Baby boomers at work while millennials sit out of job force
Baby boomers are still working and that's helping to prop up the job market, according to new figures from the Labor Department.
It was reported that 209,000 jobs were created in June. The overall unemployment rate ticked up to 6.2%.
Dan Alpert of Westwood Capital said he encouraged to see that “30% of jobs (were) created in goods producing sector…mostly manufacturing and construction and that’s where you want job production."
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But he was quick to point out that “32% of jobs were created in the low-wage sectors. So you have this sort of middle ground making up the difference.”
The labor participation rate rose slightly to 62.9% in July. A higher percentage signals that more Americans are employed or actively looking for work.
Alpert says the participation rate is “at a level right now equivalent to where it was in the mid-70’s before women really entered the labor force in mass, which means people are not actually looking for jobs and that’s been attributed, i think, somewhat falsely, to the retirement of the baby boomer generation.”
In fact, the White House published a statistic that Baby Boomers accounted for approximately half of the drop in the labor participation rate since the financial crisis. The bulk of the other half? Millennials.
Alpert says “when you actually look at the statistics, the participation rate for those 55 and older is as high as it has ever been historically. The participation rate, unfortunately, for those in the 25 - 34 demo, that’s 4% lower than before the crisis."
Wages in July edged up by a penny and are up 2% year over year. But Alpert says mobility from lower to higher paying jobs remains difficult.
"You are looking at an environment in which people are not really able to move into the top wage paying categories the way they would in a typical recovery," he notes. "Wages in the high wage category are actually coming down a bit on a real basis - meaning they are falling relative to inflation - while wages in the very low, low category are increasing.”
On the issue of job creation, Alpert says it isn’t just a U.S-centric problem. The “world is awash in capacity…and that is keeping wages from growing," he adds.
Shibani Joshi is the creator of www.ShibaniOnTech.com and can be followed on Twitter @shibanijoshi.
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