An already-confusing employment environment grew even more complicated this past week. Many readers responded to my “Crime in the Jobs Report” letter with their own stories. Some confirmed what I wrote, while others disputed it. Some of the stories I read from readers who are stuck far from where they want to be in this job market were very moving. I think everyone agrees the labor outlook is uncertain. I sense a lot of nervousness, even from those who have secure jobs that pay well. In today’s letter, I’m going to respond to some of the observations and data that came in this week on employment.
As we will see, we have a right to be nervous. Big changes in the employment world are happening, and we don’t yet know how they will affect us individually. Analysts like me can say we’ll muddle through, but we must remember that not everyone will muddle at the same pace.
We will also take a look today at a growing new phenomenon: the gig economy. (I should note that today’s letter is a little shorter. I am trying to reduce the word length of Thoughts from the Frontline.)
Employers Want Gray Hair
We talked last week about employers’ reluctance to hire older workers. Reader Steve Lange from Denver pointed me to a ZeroHedge article that questions this premise.
If you look at the BLS age breakdown for new jobs (Table A-9), you’ll see that workers aged 55 and over accounted for virtually all of October’s strong gains. That group added 378,000 jobs last month.
Meanwhile, the number of workers aged 25-54 actually declined by 35,000. That’s supposed to be “prime working age,” so any decline should ring alarm bells. And the numbers are more alarming if you are male: men aged 25-54 lost 119,000 jobs in October.
This pattern isn’t new, either. I’ve written about this ongoing anomaly in previous letters. Since December 2007, workers aged 55 and older have gained over 7.5 million jobs, while those under 55 have lost a cumulative 4.6 million jobs. Older workers are simply taking employment market share from younger workers.
What would cause this trend? Partly it’s demographic. The population is aging as the Baby Boomer bulge grows older and Millennials postpone parenthood. Nevertheless, it does look as though Baby Boomers are not exiting the labor force as fast as we thought.
Some Boomers may delay retirement simply because they enjoy working and are healthier than previous generations were in their late 60s. I’m in that category myself. More ominously, it seems that millions of Boomers are reaching retirement age without much in the way of retirement assets. They don't retire because they can’t afford to do so.
Tyler Durden, the pseudonymous ZeroHedge writer, connects this pattern to the unimpressive wage growth we’ve seen in this recovery: