(Bloomberg Business) — Teen unemployment remains sky-high. It was 17.9 percent in May.
But today’s teens have something very big on their side: There aren’t very many of them. So as they enter their prime working years, and boomers keep retiring, they will be in high demand. That’s according to Gad Levanon, the managing director for the economic outlook and labor markets at the Conference Board in New York.
Teens belong to Generation Z, the small cohort coming along behind the large Millennial generation. Gen Z is just beginning to reach working age. Pew Research uses 1997 as the end of the Millennial generation, while acknowledging that “no chronological end point has been set for this group.” If the oldest Gen Zers were born in 1998, they’re turning 17 this year.
Over the next couple of decades, the smallness of Generation Z will lead to tightness in the labor market, argues Levanon. He bases this on a metric called the 17-to-64 gap. It’s the idea that the labor force grows when the number of 17-year-olds (who are about to turn 18 and enter prime working age) exceeds the number of 64-year-olds (who are about to turn 65 and exit the prime working age cohort).
As recently as 2000 there were still 2 million more 17-year-olds than 64-year-olds. The gap shrank to around 700,000 in 2011 as the oldest boomers hit age 65 and it will shrink to almost nothing by the mid-2020s, Levanon says, citing Census Bureau projections.
“The contribution to population growth of this gap is about 0.4 [percentage point] now, and it will gradually shrink to almost zero in the next decade,” Levanon and his colleague Michael Paterra wrote in a blog post last month.