Friday, February 20, 2009

The Graying (and Staying) of the American Workforce

I recently posted about managing Gen Y in a recession. A week later and the Dow down 6.2%, I’m starting to think that post may be obsolete. A more relevant post this week may be something closer to Surviving Your College-Educated Child Living at Home. It’s not that I don’t believe in in Gen Y’s ability to get entry-level positions; recent college graduates will always find jobs. However, with entry level-jobs disappearing from company budgets and experienced middle-management applying for junior positions, Gen Y will face a difficult job market as they compete for fewer jobs against more experienced candidates.

Unfortunately, I fear the delayed arrival of Gen Y in the American workplace will go far beyond the end of this economic morass. In a recent Tech Ticker post, Howard Davidowitz, of Davidowitz & Associates, highlighted a few effects of the economic downturn and deathly-ill economy, including:

  • An $8 trillion negative wealth effect from declining home values
  • A $10 trillion negative wealth effect from weakened capital markets
  • A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies"
These enormous financial losses, which no doubt affects the Baby Boomer generation and their retirement accounts, will cause significant shifts in workplace demographics for years to come. With so much net worth lost, Baby Boomers will need to push off retirement and continue working in the jobs Gen Y would have otherwise employed or moved into as the Baby Boomers exited the workplace. The increased graying (and staying) of the Baby Boomers in the American workforce will cause:
  1. An increase in college-educated Gen Y taking minimum wage jobs: Employers can capture untold amounts of human capital and drive during this economic downturn by leveraging Gen Y’s skills to improve operational performance in their roles. Any Gen Y worth their weight will recognize the opportunity for a resume-building experience and jump at opportunities for experience and application of their abilities.
  2. An increase in Gen Y moving back in with their parents: Sorry, apartments and property managers; you may have serious struggles soon. Parents; I hope you didn’t convert Sonny’s bed into an office or sewing room. Minimum wage jobs can’t pay the rent, utilities, cable, iPhone, and student loan payment.
  3. A decrease in employer ability to leverage staff to work longer hours: Entry-level positions are typically dominated by young professionals who are single with the energy, time, and freedom to work longer hours. With the commitments Baby Boomers face, including aging parents, financial commitments, and other responsibilities, we may see Baby Boomers in demanding positions struggle to balance commitments to their family, profession, and finances.


Jenna said...

Some of us are choosing to live at home for a reason. My goal is to avoid the whole renting thing and live at home for a year and put a down payment on a house!

Melinda said...
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