A rising jobs tide isn’t lifting all boats equally.
Friday’s jobs report shouldn’t break the benign trend of sub-5% unemployment rate and improving wage growth. But the economic recovery has been uneven in the generational rivalry between millennials and baby boomers. Millennials, who surpassed boomers in sheer numbers last year, account for more than one-fourth of the nation’s population. But they are seeing relatively slower progress on the labor front.
Consider the Labor Department’s employment-population ratio, which measures the share of people who are employed. Among millennials between ages 25 and 34, it hit 77.5% in October. While that figure has risen for much of the past five years, it still hasn’t reclaimed its prefinancial crisis high of 80% in March 2007 or its all-time high of 82.3% in April 2000.
The numbers are even worse for younger millennials. Roughly half of those in the 16-to-24 age range are employed, far closer to the all-time low of 44% in January 2010 than the peak of 62.1% in August 1989.
By comparison, a slice of the baby-boomer generation has fared much better in this regard. The employment-population ratio among those between ages 55 and 64 hit 62.2% in October, matching the highest since November 2008, just shy of the 62.8% record in March 2008.
Some of these trends are benign: Young people are staying in school longer and older people are staying healthy. The shift from blue collar to less physically taxing jobs makes remaining employed easier as well.
But it is also true that younger people could be having a tougher time getting on the jobs ladder. What is more, even their lower employment-population ratio might paint too rosy a picture since the measure doesn’t distinguish between part-time or full-time jobs.
Conversely, the fact that people nearing traditional retirement age or even beyond are more likely to be in the labor force isn’t an unmitigated positive. A big part of the government’s role in fostering a recovery has involved a trade-off: Interest rates are too low for many to live comfortably on a passive income. And rising health-care costs for those not yet eligible for Medicare, or even those who already qualify, may make staying employed a necessity.
Friday’s jobs report is the last before the Federal Reserve’s next policy meeting, where it is widely expected to raise rates. As some boomers’ quandary shows, monetary policy is a blunt instrument with unintended consequences.
Write to Steven Russolillo at [email protected]