay—but they don’t have to be. Investing in our collective health, education, and well-being means investing in the people who provide these vital services, from removing barriers to postsecondary education and training to ensuring these necessary occupations offer livable wages and dignity on the job. Our country’s ability to raise future generations of leaders and innovators depends on it.