Earlier this month a monumental event took place in my life. I celebrated a birthday. Now it wasn't the birthday that most people might equate to as a major milestone, like turning 21 or 50. But it was a birthday which the economist in me found to be much more transformative. I officially became a "mature worker." Why should this matter to you? Because it means that starting now I will be less of a contributor to the overall economy.
You see, demographically speaking you can split populations into three general categories. First you have your "young workers", people aged roughly 20 to 45. This is the population group that is having kids, going to college, buying cars, buying the cool gadgets, buying homes, etc. The big ticket items.
And as Americans we do love to spend. This is where most of the growth in a consumer-led economy comes from. Additionally, this age group is normally at the beginning stages of their earnings, do not have a lot of savings, and in turn help spur financing economy. This age group represents our consumption boom. And the more of them we have consuming and spending the better it is for our overall economy.
Then comes my new age population group; the "mature worker." Those people roughly between the ages of 45 to 65 where kids have mostly moved out, the house is mostly paid for, and supposedly we are at the top of our earnings potential. But we are not consuming as much anymore. Retirement is now around the corner. We have to start investing wisely and saving our money. We grew up hearing that social security would not be around for us. Time to tighten those purse strings.
And finally there are the retirees. They made their nest eggs, put it into cash, and are in investments that typically do not generate a lot of income and in turn not a lot of economic growth. Primarily they are focused on developing predictable income streams.
When I first moved to Las Cruces a few years back I kept hearing people say "what is good for the Munson Center is good for Las Cruces." Don't take that the wrong way I am merely regurgitating what I heard. But the implication was that local policy primarily concentrated on our retirement population.
And why not? As of 2014 it was estimated that the baby boomers represented over a quarter of the U.S. population.
But here's an interesting fact. In Doña Ana County, by far the largest percentage of our population base are the "young workers," representing close to 34 percent of the entire population. Let's break this down even further. Roughly 19 percent of our population is between the ages of 20 and 29. Remember this is the group that represents our consumption economy. Spend, spend, spend. In fact, if you were to look at the county in terms of a population pyramid graph, we would appear to be positioned to be a strong expanding economy. We should be booming. Shouldn't we?
Here is our challenge however. Almost 30 percent of that 20-29 year age group, for one reason or another, is not in the workforce. Translation, 30 percent of our consumption boom economy is not spending. And of those who are in the workforce, the percentage who are fully employed vs. underemployed is hard to determine. Because we have a large service industry we can presume a large potion are underemployed. This equates to less spending. Less spending means less consumption. Less consumption means less taxes, which means, well you get the idea. And it's not as if there are not any jobs available. There are plenty. And more and more companies continue to expand their hiring needs every day. Some require experience and specific skill sets while others offer entry level positions. The latter, although entry wages, become the building blocks for skill set development and career development. Unfortunately we find many of these positions left untaken.
At a recent conference I attended, a workforce expert was speaking on the traits of the "millennial" generation. Those individuals roughly between the ages of 20-32. He stated that "millennials would rather stay home and live with mom and dad then to take a job they didn't want." I think back about all the jobs I didn't want or like. But I took them. Those bad jobs got me through college and through grad school. And now I can look back at them and pinpoint the lessons learned which helped me grow and develop.
Keeping my economist hat on, here is another fun fact. The replacement generation, those under the age of 20, represent about 30 percent of the total population of Doña Ana County. We definitely do not want 30 percent of them to be out of the workforce when they are into their twenties. Why is this relevant? Fast forward 15 years. Our "young worker" population will represent nearly 40 percent of the total county population. In terms of our population pyramid graph this is a huge opportunity for our region to expand and prosper.
Yet I do not hear a lot of policy being discussed on how to help this age group become more employable and more productive. If we really want to spur our local economy today, we need to understand who will impact it the greatest. The first order of business would be to do everything we can to get these "young workers" fully employed. And furthermore to make sure they are well educated. When choosing new locations, companies love to find a young workforce. Throw in a young and educated workforce and, well the economic opportunity is just too great to ignore. We often say young people are the future. I say productive, educated, and employed young people are the future, not only for purposes of expanding the economy but also to pay for the taxes on the services I will soon be needing.
The Jobs to Career Readiness Boot Camps, a joint partnership between MVEDA, DACC, Workforce Connections and the Hispanic Chamber, has definitely been a strong step in this endeavor. Enhancing the employability of today's young workers for today's opportunities is the goal. And getting young people reconnected to higher education through these Boot Camps is also a plus.
But from a policy perspective, it sure seems issues like minimum wage or fighting a neighborhood Walmart took up the headlines over the past year. At least we think it was a Walmart. Maybe it was a Trader Joe's? Let's just say if every "young worker" was productively employed full time then perhaps issues of minimum wage would have been a moot point. Perhaps we wouldn't worry about the names of incoming retailers because our market demographics would be attractive to the "Trader Joes" of the world. In other words, the free markets would do what they do best.
What types of policies or programs will get us there? Perhaps next time I will share a few ideas. For now, I need to check out the Munson Center. I hear they have a great fitness program!
Davin Lopez is the President and CEO of the Mesilla Valley Economic Development Alliance. This column was originally published in the Las Cruces Sun News.