Longer life expectancy as well as years of overspending and debt accumulation along with two decades of precarious financial markets, and lower-than-average income yields, are prompting Baby Boomers (age 73 to 55) to stay in the workforce longer than past generations.
Case in point, the US labor force participation rate for boomers in the 65-69 age group was 32.3% in 2017 compared with 19.5% in 1987. For 70-74-year-olds it was 19.6% compared with 10.2% in 1987. This has placed older workers in direct competition with younger workers looking to for jobs and career experience. It has also prompted younger people to stay in school longer and seek more education. Not surprisingly, Millennials (born 1981 to 1996, now age 23 to 38) are the most educated and student-debt-encumbered generation ever. See more illuminating stats on their wide cultural and ethnic diversity in The millennial generation and Millennials outnumber Baby Boomers.
As a result, Millennials are today in worse financial shape than every living generation that preceded them, and questions are mounting about how and whether they will be able to recover in time to form traditional households, raise children and fund the benefits and investment on which society is depending. See ‘Playing catch-up in the game of life. Millennials approach middle age in crisis:
Hobbled by the financial crisis and recession that struck as they began their working life, Americans born between 1981 and 1996 have failed to match every other generation of young adults born since the Great Depression. They have less wealth, less property, lower marriage rates and fewer children, according to new data that compare generations at similar ages.
Even with record levels of education, the troubles of millennials have delayed traditional adult milestones in ways expected to alter the nation’s demographic and economic contours through the end of the century.
Millennials helped drive the number of U.S. births to their lowest levels in 32 years. That means fewer workers in the future to support Social Security and other public programs for the ballooning population of retirees.
The mainstream is finally catching on that the financial weakness of Millennials–83 million in America compared with 75 million remaining Boomers–is one of the most pressing challenges for consumption-dependent economies and older generations counting on downsizing assets to younger buyers. See: Millennial home-buyers may never come knocking, as an example.
Policies to alleviate what’s binding here must eschew the obsession with debt-fueled consumption and asset bubbles that has dominated for the last 20 years, and instead focus on helping people of all ages reduce debt and increase net income while reducing their cost of living expenditures. This means lowering the cost of education, housing, healthy food, energy and transportation for the masses. Fortunately, technological innovation and fresh thinking can yield much help, but we do need to let status quo business, political and social models evolve in support of greater resource sharing, less waste and more efficiency.
