In April 2021, I spoke with demographer Dowell Myers as part of my research for a book I was writing about the baby boom. During that conversation, Myers made a prediction that has stuck with me since.
At the time, the unemployment rate was 6.1 percent, down from the pandemic high but apparently plateauing. There were still more people looking for work than there were jobs, though that ratio had itself been narrowing.
Two years later, it’s clear that Myers was right.
Speaking to Bloomberg on Thursday, Commerce Secretary Gina Raimondo summarized the central challenge businesses are facing in three words: “workforce, workforce, workforce.”
“We can’t hire enough, we can’t hire fast enough, we can’t hire people with the skills we need,” she said, paraphrasing what she’s been hearing.
Over the past year, there has been an average of 1.8 open jobs for every person looking for work. The relationship between jobs and workers was inverted briefly before the pandemic but not to the extent that it is now.
In the Bloomberg interview, Raimondo didn’t offer particular insight into why this relationship had shifted in the direction that it has. But this was part of my conversation with Myers: The workforce has gotten steadily older and more people are retiring. One reason we’re “gasping for workers” is that the baby boom has hit retirement age.
Somehow, despite 70 years of the same pattern repeating, the role of retiring boomers doesn’t come up a lot. Since the boom began in the mid-1940s, America’s economy and government has had to accommodate it. Yet the arrival of the boom at age 65 (as happened in 2011) didn’t attract much attention as an inflection point, nor did the fact that people born in the boom’s biggest year, 1957, hit 65 last year.
Using data from the Bureau of Labor Statistics (BLS), you can see how the density of older Americans in the pool of working people has increased. When younger Americans fret about older Americans holding onto jobs and preventing upward mobility — anecdotal complaints that are certainly often valid — it’s in part a reflection of having so many more older Americans than we used to.
From 1948 (the first year for which the BLS has data) until 2010, workers ages 55 and older never made up more than 20 percent of the workforce. Since 2010, not only has the percentage been consistently above 20 percent, but people in that age group are now the plurality of workers.
You can see a pattern there. First, the red line rises — workers ages 25 to 34. Then, the purple line rises, indicating those 35 to 44. Then the blue line and, finally, the green one. If we add shading to show the periods in which members of the baby boom generation were in those age ranges, the effects of the boom become obvious.
Notice, too, that the green line has plateaued. Following the pattern established with the red, purple and blue lines, it’s going to start heading down. But there’s no older category of workers for them to join. They are leaving the workforce.
The effects of the boom are even more dramatic when we look at the total number of workers. Wave after wave of workers in each age group, with another wave on its heels.
Notice, though, that except for the youngest age groups, each baby boom surge boosted the number of workers in that range — and that the increase then held. The number of 25-to-34-year-old workers rose along with the boom and then just dipped a bit as the next generation, the smaller Generation X, hit that same age. But there were a lot of boomers having Gen X babies, so there were still a lot of 25-to-34-year-olds in the pipeline.
After the X lull, the number of workers in that age range ticked back up. Here come the millennials, also starting to drive the purple, 35-to-44 range back upward. (It is generally agreed that millennials were born from 1981 to 1996, making the oldest 42 this year.)
The challenge is that on any given day in 2021, about 11,800 people turned 25 — the start of prime working age — while 10,800 turned 65. In 2003, about 10,500 people were turning 25 each day but only 5,800 hitting retirement age. Because, to belabor the point, the oldest boomers turned 57 twenty years ago.
When we spoke, Myers had a solution: increase the number of younger workers by increasing immigration. The challenge, of course, is that changes to immigration policy are dependent on political will.
The natural aging process is not.