Decline in Labor Force & Increase in Dependency Ratio
The slowing of population growth in the OECD nations will alter the age pyramid as Baby Boomers retire. Disturbingly, labor force participation rates have declined from about 66% in 2008 to 63% in Q1 2019: See the BLS trends. Fewer workers will be asked to support the overall population, a rising dependency ratio after a sharp decline from 1960 to 2015: see World Bank trend data. An older population distribution and a rising dependency rate will inhibit economic growth, as reported by the St. Louis Fed.
The partial replacement by new entrants to the labor force will, however, increase employment opportunity for younger workers, provided that their education and skill level matches the demand for well-paying jobs. Meanwhile, the declining immigration of potential workforce from the global south will create spot shortages in regions and industries.
Thus, a labor shortage may emerge: Wages will rise with competition. Despite rising interest rates, investment might follow the increase in wages. Productivity could increase, marginally improving income and dampening the expected wage inflation.
I find that the discussion around this topic focuses on technological displacement of labor. David S. Gordon, a seminal authority, disagrees with automation replacing workers, but does not see productivity improvements.
More on this as my project unfolds, but recognize that future unemployment may not be as severe as some suggest, that wages may rise (eating into profit), thus demand would also rise, and that more investment could raise worker productivity — all benign prospects.