You Might be Surprised at the National Employment Trends When Examined by Age Group

One of the areas of interest regarding the national economy is what role demographics are playing. When we look at the employment situation, what we find is that the media coverage of the monthly Bureau of Labor Statistics (BLS) employment report focuses primarily on the total number of jobs being created, the unemployment rate and wages. Within the monthly report is a large quantity of additional data and one of those data sets is information regarding employment by age category. If we want to gain some perspective on demographics as it relates to employment, this is the most logical place to start. What the data shows may surprise you.

The BLS provides a breakdown of employment by the following age categories:

• 20-24
• 25-34
• 35-44
• 45-54
• 55 and over

Note: The 16-19 age group was not included since this is a group that typically is still in school and a very small part of the total employed.

Although there are differences of opinions as to where Generation X stops and the Millenials start, for the purposes of this article, Millenials will be classified as the first two age categories (20-24 and 25-34), Generation X as the next two age categories (35-44 and 45-54) and the Baby Boomers as the 55+ category.

Using that assumption, let us examine two different time frames to see how these three groups have fared.

• Change in employment from the start of the recession (December 2007) until now (November 2015);
• Change in employment from the start of the recovery (June 2009) until now;

The graph below illustrates the change in employment from the start of the recession until now.

What quickly jumps out from this graph is that cumulative growth in employment for the Baby Boomers never turned negative during the recession, while other age groups suffered a decline in employment during the recession.

This raised the question as to whether that trend was the same if you only looked at the trend since the recovery began. As the graph below illustrates, the answer is yes.

Once again, the disparity is dramatic with strong cumulative employment growth from the Baby Boomers and continued suffering from Generation X. This size of the change is different but the trend is the same. Even since the recovery began, Generation X has not returned to the employment levels that existed at the start of the recession. The Millenials have fared better with positive cumulative growth occurring since 2014.

What these graphs highlight is that age demographics truly mattered when it came to employment growth. Without having all of the background information that would help add insight into what was causing this, there are a few observations that can be made:

1. Generation X suffered the worst impact of the employment loss during the recession and have been the slowest to recover. This has implications for the future, since in a normal economic environment, Generation X should be moving up their career ladder and their earnings curve. This would then allow them to increase their spending and help offset the reduced spending of the retiring Baby Boomers. If Generation X is slower to recover their employment, then this delays or permanently lowers their earnings growth and ultimately their ability to spend. This could mean that 2-2.5% economic growth may be the “new normal” for a while.
2. Employers appear to like hiring Baby Boomers. Maybe this is because they have more experience and are more of a known quantity. This may be impacting Generation X if the Baby Boomers are taking jobs that the Generation X unemployed might have filled if not for the Baby Boomers.

For those of us who are baby boomers but have not reached retirement age, the disturbing questions are:

1. Is this proof that many Baby Boomers failed to properly plan for retirement and need to re-enter the work force? or
2. Are Baby Boomers failing at retirement (i.e. too boring, played enough golf, spouse kicked them out of the house and back into the office, etc.)?

No matter what the answer is, this trend will bear monitoring. Growth in employment is important but as the above information shows, it is also important to go behind the headlines of overall employment growth and understand who is seeing growth in employment since this may ultimately impact prospects for economic growth.

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