Millennials' Jobs Getting Outsourced to Their Grandparents

The Los Angeles Times ran a story entitled, “Freelance Workers a Growing Segment of California Economy,” lamenting that millennials working part-time costs California $17 billion a year in tax revenue. 

Aside from the Times bizarre comment that young people are somehow shirking their responsibility to pay more taxes by working odd jobs to survive, the real issue is that higher tax rates, labor rules, anti-business regulations, and Obamacare mandates have made hiring millennials for full time work much more expensive. Businesses are increasingly adapting to higher government cost burdens by hiring the over 65-year-old seniors who are exempt from Obamacare.

The Obama Administration likes to crow that all the American jobs have been recovered since he took office. That is sort of true, but the potentially employable population of the United States has grown by 10 million since then. That means that there are at least six million more Americans that want to work but are unable to find employment.

To understand why millennials are losing ground, dshort.com website publishes a demographic break-down of U.S. Labor Force Participation Rate percentages for over 25-year-olds since the demobilization in 1948 after WWII. Dshort excludes 16-24 to avoid the rising number of people who now attend college. They focus on the 25-64 age grouping as the traditional period of “productive work force” before retirement. 

What the data reveals is that the labor force participation rose steadily from 62% of Americans age 25-64 in 1948 to 80% in 2008. During that time same period, male employment fell from 95% to 86% and female employment age 25-64 rose dramatically from 32% to 72%.

The growth of women in the workforce was the major national trend from 1948 to 2008. As Dshort points out, “the financial advantage of two-income households was boosted by Title VII of the Civil Rights Act of 1964, which prohibits discrimination by race, color, religion, sex, or national origin. The Age Discrimination in Employment Act of 1967 helped to stabilize the decline in the 65-and-over participation rate.”

Another trend that developed during the 1948 to 2008 period was that the percentage of Americans over age 64 fell from 29% to 16%. Employment of male seniors fell from 49% to 21%, and employment of female seniors rose slightly from 9% to 13%. According to Dshort, “A vision of the good life in retirement, assisted by a burgeoning Social Security system, was a standard expectation for pre-Boomer generations. The advent of Medicare in 1965 and Social Security COLAs, cost-of-living adjustments, in 1975 added to their confidence in the Golden Years.”

But since the Obama Administration took office, labor force participation for Americans age 25-64 has steadily declined from 80% to 76% for the first time since 1948. Male employment continued its trend by falling from 86% to 83%, but after a half century of  consistent gains, the female employment percentage fell from 72% to 69%.

This trend of grandparents taking jobs from millennials looks like it will get even worse. In 2000, the civilian labor force was 2% over 64 and 10% from 55 to 64. But today those percentages have both risen to 5% over 64 and 16% from 55 to 64.  

As I wrote on July 30th, the average annual premium increase for Obamacare individual health coverage in California was 55% this year, according to the California Insurance Commissioner. My personal cost for my wife and myself went from $9,360 in 2013 to $17,760 in 2014.

Before the increases to pay for Obamacare mandates, the Kaiser Family Foundation review of the annual cost in California of providing healthcare coverage to a full-time single enrollee was $4,425 for the employer and $997 for the employee. The cost of providing the same level of coverage to a family of four jumps to $11,705 for the employer and $4,193 for the employee.

There are now 10,000 baby boomers turning 65 each day, and they look increasingly attractive to employers versus hiring millennials. The grandparents have a proven work ethic, have the skills to perform the job, and come with between a $2,000 and almost $12,000-a-year advantage to employers by being exempt from Obamacare mandates.

It seems rather perplexing that the Los Angeles Times could try to creatively rename unemployed millennials trying to survive by working a bunch of “off-the-books jobs for cash to survive as 'freelancing'”. But the simple facts are that businesses have adapted to the Obama Administration’s taxes, regulations, and the “Affordable Care Act.” Add the burden of Governor Brown’s tax increase to the highest level in the nation, and California millennials are rewarded, according to the Times, with “16.2% of Californians — or about 6.2 million — were either jobless, too discouraged to seek work, working less than they'd like, or in off-the-books jobs.”

The author will respond to comments by readers.


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