Historic Labor Market Shrinkage Bolsters Case for AI, Economist Says

HR Dive · United States · Aug 11, 2026

The labor force participation rate for U.S. workers 55 and older fell to 36.9% in July 2026, down from 38.1% a year earlier, as baby boomer retirements accelerate a historic exit from the workforce, according to RSM US Chief Economist Joe Brusuelas. Restrictive immigration policies have compounded the labor supply squeeze, with the U.S. recording negative net migration for the first time in at least 50 years during 2025. Brusuelas argues these dual pressures — shrinking older-worker participation and reduced immigration — make AI adoption an economic necessity for U.S. businesses, with global AI spending projected to reach $2.6 trillion in 2026 and $5.62 trillion by 2030. The tightened labor supply now means the economy needs to add only ~35,000 jobs per month to maintain stability, a key benchmark for staffing agencies gauging placement demand.