John Sumser identifies key "storm fronts" that are converging in our ever-tightening labor market in his post today, The Perfect Storm:
Remember the movie "The Perfect Storm"? It's the story of a fishing boat caught at the intersection of multiple storm fronts. The emerging labor market is going to be something like that. Some boats will sink. Some very heroic recruiters will fail.
Here are the "storm fronts" in the Engineering Labor Market:
Sustained Growth: Although it doesn't always feel like it, a 4.5% unemployment is all about constant growth. This round of good economic times is less buoyant than the last. The pressure on the supply of workers is actually stronger because the unemployment rate is lower.
Creeping Inflation / Transportation Price Hikes: Whether or not the CPI reflects it (the CPI was altered in the early 90s to make it less useful as a measure of inflation.) $3.50 gasoline is making a difference. We see lines at gas stations when there's a $0.05 price difference. There is a definite economic pinch going on.
Declines in Engineering Supplies: The dot com bust brought massive disillusionment to college age kids. Engineering enrollments have been down for the past seven years. There are fewer engineers.
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