Researchers have explained the reason why young adults have struggled to adjust to new economic realities. The Georgetown Center on Education and the Workforce released a study that explores the gap between young people moving into the workforce earlier and older people leaving for retirement.
This new path is what researchers call “failure to launch.”
For the longest, young people were told that a good education led to years of employment which led to a happy retirement. In today’s economy, that is no longer the case. The move from school student to full-fledged employee is not as linear as it was in the past. Now, there are periods of retraining, shifting to new career fields, and learning and earning.
To adapt to these changes and create smoother transitions into and out of the workforce, researchers say that two things must happen:
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.
The study says the recent Great Recession has completely flipped the script on career attainment for younger people, creating a “Lost Decade.” By and large, young people are transitioning into the workforce and earning money at a much later age than young adults 30 years ago. The age at which young adults are hitting median wage earnings has increased from 26 to 30 between 1980 and 2012.
Men are having an especially difficult time finding adequate work than their female counterparts. Blue-collar jobs that were readily available to men years ago have declined in recent years by nearly 20 percent.
Instead men have moved into other occupations like sales/office support (23 percent) and food/personal service occupations (18 percent). This has resulted in a decline in the share of full-time job attainment by men from 80 percent down to 65 percent between 2000 and 2012.
Over the past three decades, people over 65 have experienced greater health and increased life expectancy. Yet, they have had to keep working, among many reasons, as a result of Social Security reform raising the retirement age and the share of employers offering health insurance as a retirement benefit has declined.
“In other words, the model of the labor market that presumed entry at age 18 and exit at age 65 is obsolete, and instead, young people often start their careers later, after developing more human capital from post-secondary education and training, and work experience from internships, work-study, mentorships, fellowships, job shadowing, and part-time work,” the study says.
Higher levels of education are still the number one answer. Between 2000 and 2012, those who had earned a BA degree experienced a slight dip in employment. On the other hand, those who only graduated from high school, had some college experience or only got an Associate’s degree, saw a significant decrease in employment by more than 10 percentage points.
Researchers believe there must be transparency between post-secondary programs and career pathways. The data about education and jobs exists, researchers say; it just needs to move “from the nation’s statistical warehouses to the kitchen tables where college and career choices are made.”
They applaud the efforts of U.S. Senators Ron Wyden (D-Ore.) and Marco Rubio (R-Fla.), who have introduced the bipartisan "Student Right to Know Before You Go Act," which would help develop state databases that lay out information on employment and earnings associated with a particular post-secondary program.
Researchers would like to see information on post-secondary costs, completion, and gainful employment be made available to the public so younger people can make better choices when pursuing higher education.
For older people, Georgetown researchers say they must remain healthy and active and stay on their jobs as long as possible. Contributing financially to the overall economy, especially in helping fund Medicare and Social Security, improves those entitlement programs and reduces the burden on younger people to have to foot the bill.