Help Wanted – The US Needs More Workers

Summary 

Peter Zeihan examines recent U.S. labor market data and argues that the apparent slowdown in job creation reflects deeper structural shifts rather than a simple cyclical downturn. He notes that while the U.S. normally adds around 300,000 jobs per month, October showed a reported loss of 100,000 jobs and November added only about 60–65,000. Zeihan cautions against taking these figures at face value, citing survey disruptions from government shutdowns and the Trump administration’s weakening of the Department of Labor, which has undermined the reliability of employment data.

Beyond data quality issues, Zeihan highlights unusual behavior in hiring patterns. Seasonal holiday hiring, especially in blue-collar and inventory-related roles, failed to materialize as expected. He suggests employers may be cautiously testing early-stage AI as a substitute for labor, even in areas not typically associated with automation, creating crosscurrents that make the labor picture harder to interpret.

The core of Zeihan’s argument is demographic. The baby boomers—once the largest labor cohort—have largely exited the workforce, while Generation Z is the smallest entering cohort in modern U.S. history. As a result, he estimates the labor force is shrinking by roughly 500,000 to 750,000 workers per year, a trend that will worsen over the next decade. This means the long-standing benchmark of 300,000 new jobs per month is no longer a realistic standard.

Zeihan concludes that a shrinking labor pool virtually guarantees persistent inflation. Anti-immigration policies further tighten labor supply, while rising productivity through AI and new technology becomes the only viable offset. However, productivity gains require capital investment at a time when retiring boomers are drawing down savings. The net result, he argues, is inflation that is structurally embedded in the U.S. economy—especially in the labor market—regardless of short-term policy choices.