failure to launch: structural shift and the new lost generation · 2020-05-07 · failure to...

SEPTEMBER 2013

2 FAILURE TO LAUNCH: Structural Shift and the New Lost Generation

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FAILURE TO LAUNCHStructural Shift and the New Lost Generation

EXECUTIVE SUMMARY

September 2013

Anthony P. CarnevaleAndrew R. HansonArtem Gulish


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.


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.


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


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.


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.


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)


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.


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


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.



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


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.


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


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.


$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


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.


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


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.


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


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


OLDER ADULTS DELAY RETIREMENT

Figure 12. The relative wages of workers 65 and older were substantial-ly higher in 2012 than 1980.


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


Figure 13. Between 1986 and 2012, older women’s employment rate increased by 17 percentage points, com-pared to 4 percentage points for men.


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


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


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.


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


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


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.


1st In total (public and private) spending on postsecondary education

11th In postsecondary attainment among young adults (ages 25 to 34)


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.


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

3300 Whitehaven Street NW, Suite 5000Washington, DC 20007

Mail: Campus Box 571444,Washington, DC 20057

cew.georgetown.edu

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.

failure to launch: structural shift and the new lost generation · 2020-05-07 · failure to...

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