failure to launch: structural shift and the new lost ...failure to launch: structural shift and the...
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SEPTEMBER 2013
2 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
FTL_execSumCover.indd 3-4 9/13/13 4:23 PM
FAILURE TO LAUNCHStructural Shift and the New Lost Generation
EXECUTIVE SUMMARY
September 2013
Anthony P. CarnevaleAndrew R. HansonArtem Gulish
4 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
The lockstep march from school to work and
then on to retirement no longer applies for a
growing share of Americans.
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 5
New economic realities have created additional
phases in the life cycle of learning, work and
retirement. Moreover, the relationship between
these phases is no longer linear.
6 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
0%
20%
40%
60%
80%
100%
120%
18 19 20 21 22 23 24 25 26 27 28 29 30 Wages
rel
ative
to m
edia
n w
age
Age
1980 2012
Young adults are launching their careers later.
Figure 1. The age at which young adults reach the median wage increased from 26 to 30 between 1980 and 2012.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 1980, 2012, CPS UTILITIES, UNICON RESEARCH CORP.
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 7
60%
62%
64%
66%
68%
70%
72%
74%
76%
78%
80%
1950 1960 1970 1980 1990 2000 2010
Labor
forc
e part
icip
ation r
ate
,
20
- to
24
-yea
r-old
s
Figure 2. The labor force participation rate for young adults has declined since the 1990s, and is now at its lowest point since 1972.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF DATA FROM THE FEDERAL RESERVE BANK OF ST. LOUIS, 1947-2012
YOUNG ADULTS LAUNCHING LATER
8 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
54% 36%
16%
23%
10% 18%
8% 8% 6% 6%
1980 2010
Men
, ages
18
-29
STEM
Managerial/professional office
Food/personal service
Sales/office support
Blue-collar
Figure 3. Between 1980 and 2010, the share of young men in blue-collar occupa-tions declined from 54 percent to 36 percent, while the share in food/personal service oc-cupations increased from 10 percent to 18 percent.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF IPUMS DATA
As blue-collar jobs have disappeared, young men have had an especially difficult time gaining traction in the labor market.
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 9
Figure 4. In 1980, young men made 85 percent of the mean wage; in 2012, they earn only 58 percent of the mean wage.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 1980-2011, CPS UTILITIES, UNICON RESEARCH CORP.
YOUNG ADULTS LAUNCHING LATER
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
0.90
1980 1985 1990 1995 2000 2005 2010
Earn
ings
of
men
, ages
18
to 2
9,
rela
tive
to e
arn
ings
of
all
work
ers
(18
and o
ver)
10 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
The first decade of the 21st century was a lost decade for young adults, especially young men.
Figure 5. The em-ployment rate for young adults (ages 21 to 25) declined from 84 percent to 72 percent between 2000 and 2012.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2000-2012, CPS UTILITIES, UNICON RESEARCH CORP.
70%
72%
74%
76%
78%
80%
82%
84%
86%
88%
90%
2000 2002 2004 2006 2008 2010 2012
Emplo
ym
ent
rate
21-25 26-30
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 11
Figure 6. The share of men in their late 20s who work full-time declined from 80 percent to 65 percent between 2000 and 2012.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2000-2012, CPS UTILITIES, UNICON RESEARCH CORP.
YOUNG ADULTS LAUNCHING LATER
80%
65% 56%
50%
14%
20%
26%
24%
6% 15% 18%
26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2012 2000 2012
Men Women
Emplo
ym
ent
rate
, 2
6-
to 3
0-y
ear-
old
s
Not working
Part-time
Full-time, full-year
Men Women
12 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
Figure 7. High school graduates’ full-time em-ployment rate declined 13 percentage points be-tween 2000 and 2012, compared to 8 points for BA-holders.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2000-2012, CPS UTILITIES, UNICON RESEARCH CORP.
While young adults at all education levels suffered, BA and graduate degree-holders suffered the least from the shocks of the lost decade.
66% 53%
69% 55%
78% 70%
2000 2012 2000 2012 2000 2012
High school Some college/AA BA
Share
of
young a
dults
(26
-30
) em
plo
yed
full-
tim
e, f
ull
yea
r
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 13
Figure 8. Young work-ers’ earnings declined across education levels between 2000 and 2012, but by less for college-ed-ucated workers.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORK-FORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2000-2012, CPS UTILITIES, UNICON RESEARCH CORP.
While young adults at all education levels suffered, BA and graduate degree-holders suffered the least from the shocks of the lost decade.
YOUNG ADULTS LAUNCHING LATER
$27,500
$32,500
$45,800
$49,700
$24,200 $27,100
$41,700
$48,500
High school Some college/AA
BA Gradute
Annual e
arn
ings,
2
6-
to 3
0-y
ear-
old
s (2
012
$)
2000 2012
14 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
The lost decade exacerbated racial inequalities between young whites and young African Americans.
Figure 9. The white-African Ameri-can full-time employ-ment gap grew from 6 percentage points to 14 percentage points between 2000 and 2012.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2000-2012, CPS UTILITIES, UNICON RESEARCH CORP.
71% 62% 65%
48% 59%
52%
20%
21% 22%
27% 21%
22%
9% 17% 13%
25% 20% 26%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2012 2000 2012 2000 2012
White African American Hispanic
Emplo
ym
ent
rate
, 2
6-
to 3
0-y
ear-
old
s
Full-time, full-year Part-time Not working
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 15
Figure 10. Following the Great Recession of 2007, the peak unemployment rate for young African Americans was more than twice as high as the peak unemployment rate for whites.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2010, CPS UTILITIES, UNICON RESEARCH CORP.
