America’s workforce has grown considerably older and more diverse

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By Alicia Wallace, CNN Business

America’s workforce is considerably older and more diverse than it was some 40 years ago.

Federal labor economists recently analyzed federal labor data to see how the country’s labor force has changed in recent decades, according to a September 1 blog post on the US Bureau of Labor Statistics website.

Examining data from the Consumer Population Survey, economists looked “from peak to peak,” focusing on 1979 and 2019 – two strengths of employment and economic activity.

Here’s a quick look at how the U.S. workforce has evolved and some of the reasons for the biggest shifts in its makeup.

The workforce is arguably older

In 1979, people aged 65 and over made up 3% of the country’s labor force, the smallest contingent. Adolescents aged 16 to 19 were the second smallest cohort at 8.2%, according to data from the CPS.

Forty years later, that trend has reversed: 6.6% of the country’s workforce were people aged 65 and over, while 3.2% were older adolescents. In addition, the share of the 55 to 64 age group increased by 5.5 percentage points to 17.2%, while the share of the 20 to 24 age group decreased by 6 percentage points to 8 , 5%.

These percentage changes largely show the effects of generational change – including the aging of the massive baby boomer population – but that’s not the only reason, said Joe Piacentini, economic adviser to BLS commissioner William Beach.

Other contributing factors include medical advancements that have led to longer lives, less physically demanding jobs, and declining adolescent labor market participation. Fewer adolescents are working today than a few decades ago, mainly because there are greater focus on schooling and educational attainment.

Age composition has important effects on labor market dynamics, said Serdar Birinci, an economist at the Federal Reserve Bank of St. Louis. Notably, older workers change jobs less frequently, he said, adding that the “Job change rate” is a good predictor of future wage growth.

“One of the potential risks of an aging population is actually lower wage growth in the economy,” Birinci wrote in an email to CNN Business.

In turn, this could have an effect on monetary policy and mitigate its effects on transition rates to employment, wage growth and inflation, he said.

“An important implication of this finding is that the lack of wage growth and inflation observed after the Great Recession (between 2010-2019) despite the low interest rate policy regime during this period may be in effect. part due to the relatively higher fraction of older workers. in the US workforce, ”he added.

The labor force is more educated and has fewer married couples

In 1979, nearly two-thirds of America’s labor force consisted of married workers, according to BLS data. Forty years later, that share was just north of 52%.

Labor force data largely follows broader societal trends: in recent years, less people has been hang on. People have become less inclined towards the idea of marriage, something generally attributed to a variety of factors, including level of education and labor force of women, declining religious participation and economic pressures, among others.

The relationship between marital status and labor force trends is the subject of research, with some studies concluding that gender-specific social norms lead to increased participation of men in the labor market and lower labor market outcomes. women in the labor market, Economists at the International Labor Organization have found it.

Today’s workforce is also made up of a higher share of workers with university degrees, according to Birinci of the St. Louis Federal Reserve Bank. He noted that the share of people aged 25 and over with a bachelor’s degree rose from 17% in 1980 to around 34% in 2015.

The workforce has become more diverse

Changes in the labor force align with broader demographic trends that show growing racial and ethnic diversity in the USA. Long-term data from the BLS shows that the share of non-white American workers rose to 22.3% in 2019, from 11.7% in 1979, and the fraction of Hispanic or Latino workers, regardless of race, is increased from 5% to 18%.

The participation of women in the labor market increased considerably from the 1960s to the 1980s before slowing down in the 1990s, according to BLS. In the peak-to-peak comparison, the share of women in the labor force stood at 47% in 2019, up 5 percentage points from 1979.

However, the progress of women in the labor market has been radically changed during the Covid-19 pandemic. They were disproportionately affected because female-dominated industries suffered the biggest losses and most of the family responsibilities have fallen on women’s shoulders while schools and daycares have closed.

Separately, because federal data on the economy and employment do not fully follow Aspects such as sexual orientation, gender identity and gender expression, the extent of long-term changes in LGBTQ + labor market participation is unclear.

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