The prime working force population is shrinking and, as a result, businesses are turning to Americans 65 and older to come back and work, according to research done by the Employee Benefit Research Institute, or EBRI.
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The EBRI took a historical look at labor force participation and employment data going back to 1975 and “found the prime working age population (25 to 64 years old) has significantly fallen and is being filled by older workers,” the organization said in a statement. “At the same time, the labor force participation rate of those aged 65 or older has not reached its pre-pandemic level, while that of the prime working age population has.”
Authors of the report, titled “Trends in Labor Force Participation and Employment of Americans Ages 16 or Older,” said the research centered on the civilian noninstitutionalized American population, and included the labor force participation rates by age and gender. The data showed that the prime working age group steeply fell since the mid-1990s. “The decrease is being driven by the smaller number of people of these ages (meaning that younger and older Americans are needed to cover this decrease),” the report stated. “So far, the older population has been filling the gap in the labor force, as those younger than age 25 are at near record-low levels for their share of the labor force.”
For the retail industry, the implications include more pressure on an already challenged workforce.
Researchers at the EBRI said when analyzing the U.S. population ages 16 or older by age and gender, “females ages 65 or older made up the largest proportion by a sizable margin. However, males of the same ages tended to make up a comparatively larger share of the labor force than females, with the labor force gaps being smallest among the youngest and oldest age ranges.” The researchers said while the overall labor force participation rate was somewhat constant between 1975 and 2023, the “participation rates rose for females and fell for males, though both genders had lower participation rates in 2023 than in 2008.”
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Craig Copeland, director of wealth benefits research at the EBRI, said despite the difference in labor force participation rates between 1975 and 2023 being less than 2 percentage points, “significant changes in labor force patterns and composition have occurred over the past several decades.”
“The LFP rates decreased for men and increased for women over this timespan, though female LFP rates have trended down since the 1990s, resulting in a lower overall LFP in recent years,” Copeland said. “A large decline in the LFP rate was observed among those aged 16 to 19 at the beginning of the 2000s, while those aged 65 and over have had an increase in the LFP rate. The age of the labor force will play an important role in companies’ workforce development. At present, the aging of the Baby Boom generation has resulted in an increased share of older individuals in the labor force. However, members of this generation are almost all at least in their 60s, and the next generation, Gen X, is much smaller.”
Subsequently, a decrease in the share of workers aged 55 or older is imminent, Copeland said. “How quickly this outcome results will be determined by whether the Baby Boom generation has continual higher labor force participation rates at ages over 65 than what has occurred in the past.”
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