This matters because a mild labor market downturn, or a multi-year period without much net job growth, may not feel like much of a downturn at all if it’s happening during a time when the number of older workers is shrinking. As Bill McBride of Calculated Risk has pointed out, in 2020 the three largest age cohorts of Americans are going to be 25 through 29, 30 through 34, and 35 through 39. These are the consumption-intensive family formation years. Older workers retiring, with those jobs, promotions, and raises being taken by younger workers, could act as a stimulus and keep any downturn mild and short.
There are a variety of reasons the economy may have disappointed Americans since the year 2000, from bubbles to policy errors to debt overhangs. But to the extent that demographics and an aging workforce have contributed, the future is looking bright.
This article was provided by Bloomberg News.
Conor Sen is a Bloomberg Opinion columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider.