Though much ado has been made over the millennial generation sweeping into the labor market and supplanting both those in Generation X and baby boomers as the largest active age demographic in the domestic workforce, the average U.S. employee is still getting older, and what that means for the future of American employment is complicated.

The Pew Research Center earlier this year estimated the labor force held nearly 54 million millennials, or individuals who in 2015 were between the ages of 18 and 34 years old. That number for the first time eclipsed the pool of workers from Generation X, or those between 35 and 50 years old. Millennials were also expected to unseat baby boomers as the largest living generation in the general population at some point before year's end.

But while it would be easy to assume that millennials' meteoric rise would naturally drag down the median age of American workers, that's not exactly how the last several years have played out. It's also not a trend that's likely to crop up in the foreseeable future.

Back in 1994, the median age of U.S. employees was 37.7 years old, according to the Bureau of Labor Statistics. That metric climbed to 40.3 years old by 2004 and to 41.9 years by 2014. By 2024, the median age of U.S. workers is expected to be 42.4 years old.

So why is it that America's workforce isn't getting younger as millennials reach working age? Part of the reason is that a greater share of older Americans are bucking traditional retirement and staying in the labor force longer than has historically been the case. Between 2004 and 2014, the number of Americans at least 55 years old who were active in the civilian labor force ballooned by 47.1 percent, according to the BLS. And that number is expected to grow nearly 20 percent over the next 10 years.

"The labor force will continue to age, with the average annual growth rate of the 55-years-and-older group projected to be 1.8 percent, more than three times the rate of growth of the overall labor force," a BLS report released earlier this month said. "The group's share of the labor force is anticipated to increase from 21.7 percent in 2014 to nearly 25 percent in 2024."



Americans' actual age of retirement ticked up last year to 62 years old, which is the highest level Gallup has seen on record. Source: Gallup



Many analysts point to the Great Recession as a reason why people are reluctant to retire nowadays, as millions of Americans' nest eggs were either wiped out or notably diminished. Indeed, a Gallup poll last year found that the average U.S. retiree stepped away from the workforce at 62 years old, representing the highest retirement age Gallup has compiled since starting the survey back in 1991.

But it's also important to keep in mind that the U.S. workforce was aging long before the Great Recession. In fact, labor force participation among older workers grew slightly faster between 1994 and 2004 (by 48 percent) than between 2004 and 2014 (by 47.1 percent).

That shows the recession isn't entirely responsible for the aging labor market, with population trends and domestic fertility rates at least partially to blame as well.

"As a result of declining fertility rates and decreasing international migration, the population of the United States is growing more slowly than in previous decades and is getting older," the December BLS report said. "As the baby boomers have aged, so has the labor force, and as a result, the median age of the labor force has been increasing."

But with the baby boomers aging, the group will command an even smaller share of the labor market by 2024, when the oldest boomers will be pushing 80. And if a huge segment of the population is expected to phase out of the labor market while millennials continue to reach an age at which they can join it, shouldn't the country expect to have younger workers?

Not exactly. Many analysts expect members of Generation X to keep their jobs well beyond retirement age. Though soon-to-be retirees in 2008 and 2009 undoubtedly faced financial hurdles related to the economic downturn, a handful of studies suggest middle-aged Americans were actually hardest hit by the Great Recession. A Census Bureau report showed those between 35 and 54 years old saw their net worth plummet more significantly than those in other age demographics between 2005 and 2010.



Middle-aged Americans' net worth was hardest hit by the Great Recession, according to the Census Bureau. Source: Census Bureau

That means young retirement isn't expected to be common among younger boomers and the vast majority of Generation X. And with the country's cooling fertility rates, millennial families are expected to be significantly smaller than families in years past. According to Pew and Gallup, nearly half of Americans in 2013 said they believe two-child families were ideal in terms of size. Up until about 1970, families with more children were considered the standard.

So although millennials now account for the greatest share of working-age Americans, their ranks and the ranks of their children are not expected to largely reshape the domestic workforce in the same way boomers did several years ago.

And, ultimately, just because individuals are of working age doesn't mean they're actually working. The labor force participation rate of young Americans consistently underwhelms when compared with the rates of other age demographics, and that trend is only expected to get worse going forward.

Back in 1994, more than 66 percent of individuals between the ages of 16 and 24 participated in the labor market, either by working or actively looking for a job. By 2014, that share had fallen to 55 percent. And 10 years down the road, less than half (49.7 percent) of young workers are expected to be active in the workforce.

"The labor force participation rates of the 16-to-19- and 20-to-24-year-olds have decreased considerably over the past couple of decade," the BLS said in its report. "The major factor in the decreases, all significant, in the participation rate of this group has been an increase in school attendance at all levels, especially summer school, secondary school and college."

Young Americans are generally expected to stay in school longer than would be historically normal in part because of the changing landscape of the labor market. About 14 of the 15 occupations expected to decline the most rapidly over the next 10 years require only a high school diploma or less as a prerequisite, according to the BLS.

On the other hand, 12 of the 15 fastest-growing occupations require some form of college, graduate study or post-secondary education.

So with more young people staying in school instead of immediately entering the labor market, more currently middle-aged Americans staying in their jobs beyond traditional retirement age, and cooling fertility rates falling below historical norms, the labor market isn't expected to get younger anytime soon.

Whether that's problematic for the economy is hard to say. Some studies have found that older workers are more engaged in their jobs and bring more experience to the table. But they often come with heftier price tags, as experience typically demands a higher salary and workers up in age may require more investment to bring their skills up to date – if an employer even opts to make that investment.

"In comparison to younger workers, older workers are less likely to be unemployed, but are also less likely to receive training to improve their skills," a report published during the Great Recession by a Labor Department task force said. "The lack of training offered by managers may be due to misperceptions about the ability or interest of older individuals to learn new things, or managers may place a low value on investing training resources in older workers whom they assume will leave the workplace soon."

Ultimately, the BLS concludes that falling participation and an aging workforce will be a net negative for the U.S. economy, as the labor market is expected to age more like milk than wine. The country's overall participation rate is expected to drop to 60.9 percent in 2024, which would be the metric's lowest level since the early 1970s. That, in part, is expected to hold back America's overall gross domestic product.