The labor force is changing, according to a new research report published last week by
the Employee Benefit Research Institute (EBRI). The report took a historical look at
labor force participation and employment data in the United States and found that the
workforce’s prime working age population (25-64 years old) has significantly declined.
But their roles are filled by older workers. However, the labor force participation rate of
people ages 65 and older hasn’t reached its pre-pandemic level, while that of the prime
working-age population has reached that level.
The report, Trends in Labor Force Participation and Employment of Americans Ages 16
or Older, examines the U.S. civilian labor force through December 2023, using data
from the U.S. Census Bureau’s Current Population Survey.
Baby boomers and the American labor force have grown older at the same time. The
new research evaluates several civilian labor force trends (going back to 1975),
including labor force participation rates by age and gender and shares of the U.S.
population.
Key labor force trends
The share of the labor force of prime working ages (ages 25–64) has significantly
decreased since the mid-1990s despite the labor force participation rates of individuals
of these ages remaining near mid-1990s levels. The decline is driven by the smaller
number of people of these ages (meaning that younger and older Americans are
needed to cover this decrease) in the workforce. So far, the older population has filled
the gap since those aged 25 and younger are at near-record-low levels for their share of
the labor force.
Starting in 2008, the U.S. population, ages 16 and older, became increasingly
composed of Americans aged 65 and older. By 2023, this age category comprised the
largest share of the population. Americans aged 16-24 were the smallest proportion of
this population, while those aged 45-54 were the second smallest group.
Gender breakdown of U.S. workforce
When looking at a breakdown by age and gender, females aged 65 and older make up
the largest proportion of the country’s population (ages 16 and older) “by a sizable
margin.” Yet, males of the same ages comprised a comparatively larger share of the
labor force, with the labor force gaps being smallest among the youngest and oldest
age ranges.
From 1975 to 2023, the labor force participation rates of those aged 16 and older were
relatively constant. But, participation rates increased for females and decreased for
males, though both genders had lower participation rates in 2023 than in 2008.
Ethnicity breakdown of U.S. workforce
From 2000 to 2023, labor force participation rates of White Americans aged 16 and
older declined. However, from 2021 to 2023, after falling in 2020, the labor force
participation rates for Black and Hispanic Americans increased sharply.
Workforce participation1975 to 2023
Craig Copeland, director, Wealth Benefits Research, for EBRI says, “Despite the
difference in labor force participation (LFP) rates between 1975 and 2023 being less
than 2 percentage points, significant changes in labor force patterns and composition
have occurred over the past several decades.”
Over this timespan, LFP rates decreased for men and increased for women (though
female LFP rates have trended down since the 1990s). At the beginning of the 2000s,
there was a significant decline in the LFP rate among those aged 16-19. And workers
aged 65 and older experienced an increase in the LFP rate.
Copeland adds, “The age of the labor force will play an important role in companies’
workforce development.” Plus, he explains Gen X, the generation following the baby
boomers, is much smaller, so “a decrease in the share of workers aged 55 and older is
imminent.”
And, according to the Bureau of Labor Statistics, for the first time ever, five generations
of Americans are in the workforce.
Rieva Lesonsky is CEO of Small Business Currents LLC, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at rieva@smallbusinesscurrents.com, follow her on Twitter @Rieva, and visit her website SmallBusinessCurrents.com to get the scoop on business trends and sign up for Rieva’s free Currents newsletter.
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