YOUNG ADULTS LAUNCHING LATER
35% African Ameri-can-white wage gap in 2012 for adults 26 to 30, up from 23% in 2000
14%
20%
30%
0% 20% 40%
White
Hispanic
African American
Peak (2010) unemployment rate by race, 18- to 24-year-olds
16 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
Figure 11. Between 1983 and 2012, the employment rate of 55- to 64-year-olds increased from 52 percent to 61 percent.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF DATA FROM THE FEDERAL RESERVE BANK OF SAINT LOUIS, 1983-2012
In contrast to young adults, older adults are working into later ages and earning more.
50%
52%
54%
56%
58%
60%
62%
64%
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Emplo
ym
ent
rate
, 5
5-
to 6
4-y
ear-
old
s
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 17
OLDER ADULTS DELAY RETIREMENT
Figure 12. The relative wages of workers 65 and older were substantial-ly higher in 2012 than 1980.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 1980, 2012, CPS UTILITIES, UNICON RESEARCH CORP.
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
55 57 59 61 63 65 67 69 71 73 75 Wages
rel
ative
to m
edia
n w
age
Age
1980 2012
18 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
Figure 13. Between 1986 and 2012, older women’s employment rate increased by 17 percentage points, com-pared to 4 percentage points for men.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 1986-2012, CPS UTILITIES, UNICON RESEARCH CORP.
Older women and college-educated adults are working at higher rates and delaying retirement.
30%
35%
40%
45%
50%
55%
60%
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Emplo
ym
ent
rate
, 6
0-
to 6
4-y
ear-
old
s
Men Women
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 19
Figure 14. Among 65- to 74-year-olds, nearly half of graduate degree-holders are employed, compared to one-quarter of high school graduates.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 2012, CPS UTILITIES, UNICON RESEARCH CORP.
OLDER ADULTS DELAY RETIREMENT
25%
32% 38%
47%
High school Some college/AA BA Grad
Emplo
ym
ent
rate
, 6
5-
to 7
4-y
ear-
old
s
20 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
Figure 15. There are more job openings created by retirements per young person today than there were in the 1990s, when young people had high rates of employment.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF CURRENT POPULATION SURVEY, MARCH, 1994, 2012, CPS UTILITIES, UNICON RESEARCH CORP.
While older adults are working into later ages, they aren’t crowding younger workers out of the labor market. However, entitlements for seniors are putting increasing pressure on investments in education and training.
18
(8 million job openings)
28
(14 million job openings)
0
5
10
15
20
25
30
1994-2003 2012-2021
Num
ber
of
job o
pen
ings
crea
ted b
y
retire
men
ts p
er 1
00
young a
dults
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 21
OLDER WORKERS AREN’T CROWDING OUT THE YOUNG
Figure 16. Between 1970 and 2010, the share of public spending on Medicare and Social Security increased from 13 percent to 23 percent, while the share of public spending on education and training fell from 19 percent to 15 percent.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF DATA FROM THE BUREAU OF ECONOMIC ANALYSIS, 1970-2011
10%
12%
14%
16%
18%
20%
22%
24%
1970 1976 1982 1988 1994 2000 2006
Share
of
tota
l gove
rnm
ent
spen
din
g
(fed
eral,
state
, and lo
cal)
Education Medicare/Social Security
22 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 23
Encouraging older adults to retire early wouldn’t
help young adults looking for work, it would hurt
them. When older adults delay retirement, they
are healthier, consume less public benefits, pay
more taxes, and contribute to higher levels of eco-
nomic growth. The relationship between young
and old is positive sum, not zero or negative sum.
To adapt to the new phases in the lifecycle of
work and learning, the United States needs a new
generational social compact for both young and
older adults. The on-ramps and off-ramps into
and out of the labor market need to be smoother
and more efficient:
• Young adults will need to mix work and
learning at earlier stages to accelerate their
launch into full-time careers;
• Older adults need a less abrupt transition out
of careers and into retirement that features a
more flexible phase of work before full-fledged
retirement.
24 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
1st In total (public and private) spending on postsecondary education
11th In postsecondary attainment among young adults (ages 25 to 34)
FAILURE TO LAUNCH: Structural Shift and the New Lost Generation 25
At current productivity levels, the United States
cannot afford all the postsecondary education
it needs. Our ability to increase our postsec-
ondary attainment rate depends on reforms that
enhance the productivity of our education and
training system.
The first step toward higher productivity in the
postsecondary system is greater transparency in
the alignment between postsecondary programs
and labor market outcomes. Greater transparency
between postsecondary education and training
curricula and career pathways is a relatively
low-cost, self-regulating way to get more bang
for the educational buck.
26 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation
Figure 17. If U.S. postsecondary educa-tion were as efficient as South Korea, Canada, or Great Britain, the postsecondary attain-ment rate would in-crease from 43 percent to 60 percent.
SOURCE: GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE ANALYSIS OF DATA FROM OECD, EDUCATION AT A GLANCE, 2012 (DATA FROM 2010)
43%
60%
U.S. postsecondary attainment at current efficiency rate
U.S. postsecondary attainment at efficiency rate of South Korea,
Canada, or Great Britain
The lockstep march from school to work and then
onto retirement no longer applies for a growing
share of Americans. New economic realities have
created additional phases in the lifecycle of work
and learning.
FTL_execSumCover.indd 3-4 9/13/13 4:23 PM
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Failure to Launch: Structural Shift and the New Lost Generation is composed of a full report and an executive summary.
All can be accessed atcew.georgetown.edu/failuretolaunch.