Demographers segment the world population into six living generations: GI (born 1901-1926), Mature/Silents (born 1927-1945), Baby Boomers (born 1946-1964), Generation X (born 1965-1980), Generation Y/Millennials (born 1981-2000) and Generation Z (born after the middle to late 1990s). Additionally, Australian demographer Mark McCrindle coined a seventh living generation: a post-Z “Generation Alpha,” representing those born after 2010 up through the coming years to 2025.
All the generations can expect to live longer lives. According to recent indicators from OECD, the average life expectancy in the U.S. is now 78.8 (up by about ten years since the late 1950s and early 1960s).
Longer life spans signify that we will extend our work lives as well as increasingly draw from the social security government trust and from other social and economic resources. How will this affect our nation’s labor force in the relative near term? By looking at population and labor force statistics together with data about generational changes, we can get a sense of how the future of work might shake out over the next several decades.
Minority Population Growth a Key Indicator
Generation Alpha, for instance, has already reached an important milestone that has numerous implications on future workforce development. In 2011—only their second year on the planet—they encompassed a first-time demographic of more newborns in families of minorities than whites. Minorities currently have, and will continue to have, higher fertility rates than whites. According to William H. Frey, author of Diversity Explosion, “the percentage of white women who are in their childbearing years is declining and is smaller than the percentage of such women in other, ‘younger’ minority groups. Both of these trends are likely to continue and should translate into smaller numbers of white births over time. The population of whites, in fact, is aging more rapidly than that of other racial groups.”
Frey calls Generation Alpha and its sibling Generation Z, “a huge demographic force. We are really going to absolutely be dependent on these young people for our future.”
He explains that by 2020, 40 percent of the population will be racial minorities, and more than half of the population under 18 will be racial minorities, adding that by 2023, whites will total less than half of the U.S. population under 30. Overall, this new minority demographic is estimated to comprise 56 percent of the total U.S. population by 2060, compared with 38 percent in 2014, as reported by NPR. What this all means from a workforce perspective is that as Baby Boomers filter out of jobs into retirement and gradually lose their social and business-oriented dominance, jobs will need to be filled within the hierarchy of business and industry by younger, exceedingly multi-racial, and often, at least by today’s standards, statistically low-income and less-educated minorities.
Another Generational Divide on the Near Horizon
In a recent Op-Ed piece in the Los Angeles Times, Frey called this demographic trend the beginning of a future generational divide between Gen Alpha/Gen Z and Baby Boomers. “I tried to show how ironic it is that today’s Baby Boomers are the same people who used to say ‘don’t trust anyone over 30.’ Now the shoe is on the other foot.”
As he elucidates in Diversity Explosion, the divide will present gaps relative to economic and political interests—in other words, issues related to whether or not government funds should support youth or seniors could become prominent, such as decisions about increased funding for K-20 education and workforce training as opposed to senior health care. “The cultural generation gap between the young and the old can exacerbate the competition for resources because the rise in the number of senior dependents is occurring more rapidly among whites than among minorities, for whom dependent children is a larger issue,” Frey writes. “These contests may evolve into culture clashes.”
Gen Z (who are everyone currently under the age of 21) as well as Millennials (who are also more diverse than their predecessors) also need to be considered when referring to a looming generation divide and tomorrow’s dramatically changing workforce. Forty-five percent of Gen Z, for instance, believe that working with boomers will be challenging, “compared to 17% who anticipate difficulties with Gen X and 5% with Millennials,” writes Dan Schawbel, partner and research director at Future Workplace, in his blog.
According to a 2011 poll by Pew Research, both Boomers, and especially Silents, do not fully embrace diversity. “Fewer in these groups see the increasing populations of Latinos and Asians, as well as more racial intermarriage, as changes for the better.”
Must-Have Tax Contributions
Despite such differences, Frey says he is hopeful. He explains that “the solvency of government-supported retirement and medical care programs is directly dependent on the future productivity and payroll tax contributions of a workforce in which minorities, especially Hispanics, will dominate future growth.” Out of necessity, the older generations will fully support education and workforce training needs of their much younger minority generations.
He adds that the places where workers will be needed most are not urban areas, but instead rural areas and smaller cities, where so-called brain-drains of young people are common. “Those are the places that need to be aware of younger people of different backgrounds, speaking different languages. We need to make sure they can be useful in our companies.”
There may be a little backlash at first because of the vast cultural differences between mostly white Boomers and those born after them, “but over the long term people will adjust to this,” Frey concludes. “They are going to understand that we have job openings and we need to fill them with skilled people. Savvy business owners and corporate leaders will understand that these are the demographics of the future and we need to make the best of it.”