Age Discrimination
on the Rise By RICHARD WORKS
During the past few decades, a combination of decreasing fertility rates and increasing life expectancies has aged the U.S. population and labor force. The labor force is getting older if the share of those under 25 years of age declines, or if the share of those 55 years and older increases. By 2026, the labor force should be much older and the average age of the labor force will have increased. In this article we’ll take a look at the employment projections from the Bureau of Labor Statistics through 2026.
The overall labor force participation rate peaked at 67.1 percent from 1997 to 2000. After the 2001 recession, it trended downward. In the aftermath of the 2007–09 recession, the overall labor force participation rate plunged sharply and continued a decline, registering at 62.7 percent in 2015. It changed slightly in 2016, increasing by 0.1 percentage point to 62.8 percent. As a result, the labor force participation rate had dropped by 4.3 percentage points by 2016 from its peak in 2000.
The civilian noninstitutional population is projected to grow by 24.6 million, reaching 278.2 million in 2026. The percentage of the youth (16 to 24) and the prime age (25 to 54) groups in that population are will decline over the period (see figure 1). In contrast, the percentage of those 55 years and older are projected to increase significantly. These changing demographics in the population will effect on the labor force, economy, and employment over the decade. The overall labor force participation rate will decline as older workers leave the labor force, putting a constraint on economic growth. The aging baby-boomers will drive demand for healthcare services and related occupations.
The continued shift of the population into older age groups will have effects on the labor force and the overall labor force participation rate. In 1996, the entire baby-boom generation was in the prime age group with a participation rate of 83.8 percent (see figure 2). In 2001, the first of the baby boomers moved into the 55-and-older age group. The labor force participation rate of the older age group, which had been increasing since 1995 from a rate of 30 percent, peaked in 2012 at 40.5 percent and declined slightly to 40.0 percent in 2016. The overall labor force participation rate is projected to decline in the next decade because of the labor force moving into higher age groups with lower participation rates as the population ages.
Figure 1. Population share by age group
Figure 2. Labor force participation rate by age group
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