October 24, 2019

Teens in the labor force expected to fall to a 65-year low

As of September 2019, the U.S. economy had added jobs in 108 consecutive months. That’s the longest uninterrupted streak of job growth on record, and resulted in an addition of more than 21 million jobs. Despite the steady gains, the current expansion contained only one year (2015) in which the economy posted job growth above 2 percent.

As a result, the current decade is on pace to be the second-weakest since the 1930s, in percentage terms. If the trend continues, the 1.7 percent average annual employment growth would only outpace the 2000-to-2010 period – a decade that included two recessions.

One of the reasons that job growth has been somewhat tempered during the current economic expansion was relatively slow growth in the labor force. Between 2010 and 2018, the total U.S. civilian labor force increased at an average annual rate of 0.6 percent, according to data from the Bureau of Labor Statistics (BLS). If the current trend continues, the 2010-to-2020 period will be the slowest decade of labor force expansion on record.

Looking ahead, the expectation is that labor force growth will remain modest over the next decade. According to BLS projections, the U.S. civilian labor force will grow at an average annual rate of just 0.5 percent between 2018 and 2028. This dampened growth will be due largely to slower population growth and changing demographics.

Looking inside the numbers, labor force trends are expected to vary significantly by age group. The number of 65-to-74-year-olds in the labor force is projected to rise by 4.2 million during the next decade. In addition, there are expected to be 1.9 million more adults age 75 and older in the labor force. 

Of particular importance to the restaurant industry is the shrinking number of teenagers and young adults in the workforce. Nearly 40 percent of the restaurant workforce is made up of 16-to-24-year-olds, compared to just 12 percent of jobs in the overall economy. Looking ahead, this age cohort’s representation in the labor force is expected to decline by 1.2 million during the next decade, according to BLS projections.

In 1978, there were 9.7 million teenagers in the U.S. labor force – the highest number ever recorded. At that time, there were 3.1 million adults age 65 and older in the labor force. The dynamics shifted over the next three decades. Teen representation in the labor force declined, while more older adults remained in the workforce beyond the typical retirement age.

By 2008, the U.S. labor force included 6.9 million teenagers and 6.2 million adults age 65 and older. That was the last year teenagers outnumbered their older counterparts in the labor force. The divergent trends accelerated during the next decade, and by 2018 older adults outnumbered teenagers by more than 4 million.

BLS expects this trend to continue over the next decade. By 2028, there are projected to be 16.1 million adults age 65 and older in the labor force – a record high. In contrast, BLS expects there to be only 5.1 million teenagers in the labor force in 2028. That would be the fewest number of teenagers in the labor force since 1963.

Teenagers comprised 9.4 percent of the total U.S. labor force in 1978, while their counterparts in the 65-and-older age cohort made up 3.0 percent of the labor force. Fast forward a half-century, and the script is expected to flip.

According to BLS projections, adults age 65 and older are expected to represent 9.4 percent of the labor force in 2028. Meanwhile, teenagers are expected to only make up 3.0 percent of the labor force.

Adults age 65 and older currently make up less than 3 percent of the restaurant workforce. Look for this proportion to rise in the years ahead, as the composition of the U.S. labor force continues to evolve.

Read more analysis and commentary from the Association's chief economist Bruce Grindy.