In Brief

Gen-Xers could challenge pension systems

Baby Boomers make up a sizable portion of the U.S. population and the public-sector workforce, including municipal jobs such as road maintenance. The last of the generational cohort will soon turn 55.

By Allen Jones, TEXPERS Communications Manager

As the last members of the baby-boom generation turn 55 next year and draw closer to retirement, Millennials, the nation's youngest workers, continue to grow into the largest generation in the U.S. labor force. However, with few workers between the age groups, trustees and administrators of public pension systems could find themselves preparing to clear a retirement benefit hurdle.

The Millennial workforce isn't expected to reach the peak size of the Baby Boom labor force (66 million in 1997), according to U.S. Bureau of Labor Statistics and U.S. Census Bureau data. But it will still outnumber the expected peak size of their preceding generational labor cohorts, the Gen-Xers. 

As for the oldest members of the U.S. labor force, the Baby Boom generation has leveled off around 40 percent since 2008. The trend follows years of increases from 29.3 percent in 1992, according to a new issue brief published by the nonprofit Employee Benefit Research Institute. 

“The baby-boom generation has created a wave of sorts moving through the labor force over the past several decades,” states Craig Copland, a senior researcher at the institute, in the report.

In “Labor Force Participation Rates by Age and Gender and the Age and Gender Composition of the U.S. Civilian Labor Force and Adult Population,” Copland outlines implications for the future:

• Due to the massive number of baby boomers, the segment of the labor force aged 55 and older will continue to increase but will begin to shrink as its youngest workers age into retirement.
• The number of workers between the ages of 25 and 34 has been increasing slowly and will continue to increase as the baby-boom generation retires.
• Having larger numbers of older and younger workers means there will be fewer numbers of workers at ages in between, which presents different (and possibly incompatible) compensation and benefit challenges.

Also, Copland says “the thought that individuals will stay in the labor force at higher and higher rates into older age in order to have more assets and/or higher Social Security benefits does not seem to be materializing for the oldest Baby Boomers.”

Allen Jones

About the Author:
Allen Jones is the communications manager for the Texas Association of Public Employee Retirement Systems. Email him at allen@texpers.org or call 713-622-8018.