Help Wanted! Indefinitely... The Labor Crisis No One Is Pricing In
The labor market isn’t cooling everywhere. Critical sectors are still struggling to hire, and the financial impact is bigger than most people realize.
Despite reports of a cooling labor market, the reality is more nuanced. Layoffs in the tech and finance sectors have made headlines, and overall job openings have declined from their 2022 peak. Wage growth has slowed from its post-pandemic highs, and labor force participation has inched up. However, these trends obscure persistent and structural labor shortages in key industries that are vital to economic stability and growth.
Healthcare faces a projected 124,000-doctor shortage by 2034, with hospitals struggling to fill nursing positions. Manufacturing firms report that nearly 60% of them can’t find enough skilled workers, even as reshoring efforts accelerate. The construction industry has nearly 1 million unfilled jobs, delaying critical infrastructure and housing projects. The trucking sector remains 80,000 drivers short, a gap expected to double by 2030.
The reasons behind these shortages vary but share common themes. An aging workforce is thinning out skilled labor pools faster than new workers can replace them. Many industries that rely on highly specialized training—such as healthcare, manufacturing, and skilled trades—have struggled to attract younger talent, either due to outdated perceptions of the work or insufficient education pipelines. Meanwhile, pandemic-related workforce disruptions accelerated early retirements and career shifts, further tightening labor supply in these critical sectors.
These shortages aren’t just workforce challenges, though. They’re direct financial risks that will shape corporate earnings, economic policy, and investment returns. And that’s not even to speak of the impacts of AI and that kind of disruption. However, companies that can navigate labor constraints through automation, workforce development, or pricing power should outperform, while those that can’t will face rising costs and operational slowdowns.
The Five Industries Facing a Hiring Crisis
Healthcare
Nowhere is the labor crisis more pronounced than in healthcare. The U.S. is projected to face a 124,000-doctor shortage by 2034, a crisis fueled by the aging of both the workforce and the population. Nearly one-third of nurses are expected to retire by 2030, and hospitals are already struggling to fill vacancies. The vacancy rate for full-time nurses in U.S. hospitals sits at 17%, forcing institutions to rely on expensive contract labor and signing bonuses just to keep operating at capacity.
It’s not all doom and gloom, though - especially in the capital markets. Rising labor costs could have pressured hospital margins, but $HCA has managed to offset staffing challenges—possibly through higher pricing power, efficiency gains, or favorable patient volume trends. Meanwhile, $AMN, which supplies travel nurses and contract medical staff, benefits directly from short-term demand for flexible staffing, though it lacks the long-term pricing leverage of hospital operators - which is potentially what is reflected in the stock price over the last few years.
Skilled Trades
If you need an electrician, plumber, or welder, good luck. The U.S. skilled trades industry is in crisis, with 40% of workers over the age of 45 and far too few young people entering the field. The perception that these jobs are "low prestige" has created a talent gap, even as wages climb well into six-figure territory for specialized roles. Meanwhile, demand keeps rising. By the end of 2025, the U.S. is expected to be short over 500,000 construction workers, a shortage that is slowing everything from housing development to infrastructure projects.
For investors, this crisis has created clear winners. Lincoln Electric ($LECO), which specializes in welding equipment and training, is seeing strong demand as companies scramble to fill skilled labor gaps. Meanwhile, Caterpillar ($CAT), despite the construction labor shortage, has continued to thrive—likely due to its strong pricing power, investments in automation, and the sheer demand for infrastructure projects. At the same time, Rockwell Automation ($ROK) is benefiting from increased adoption of robotics as firms look for ways to reduce dependency on human labor.
Manufacturing
With the U.S. pushing to bring manufacturing back home, companies are running into an unexpected hurdle: a lack of skilled workers. Nearly 60% of U.S. manufacturers cite labor shortages as their biggest challenge. Companies like Intel ($INTC) and Taiwan Semiconductor ($TSM) are pouring billions into U.S. chip manufacturing, but there aren’t enough workers to run their plants.
To solve this, industrial automation firms like ABB ($ABB) and Rockwell Automation ($ROK) are seeing surging demand as manufacturers increasingly turn to robotics and AI-driven systems to compensate for labor shortages. At the same time, companies with strong in-house workforce development programs, like Lincoln Electric ($LECO), are gaining a competitive edge by training the next generation of skilled workers. Rather than relying on traditional staffing solutions, manufacturers are investing in automation and workforce development to close the labor gap.
Construction
Between a housing shortage and a federal infrastructure spending boom, the U.S. construction industry has never had more work. But at the same time, there are nearly 1 million unfilled construction jobs. The $1.2 trillion Infrastructure Bill is funneling money into public projects, but firms simply don’t have enough workers to execute.
For homebuilders like D.R. Horton ($DHI) and Lennar ($LEN), the labor shortage is capping their ability to meet demand. Meanwhile, heavy machinery companies like Caterpillar ($CAT) and Deere ($DE) are investing in automation to reduce dependency on human labor.
Transportation & Logistics
The trucking industry is currently 80,000 drivers short, and that number is expected to double by 2030. Meanwhile, rail and port worker shortages continue to disrupt supply chains, causing freight costs to rise and delivery times to lag.
For trucking firms like Knight-Swift ($KNX) and Old Dominion ($ODFL), rising labor costs are a margin squeeze. But companies investing in logistics automation, like Prologis ($PLD) and GXO Logistics ($GXO), are potentially better positioned for long-term efficiency.
Is there money to be made from the labor crisis?
This isn’t a short-term trend. The structural labor shortages in these industries are creating long-term winners and losers. The way I’m looking at things is that investors should probably focus on companies that can either pass on labor costs through pricing power, automate their way out of the crisis, or actively invest in workforce development to secure their competitive advantage.
I don’t think the market hasn’t fully priced in how labor shortages will impact corporate profitability - it’s such a challenging exercise to do! Companies that ignore workforce constraints, however, will see earnings pressure, while those that solve these challenges will emerge as market leaders. Labor isn’t just a cost—it’s a hidden driver of alpha.
What a weird and wonderful world,
Quick PSA
On a different note, I wanted to share something personal with you all. This year, I’m running the Chicago Marathon on behalf of the American Cancer Society. Cancer has impacted so many lives, including my own, and I’m honored to be running in support of research, treatment, and patient care.
If you’ve enjoyed this newsletter and want to support a great cause, I would truly appreciate any donation toward my fundraising goal. Every contribution, big or small, makes a difference.