With today’s economy still struggling to right itself, competition for employment is fierce. The battle lines have been drawn, with baby boomers competing with their children’s generation for jobs. [3]
This archetypal conflict between generations pits the 36.9 million boomers against the 42.5 million workers of their children’s generation. Who will ultimately win this epic struggle for dominance of the workplace? So far, the results are inconclusive.
According to the Government Accountability Office (GAO), at first glance it would appear that the youth are winning. According to the GAO, over half of all workers in the 55-64 year old age group have unsuccessfully sought work for over six months. That translates to a 6.6% unemployment rate. Older workers face reluctance from some companies to hire them. Employers may fear increased insurance costs, or they may be unwilling to train older workers who will retire a few years later.
In spite of these hurdles, workers in the over 55 age bracket were the only group of workers who showed a net gain in numbers in the work force from 2002-2011, according to Diana Furchtgott-Roth of the Manhattan Institute. Whether this is a result of workers aging in place or re-entering the labor pool is unclear. It is likely that some of the increase can be attributed to older workers going back to work due to the loss in value of their homes or retirement accounts.
Meanwhile, the unemployment rate for workers aged 20-29 is 12.3%. For teens the rate is around 25%. For African American teenagers, the rate rises to 40%.
The millennial generation also faces a staggering student debt burden. Thanks to rising tuition and fees, young people [4] in their 20s hold $294 billion in outstanding student loans. With such high unemployment rates and declining starting wages, it is unlikely that the millennials will be able to pay those loans on schedule. Without disposable income after basic living expenses and loan payments, young people will be unlikely to afford home or car purchases.
Boomers, on the other hand, hold $162,000 in median net worth. Those over 65 were 42% wealthier than their counterparts in 1984, according to the Pew Research Center. Additionally, boomers were better off as young adults. Those who were 35 years old or younger in 1984 had 68% more wealth than the same age group had in 2009.
Young workers [5]just starting out are unlikely to have an economic cushion on which to fall back in times of financial stress. With decreasing expectations of financial stability regardless of education or effort, younger workers are increasingly opting out. The percentage of young workers in the labor pool has been decreasing since the recession of 2001.
Some of the decline may be caused by millennials returning to college or staying in college longer. It appears likely, however, that some of the decline can be attributed to employers choosing older, more seasoned workers over those who are just starting out, according to Richard Fry (one of the writers of the Pew report).
Not only are young workers losing faith in their financial futures, they may also be losing faith in the value of a college education. Escalating costs combined with a heavy loan burden and grim prospects for gainful employment may well translate into the devaluation of a university degree. Even if statistically college-educated workers make significantly more than those without a degree, the added burden of loan payments may well counteract those numbers for some young adults.
Ultimately, there are no winners in the employment battle. Both sides are actually fighting against a weak economical future.