The Median Age in the U.S. Just Reached a Record High. Here's What That Means for the Workforce
Posted Jul 01, 2023
America is aging. Get ready for more multigenerational workplaces.
The median age in the U.S. reached 38.9 years in 2022, an all-time high and a notable rise from 35.3 in 2000, according to a new report from the U.S. Census Bureau. A third of states had median ages over 40, and no states experienced a decrease in median age.
Over the past 15 years, the U.S. birthrate decreased dramatically, and the recent slowdown of immigration brought fewer working-age adults to the U.S. Meanwhile, the number of working adults over 55 years old doubled in two decades, according to a 2020 report from the National Bureau of Economic Research.
This all puts strain on the already tight labor market--a sore spot for small businesses in particular. The financial analytics company Moody's estimates that 70 percent of the decline in the labor force participation rate can be attributed to these aging workers.
That said, the population is increasingly working later into life, with the average retirement age increasing from 57 in 1991 to 61 in 2022, according to a Gallup survey. Even more, some retired Americans have returned to the workforce in recent years, and one in six are considering it, according to a recent Paychex survey.
Because of these changes, many workers now find themselves in multigenerational workplaces, says Mauro Guillén, dean of the Cambridge Judge Business School and author of the upcoming book The Perennials: The Megatrends Creating a Postgenerational Society.
There are some risks to this, Guillén says, like the potential for "intergenerational conflict." Labor costs comprise another crucial concern, as "total compensation costs, including salaries, health insurance, paid time off, and pension contributions, rise with age," according to the NBER report.
But experts say there are also benefits to age-diverse teams. The NBER report highlights the "knowledge and experience" that these older workers bring to teams. Guillén adds that multigenerational workforces could also allow for "reverse mentoring," in which younger employees train older employees in skills they may be less familiar with, such as social media or artificial intelligence.
According to the NBER report, some companies are already finding ways to adjust with "financial education programs and programs that are designed to support a multigenerational workforce, like flexible work or health saving accounts (HSAs)."
The companies that embrace and manage these changes now will have an advantage moving forward, Guillén says, as this recent increase in multigenerational workplaces is "only the beginning." Kristie Wilder, a demographer in the Census Bureau's population division, predicts that the "median age will likely continue its slow but steady rise" in the coming years.
Here, smaller businesses can have the advantage, Guillén says, as they can often more readily adapt to new policies or mindsets. And with the rise of the U.S.'s median age, these businesses may need to adapt sooner than anticipated.