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A commonly held opinion is that older workers who stay on the job past the usual retirement dates and baby boomers just hanging on to their jobs are somehow denying young people entry to the workforce. But researchers say that’s not true.
U.S. research economist April Yanyuan Wu says there’s no evidence to support the view that retaining older workers hurts younger ones by reducing the number of jobs, and she co-authored a paper on the subject last year.
Wu, with the Center for Retirement Research at Boston, challenges the co-called “lump labour” theory, which can be traced to Henry Mayhew’s 1851 London Labour and the London Poor collection of research material.
The Victorian-era social researcher and journalist argued that cutting the number of hours employees worked would reduce unemployment.
Taking inspiration from this long-held simple premise that there are a fixed number of jobs available, some policy makers in North America and Europe have used this theory to argue in favour of curbing immigration and validating early retirement programs.
But most economists tend to frown on what they call the labour lump fallacy.
Wu points to what was happening in the 1960s and ’70s when women entered the workforce in greater numbers. There weren’t fewer jobs for men. The economy simply expanded.
Canadian labour force researcher Rosemary Venne says career patterns have changed dramatically since the post-Second World War era and the birth of the baby boom generation.
Venne, who has written papers on demographic effects on the labour force and careers with Canadian economist and demographer David Foot, says young people of today are taking “longer to launch into adulthood,” but it’s not simply a numbers game of pitting one generation against another.
Always higher youth unemployment
“I don’t see it,” she says. “One of the reasons why youth are having trouble getting established — and they always have trouble; there’s always higher youth unemployment — is they’re not as job ready as young people were maybe 20 or 30 years ago, because career patterns have changed, organizational hierarchies have changed, they’ve flattened. There are not as many entry level positions.
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“So the fixed career ladder of the 1950s and ’60s has really given way to more varied career patterns where people don’t stay in a workplace.”
Organizations don’t hire the army of entry-level labour they use to and have fewer layers in the corporate hierarchy, says Venne, who teaches at the University of Saskatchewan’s Edwards School of Business. More companies are using technology, direct data entry and robotics.
Period of youth a ‘complex life stage’
“The stage of youth has become a more complex life stage. It used to be a stage that you were job-ready after high school. You jumped into a job and you left home pretty young,” Venne says, but home-leaving ages have really increased over the years.
Here are a couple of Canadian “launch” stats:
- In 2006, 60 per cent of young people from the ages of 20 to 24 were still living at home.
- In 1986, that figure was less than 50 per cent (49.3 per cent).
Clearly, 15- to 24-year-olds in Western society face different challenges than their parents at that age.
In 2010, Venne released her paper titled “Longer to launch: Demographic changes in life-course transitions.” In it, she writes that many stages of life are lengthening, including the period when young people are dependent on parents.
“They’ve got a lot choices in education, and jumping into that is going to delay the launch into a career,” she says. “It’s a reflection of new realities, changing career patterns, longer life expectancy. You just need flexibility.”
She says, in some ways, parents are providing that by supporting adult children still living at home, “and sometimes paying for their education.”
Their children are not only staying in the nest and starting jobs later, but also marrying and having a family of their own later, so it’s a given that they’re relying on their parents a little bit longer.