Future Workforce to Rely on Millennials

Millennials – people born between 1980 and the late-1990s – are the largest generation in the U.S. population and critical to economic success of the nation and Idaho. Today, there are almost 73 million millennials in the U.S. and over 365,000 in Idaho, where they are growing faster than the rest of the nation. This particular demographic also represents the workforce of the future.

Employers often characterize millennials as lacking soft skills, entitled, unmotivated and having a tendency to “job-hop.” While there is undoubtedly a need for this cohort to meet an employer’s expectation for soft skills, it is also worth taking a deeper look at the root cause of these stereotypes and identify any underlying circumstances that might influence the ability of millennials to succeed in today’s job market.

Idaho millennials are more likely to have a job, but on average, earn about $3,000 less than their national counterparts and are more likely to live in poverty. While education rates have increased in Idaho and nationally since 1980, Idaho millennials are also significantly less likely to hold a bachelor’s degree or higher, which could explain the below-average wages they earn compared to their counterparts.

Nationally millennials are living at home with a parent and the rate of those living alone has remained stable and low. Compared to the US, Idaho millennials are less likely to live alone or with a parent and much more likely to be married. They are also slightly more likely to be veterans and significantly less likely to be minorities.

According to a report from the President’s Council of Economic Advisors, “With the first cohort of millennials only in their early thirties, most members of this generation are at the beginning of their careers and so will be an important engine of the economy in the decades to come.” The report continues to assert the future success of millennials is essential to the economic success of the nation and Idaho – because 1) millennials represent the future workforce on which productivity depends and 2) any income they earn represents a significant source of local expenditures on essentials such as housing, food, utilities, entertainment and discretionary spending.

Understanding this segment of the population can help predict the direction of future economic activity, making it worth the time to examine how the young adult age cohort have changed over time and how Idaho’s millennials stack up against the rest of the nation.

Using data from the 1980, 1990 and 2000 censuses and the five-year average American Community Survey for 2009-2013 we compared the population aged 18-34 for Idaho and the nation across four points in time. Let’s look at the details:
Student Loan Debt Nationwide, real costs of attending college are higher than ever and real wages are stagnating. Total student loan debt is growing much faster than wages. This graph shows total student loan debt, the cost of college and child care and wages of production workers and nonsupervisory employees by quarter — all adjusted for inflation. The graph is not specific to millennials, but it is clear that almost all of the new student loan debt is taken on by those in the 18-34 year old age group. Both the cost of college and total student debt are growing faster than wages. In fact, while real earnings grew by 5 percent from 2006 to 2014, real tuition, school fees and child care costs increased by 22 percent and the amount of real outstanding student loans increased a staggering 116 percent. This graphic illustrates the challenges that face those who hold debt after getting a college education and might explain their reticence to buy a house, a car or spend any money at all on discretionary goods and services. This inability limits the economic impact that those with student debt can actually have on an economy and hampers economic growth.

Share of the Population The share of the 18-to-34 population has generally declined over time both in Idaho and nationally from 30 percent to 23 percent in both. Idaho’s share is 0.3 percent less than the national average. The number of 18-to-34 year olds fell from 1980 to 2013 as baby boomers aged, but the number of people 18 to 34 grew 31 percent in Idaho and 8 percent across the nation. Idaho’s 365,700 millennials account for just 0.5 percent of the nation’s 72.8 million millennials, but represent a higher percentage than two decades ago. Median Earnings Real median earnings for full-time Idaho workers 18 to 34 mirror the state’s income and earnings which are consistently lower than the national average. Real median earnings for Idaho millennials is 30,199 compared to the national average of $33,883. Since 1980, real earnings in the age group have fallen about $5,000 in Idaho and $2,000 nationally. The steepest decline occurred between 1980 and 1990, likely due to a decline in high-paying natural-resource extraction jobs throughout that decade. Poverty The poverty rate for 18-to-34-year-olds has crept upward steadily since 1980. Idaho’s rate has grown faster than the nation — both hovered below 15 percent in 1980. Now, the poverty rate for Idaho millennials has eclipsed 22 percent while the overall poverty rate is 15.5 percent. The rate for 18-to-34-year-olds nationally is 19.7 percent compared with 15.3 percent for the total population. Employment The percentage of employed people between ages 18 and 34 is lower than in any decade since 1980. The post-recession five-year average shows employment for young Idaho adults at 66.5 percent, a point and a half above the nation’s 65 percent. Since 1990, the rate has been above the national rate. Education The percentage of 18-to-34-year-olds with bachelor’s degrees has increased steadily across the nation while it dipped in the 1980s in Idaho and has been rising since 1990. Now, the percentage of 18-to-34-year-olds with a bachelor’s degree in Idaho is 16.4 percent, lagging the nation by about seven percentage points, while the percentage of Idahoans over age 18 with a bachelor’s degree is 25.1 percent compared with almost 29 percent nationally. Veterans In 1980, over 10 percent of 18-to-34-year-olds were veterans in Idaho compared to 9.4 percent across the nation. That percentage has declined with the end of the military draft. Idaho has always had a higher percentage of veterans in this age group, but the gap between the state and the nation is smaller than in the past at just a third of a percentage point. Living with a Parent Idaho has remained consistently below the national rate of 18-to-34-year-olds living at home with a parent, but that percentage has increased substantially since 1980. While only 14 percent of this Idaho age group lived with parents in 1980, more than 22 percent do now. Similarly, the national rate has jumped from 23 percent to 30 percent. Marital Status The rate of single, never-married millennials is at an all-time high in both Idaho and the nation. Almost 52 percent of Idaho’s 18-to-34-year-olds have never married compared to nearly 66 percent nationwide. The gap between Idaho and the nation is larger than ever at about 14 percentage points. Living Alone Idaho’s share of 18-to-34-year-olds living alone has declined since 1980 from about 7 percent to 5.8 percent while the national rate has been relatively steady at around 7 percent. Minority An increasing number of Idaho millenials are other than white and non-Hispanic. Minorities have jumped from 7 percent in 1980 to over 20 percent in Idaho, but still remain below the national rates, which rose from 21.6 percent in 1980 to almost 43 percent today.