There’s a new study by the Employee Benefit Research Institute that sheds light on how the U.S. labor force is evolving. It looks back on employment trends and found a notable drop in the number of people aged 25 to 64 working, even as older folks are stepping in to fill those roles. While participation among people 65 and older hasn’t fully bounced back to its pre-pandemic levels, the prime working-age group has managed to reach theirs.
The study, which covers up to December 2023, dives into various trends since 1975 using data from the U.S. Census Bureau’s Current Population Survey. One of the significant changes is the declining share of the workforce comprised of individuals in their prime working years, attributing this to fewer people in this age group and requiring younger and older generations to fill in the gaps. In particular, the younger crowd, those aged 16-24, represent a record low in workforce participation.
Since 2008, more Americans aged 65+ have become part of the population, making up the largest slice by 2023. Meanwhile, those aged 16-24 held the smallest share, right after the 45-54 age group.
Looking at gender, women aged 65 and older make up the most significant portion of the 16 and older population, yet men in the same category have a larger presence in the labor force. Over the years, there’s been a rise in female participation rates and a drop for males, though both genders were less involved in 2023 than they were in 2008.
From 2000 to 2023, White Americans saw a decrease in labor force participation. However, Black and Hispanic Americans experienced a noticeable increase from 2021 to 2023 after a dip in 2020.
Craig Copeland from EBRI noted that while the difference in participation rates from 1975 to 2023 is minor, under two percentage points, there’s been a substantial shift in labor patterns over the decades. The participation of women went up, while men’s participation declined. Also, since the early 2000s, younger workers (16-19) have had a big drop in participation, whereas older workers have seen a rise.
Copeland also highlights that the age makeup of the workforce is crucial for how companies develop their teams, especially as the next generation, Gen X, is much smaller, indicating an impending drop in workers aged 55 and older. Notably, the U.S. workforce now includes five generations for the first time ever.
