The Federal Reserve’s interest rate hikes haven’t knocked the labor market to the pavement. But for Generation X, reality is starting to bite.
Workers born between 1964 and 1980 — those currently aged 44 to 59 — represent “effectively all of the increase” in America’s unemployed population over the last half year, according to research by Glassdoor’s Chief Economist Aaron Terrazas. As of May, those workers represented roughly a quarter of those unemployed, compared to less than 20 percent in late 2022. And it’s taking those workers much longer to find new jobs.
“I worry about Gen Xers who were laid off and have either voluntarily or involuntarily taken a long time to find new jobs,” Terrazas, a former Treasury official, said in an interview. “Maybe that’s because they have cushions where they can afford the luxury of finding a good match. Maybe it’s because they’re just not finding good matches.”
The Labor Department reported Friday morning that the U.S. job market added a net 209,000 jobs in June and the unemployment rate ticked down to 3.6 percent. Though that number is lower than in recent months — and strong employment growth figures were revised down by more than 100,000 for April and May — they still show businesses are adding jobs at a surprisingly rapid clip, given that unemployment remains near modern-era lows.
And yet, that hot labor market — a cornerstone of President Joe Biden’s economic pitch to voters — hasn’t been enough to combat the inflation-driven malaise in his economic approval rating.
Gen X’s growing share of the unemployment pool might explain some of those dismal marks. Older populations are more likely to show up at the polls and, as the Gen X workforce inches closer to retirement age, any deterioration of their personal finances stands to have a political impact, said Jim Manley, a Democratic strategist who served as an aide to the late Senate Majority Leader Harry Reid (D-Nev.).
“Having this layer of economic anxiety coursing through the Gen Xers isn’t going to help Democrats sell the economy next year,” Manley said. “Data like this just might explain why there’s a disconnect between how well the economy is doing and how people actually feel about it.”
Also hanging over Biden’s reelection prospects: the Fed’s more than year-long interest rate hike campaign. With the central bank all but set to raise borrowing costs again later this month, and an additional one or more increases potentially on the way later this year, stress on the labor market will only grow.
That isn’t to say there isn’t a positive story to tell. While the total number of job openings fell in May, there are still far more available positions than there are workers, according to a Bureau of Labor Statistics report released Thursday. And average wages rose 4.4 percent over the past year, on top of steady job growth.
Biden and other Democrats are banking on at least some of those trends holding through 2024 as they pitch voters on a strong labor market, declining inflation and a steady improvement in consumer confidence. That’s a compelling hand to play, said Jay Jacobs, the chair of the New York State Democratic Committee.
“Everybody takes their own pocketbook into consideration when they go to the polls,” Jacobs said. “Will there be blips? I’m sure. But I think in the aggregate, I would much rather be in our position than that of anyone pointing out the shortcomings of this economy, as we move forward.”
But for Gen Xers fearing potential job cuts, the shortcomings of the economy can have far-reaching effects, said Terrazas.
Prolonged unemployment can erode retirement savings and future earnings for older workers, he said.
“We know that in a recession, older workers — particularly those in their 50s — just never recover,” he said.
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By: Sam Sutton and Victoria Guida
Title: The MTV generation’s unemployment problem
Sourced From: www.politico.com/news/2023/07/07/the-mtv-generations-unemployment-problem-00105150
Published Date: Fri, 07 Jul 2023 08:45:05 EST
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