AARP Eye Center
By the time the COVID-19 pandemic began to wreak havoc on the labor market, Bureau of Labor Statistics (BLS) forecasters had already completed their estimates of labor force projections for the 2019 to 2029 decade. When the BLS finally released the forecast—in late summer, well into the pandemic—the agency was careful to note that the data and industry trends used to make the projections reflected a continuation of the labor market dynamics of previous years rather than those of the painful and chaotic present.
It was an important caveat because several of the past decade's most evident labor market trends had already reversed direction. Here are two key labor market trends the pandemic is complicating.
Older Workers Were the Fastest Growing Worker Demographic…Until Covid-19
One major trend that reversed course involved worker age demographics. Prior to the pandemic, the worker demographics that the BLS had forecast to grow the fastest were the oldest segments of the population—most notably, people ages 65 to 74 and 75 and older. In contrast, labor force participation rates for most other age groups were not on course to change much. Economists saw the increased rates of participation among older workers, especially older women, as a source of labor that could partially make up for this lack of growth in younger workers' participation.
In just the first few weeks of the pandemic, however, came an immediate and steep decline in older worker employment levels, especially among older women. In April 2020, the overall unemployment rate increased sharply, from 4.4 percent to 14.7 percent. Among the 55+, it increased from 3.4 percent to 12.1 percent for men ages 55+ and rose most sharply for women ages 55+, from 3.3 percent to 15.5 percent.
Today, jobseekers ages 55 and older are experiencing the highest levels of long-term unemployment with nearly half of the unemployed in that age group out of work for 27 weeks or longer. Recent analysis suggests that about 1.1 million older workers exited the workforce between August 2020 and January 2021 due to the pandemic; thus, while older workers' unemployment rates fell in January (and held steady in February), driving that decline was not their finding jobs but an exodus of unemployed workers leaving the labor force altogether.
The Largest Generation in the Workforce Enters Their 40s
Though older workers had been the fastest-growing worker demographic, the US workforce's largest generation is the millennial generation, born between 1981 and 1996. BLS data show millennials will continue to make up the largest share of the workforce in the next decade.
This year the first wave of this generation turns 40. In the next decade, most will shift into the 35-to-44 year-old age category of workers. In its 10-year projections through 2029, the BLS predicts that by 2029 more than 38.5 million people ages 35 to 44 will be in the labor force, an increase of nearly 4.5 million people over the decade—a larger increase than all other age groups in the labor force. The 45-to-54 year-old labor force age group is also projected to increase.
But the pandemic has taken a large toll among this demographic as well. Many millennial women, especially, have struggled to keep a foothold in the labor market, as caregiving responsibilities increased and industries employing mostly women shed thousands of jobs. Many of these displaced workers will find it challenging to return to the labor market and may also begin to deal with the added barrier of age discrimination. As more millennials turn 40, a growing proportion of the workforce's biggest generation will gain the protections of the Age Discrimination in Employment Act (ADEA).
In the coming months, labor market economists will look closely at employment and labor force participation rates among workers of all ages. They will try to determine if we will see a return to pre-pandemic employment trends or if we must now rethink our assumptions about who will be in the workforce in the years ahead.
For more jobs data: Find the latest employment data in the AARP Public Policy Institute's (PPI) Employment Data Digest, PPI's monthly review of job trends for those ages 55 and over. Visit the AARP website's work and jobs section for articles on work and unemployment and job search resources.