In the 1960s, the wage gap at work did not exist. The Baby Boomers in the labor force outnumbered the demand for entry-level positions. As a result, their large numbers led to slow wage growth for younger workers.
Over time, the Baby Boomers gained more experience and became an older population, earning more than their younger counterparts.
A Breakdown of Factors Contributing to the Wage Gap at Work
Decades have passed, and the dynamics have changed, with the wage gap at work increasing to about 61% in the US. For the Baby Boomers, their struggle is different now. They have aged and enjoy delayed retirement, company stagnation, and high costs associated with changing jobs.
On the other hand, younger workers cannot fully maximize their potential as they strive to reach positions occupied by the older workforce but cannot do so.
Unfiltered Truths About the Wage Gap at Work
It should be understood that the wage gap at work is not a form of cruelty or inequality. Instead, it is based on the positions individuals occupy. Research from Nicola Bianchi, affiliated with Kellogg Insight, carefully studied the age wage gap and found that older workers have accumulated more promotions and occupied those positions for longer periods, leaving no spots for younger workers to reach those levels.
Bianchi believes that the wage gap at work exists not solely due to experience but also because the older generation has held onto their jobs for a long time. This may not necessarily result in growth but rather stability.
The solution to this issue is not to disregard older workers, as their experience is valuable for the upcoming generation. However, as Baby Boomers retire in significant numbers over time, it will become difficult for younger workers to fill their shoes, as they have been suppressed for a long time. Bianchi believes there is currently no real solution, but he encourages companies to invest in the younger workforce, eager for experience and success.