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Generational Influences in the American Labor Force

 

Generational characteristics pervade every society.  While they often extend beyond national boundaries, it is interesting to think about how the different generational influences in America are likely to profoundly influence the labor force over the next decade.

The reader will find it useful to refer to the table shown below as we proceed. The table identifies major generations born in the 20th Century that still contribute to the American labor force. The current (2012) age ranges of the four groups often discussed are given in the table, as are their age ranges for the year 2021.  The latter year is a point of focus in the discussion that follows on how the labor force will change in character over the next 10 years, a length of time that may be necessary for us to overcome the consequences of the Great Recession of 2008.

 

 

 

 

Birth range       Generational Identifier         Age Range 2012       Age Range  2021

1922-1945             Veterans-Silent                             67-90                              76-99

1946-1964              Baby Boomer                                48-66                              57-75

1965-1980              Generation X                                  32-47                             41-56

1981-1999           Generation Y,  Millennial              13-31                              22-40

The veterans of World War II were mostly born before the 1929 stock market crash that led to the Great Depression, while those in the Silent Generation were born during the Great Depression and through to the end of World War II.  These groups are taken together as one combined generation. They are all past official retirement age, taken here as 65.   While some of them may still be in the labor force, they are increasingly removed from it.

The Baby Boomer cohort is about 80 million strong and represents about half of the current labor force. They should be steadily retiring over the next 18 years. By 2021, had the economy not been shocked by the Great Recession of 2008-9, we would have expected more than half of them to be retired. But many in this group, whatever their current age, now believe that retirement will be difficult.  They may have lost significant amounts of money in the market, money they were counting on for retirement. They may have lost money in the housing market, even if they still own a home that is largely or completely paid for.

While these factors may be influencing their retirement planning, many  Boomers may have planned to work beyond the age of formal retirement anyway.  This generation has always tended to regard work as an exciting adventure, in some cases almost a crusade, something from which they received, and indeed still receive, great personal fulfillment. Some of them have always been workaholics and simply find it extremely difficult to give up the power and prestige associated with their jobs. Unless forced into retirement, they may never give up their positions. Some may need to be carried out. This is especially true if they sense they are needed by their younger and older colleagues .  Boomers derive great motivation from being valued.

On the negative side, Boomers tend not to have a lot of balance between work and life. That does not set well either with Generation Xers or Millennials, both of whom like balance. In addition, many Baby Boomers have been victims of layoffs, firings and perhaps forced early retirements or restructuring. If they have needed skills, they are likely to find another position, even as the economy heals slowly. They may in some cases create their own businesses, but they’ll be certain to do something, especially if they are in the early part of the Boomer age range (48-55) as of 2012.  Boomers are optimists and seek involvement in meaningful work. They are workaholics—they have to work at something!

Generation Xers are far from retirement.  There are 50 million of them. If they are not working, they are likely having difficulty finding a job comparable to the one they had.  If they have found work, chances are it is for less money  and maybe even part time with far fewer benefits. They’ve reorganized their lives as best they can and may have already downsized and cut expenses where they can. They may have lost a significant part of their 401K or comparable retirement funds and further may be underwater with their mortgages. In the latter case, they’ll have trouble relocating if a good job alternative comes up elsewhere. For them, the Great Recession may have come at a bad time. For at least 40% of Generation Xers, career development has been put on hold or may be moving backward.

Generation Yers or Millennials are entering or beginning to enter the labor force in significant numbers, but a quarter to a third of them are not yet at an age where they are ready to enter the labor force permanently. They are 76 million strong and so will make big changes in the labor force as they enter. Even though they are only getting started, perhaps as many as 20-30% of them are having trouble starting the kinds of careers they want.  Also, many are still in high school and planning on going to college. Many are in the military. Indeed, the Armed Forces are the top employer of Millennials.http://www.msnbc.msn.com/id/45987983/ns/business-forbes_com/t/top-employers-gen-y-workers/  Millennials are multitaskers, very computer savvy, entrepreneurial, tolerant and goal-oriented. They like social interaction and work well in groups to which their bosses have provided leadership and structure.  The leadership style Millennials will provide is obviously yet to be determined.

Where will we be in 2021?

One assumes that many of the combined Veteran-Silent generational cohort will have left the room, so to say, by 2021. Very few will remain in the Labor Force. In addition, over half of the Baby Boomers will have retired or at least passed official retirement age. It’s hard to imagine, however, that some of them won’t be running some incredibly interesting businesses and making money at it. Boomers know how to push the buttons of Millennials.  That knowledge could produce some interesting results.

Generation Xers will be of an age where the lower half of the Baby Boomers are now. Generation Xers are entrepreneurial, self-reliant and thrive in structured environments.  They are not afraid of work and should be able to adjust to changes that occur in the work place in the next 10 years. They tend to be skeptical, cautious and conservative.  Unlike “buy now, pay later” Boomers or Millennials, who earn money in order to spend it, Generation Xers tend to be savers. When money is needed to get a business started,  Generation Xer are likely to be the ones with money in the bank.

Within a few years of 2021 the Millennials will represent well over half the labor force, unless they are off to fight wars somewhere (including some they may start). There are not likely to be many manufacturing jobs or any other jobs that can be easily performed by some combination of robotic and artificial intelligence. That’s good because Millennials currently show little if any interest in such work. They prefer to work in teams where there’s a high level of fun, outright enjoyment, and high social capital. The work itself is the means to an end. They want fulfillment from the work they do. They want it to be structured and meaningful. They want to work with creative, bright people, multitasking, speeding between tasks, and maybe above all never getting bored. It’s going to be fun to see how all that works out.

Please Follow Richard on Twitter: https://twitter.com/pebblerick

 

Richard A. Hudson is a writer, reader and blogger committed to exercise, proper nutrition and health.  He’s interested in politics, economics, alternative energy, gardening and sustainability and has written brief essays on many of these topics on his bloghttp://richlynne.wordpress.com.  Despite his generally positive and optimistic views about globalization, he wonders whether we will survive current destructive forces that increasingly promote warfare among political and social classes. He is also beginning to think about the declining influence of the know-it-all baby boomer generation just as the next generation born in the 60s begins to slowly stumble into a dominant position in the U.S.

 He received a Ph.D. in organic chemistry from the University of Chicago (1966) and subsequently spent 42 years in academics, gradually developing all sorts of interests well beyond his basic training.  He ended his academic career in 2008, having published about 100 scientific papers, reviews and commentaries.  In his last several years in the academy, his role as Dean of the Graduate School afforded him many opportunities to interact with students from all over the world seeking graduate degrees.

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