Author: Andrew Berger-Gross
The LEAD Feed has covered the labor market impact of an aging workforce from a couple of different perspectives so far, looking at the impact of workforce maturation on labor force participation rates and average earnings. Although these articles have highlighted important trends in the age of North Carolina’s labor force, they have provided less information about the labor force status of workers born into particular generations.
When evaluating demographic changes in the labor market, we should look at not only how old workers are, but what cohort they belong to — i.e., when they were born. Persons born 1945 or earlier are often referred to as the “Greatest” generation, while 1946 to 1964 births are typically identified as “Boomers,” 1965 to 1979 births belong to “Generation X,” and persons born 1980 and afterward are sometimes classified as part of the emerging “Millennial” generation.
The past 20 years have seen the population of adult Millennials in North Carolina increase steadily while the Greatest and Boomer generations have dwindled.
Meanwhile ever-smaller shares of the Boomer and Greatest generations are participating in North Carolina’s labor force, while Generation X has reached peak participation rates and Millennials are slowly gaining ground.
The big question for labor market watchers will be, as the Boomers retire and the Millennials constitute a larger share of the population, will these younger workers start to play a greater role in the workforce? In 1995 — when the eldest Generation Xers were 30-years old — 75 percent of the GenX cohort were working or looking for work. In 2010 — when the first Millennials turned 30 — only 64 percent of the Millennial cohort were in the labor force.
Potential explanations for the Millennials’ failure to launch run the gamut from cyclical economic weakness (insufficient job growth), to rising education demands, to increased competition for entry-level positions from both low-skill and high-skill workers. Further clarifying the reasons for this gap will be essential to formulating an effective workforce development strategy for North Carolina’s changing population.
General disclaimers:
The Current Population Survey (CPS) estimates are based on a survey and are subject to sampling and nonsampling error. Note that the state-level CPS estimates are not directly comparable to state-level labor force estimates from the Local Area Unemployment Statistics (LAUS) program due to differences in methodology. Any mistakes in data management, analysis, or presentation are the author's.