Older Americans to dominate growth in labor force by 2016
You know that gray-haired gentleman who greets you when you enter Wal-Mart? Get used to him; he is the wave of the future. According to a new report by the Pew Research Center, over the next 10 years the age dispersion of the American labor force will skew considerably older.
The Bureau of Labor Statistics projects that by 2016:
- The number of people in the labor force ages 16-24 will actually drop by 1.5 million
- Those falling in the 25-54 age bracket will increase by 2.5 million
- Those falling in the 55+ age group will increase by 11.9 million. Those 55-64 will increase by 7.3 million, while those 65-74 will go up 3.6 million
One reason for this shift is obvious; the boomer bubble is approaching its golden years. The growth in the U.S. labor force (total population minus children, those in the military, and those in institutions or otherwise unable to work) has slowed to .9 percent per year. Our declining fertility rate means couples are averaging only 2.1 children per, barely replacement rate. The result is the boomers will continue to look like a pig in a python on an age chart of the country.
Other reasons for the graying of the work force are less obvious. The relationship of the boomer generation to work is considerably different than that of its parents. From 1950 to 1980, the heyday of the pension, the labor force participation by older workers fell, but it has been climbing steadily ever since. The BLS found that older Americans are working longer because:
- Better health means they are able to
- Better education opens up more opportunity
- The trend away from pensions to defined contribution plans means there are no deadlines for retirement
- Workers must wait longer to collect full Social Security benefits
- The cost of health care is going up as benefits are going down
- To feel useful
- To live independently
- To have something to do
- To socialize
Older workers are also happier than workers of other ages in their jobs: 90 percent report they are entirely or mostly satisfied with their work. Only about half retire by choice: 32 percent are forced to by health reasons, while 9 percent are forced to retire by their employers.
The graying of the work space is not only due to an increase in older workers; young people ages 16-24 are much less likely to enter the workforce now. The percentage of eligible workers in this age group with jobs was 68.6 percent in 1986, but only 60.6 percent in 2006 and is expected to reach 57.1 percent by 2016. The BLS conjectures that this is due in part to extended education, especially college, reduced opportunities available in the recession economy, and increasing family affluence.
One of the main factors that changed the age distribution of the American workplace during the past 40 years was the entry of women into the labor force. While 59 percent of women are now in the labor force, this percentage that has not changed substantially in ten years. Of the women with full time jobs outside the home who have small children, 61 percent would prefer to work part-time. Only 19 percent of fathers in the same situation would make this choice.
What will this mean to the workplace? A more deliberate pace? Less rush to innovate? More conservative spending? Greater pressure to address employee health needs? Much as the inclusion of women and minorities into the work force reshaped our working lives, look for the demographic skew toward experience to bring about change. Important change; we can't all work as greeters.