23 Apr Workforce aging as boomers stay on the job
Originally posted April 16, 2014 on www.benefitspro.com by Dan Cook.
There’s certainly no shortage of advice on managing millennials in the workforce. But when it comes to sheer numbers, baby boomers remain the dominant generation, thanks in large part to that generation’s working women.
The Employee Benefit Research Institute has further quantified boomers’ role in the workforce by crunching data found in the U.S. Census Bureau’s Current Population Survey. EBRI’s report, “Labor-force Participation Rates of the Population Ages 55 and Older, 2013,” reveals that more than 40 percent of today’s workers are age 55 or older. Additionally, participation has been increasing among the oldest age groups — those 60-64 and 65 and older.
The study found that the participation by those 55 and older steadily fell from 1975 to 1993, bottoming out at 29.4 percent. Then, the trend reversed. The current peak participation by this age group occurred in 2012, when 40.5 percent of all workers were 55 or older. That percent dropped to 40.3 percent last year.
Working older women account for much of the trend.
”The increase in labor-force participation for the age groups below age 65 was primarily driven by the increases in female labor-force participation rates, as the male labor-force participation rates of those ages 55–59 and 60–64 were lower in 2013 than they were in 1975,” the study said. “In contrast, female labor-force participation rates for those ages 55–59 and 60–64 increased sharply from 1975–2013, despite some leveling off in 2010–2013.”
EBRI said women ages 55 to 64 comprised 47.9 percent of that age group in 1975. By 2013, they made up 67.2 percent of workers in the category. Other older worker subgroups showed the same trend, with the number of women increasing vs. men.
When viewed strictly by age rather than gender, the participation of younger workers declined between 1997 and 2012 as that of their elders increased.
“In 1997, workers ages 25–54 accounted for 83.9 percent of all workers ages 25 or older, while those ages 55-64 accounted for 12 percent, and those ages 65 or older, 4.1 percent. By 2012, those ages 55-64 represented 19.2 percent, and those 65 or older 7 percent, while the percentage of workers 25 or older represented by those ages 25-54 had fallen to 73.8 percent,” EBRI reported.
“The upward trend in labor-force participation by older workers is likely related to workers’ current need for continued access to employment-based health insurance and for more years of earnings to accumulate savings in defined contribution (401(k)-type) plans and/or to pay down debt,” said Craig Copeland, senior research associate at EBRI and author of the report. “Many Americans also want to work longer, especially those with more education for whom more meaningful jobs are available that can be performed into older ages.”
There may be a downside to this trend, Copeland noted.
“The data raise a basic question: Are older workers filling the void or displacing opportunities for younger workers?” Copeland said. “The fact is, older workers are more plentiful in the labor force today, whether a result of financial circumstances related to the lack of sufficient or adequate accumulation of resources for retirement or because of the desire to continue to remain actively engaged and productive.”