BizFeed: Millennials Officially Rule the Workforce; CEO Pay is Out of Control
The News: Congrats millennials, we officially own the workforce. Millennials (ages 18-34) now make up the largest group of workers in the United States with 53.5 million people compared to Gen Xers (ages 35-50) at 52.7 million. The job-hopping, tech-focused bunch surpassed their elders earlier this year, according to the Pew Research Center. Boomers, bless their hearts, came in a distant third at 44.6 million. They peaked in size in 1997.
Here’s more from Pew:
A significant chunk of the Millennial population are 18- to 24-year-olds. These are the years when school and college-going are often center-stage, and as a result, labor force participation is suppressed. As the youngest Millennials get older, more of them will be looking for or getting jobs. Just how many more is tough to know, but the behavior of the Gen X population provides some clues.
Generation X’s labor force participation rate peaked in 2008 at 84%. In 1998, Gen Xers were roughly the same ages (18 to 33) as today’s Millennials, and that year, only 80% of the Gen X population was in the labor force. So we can assume that the Millennial labor force still has some room for growth in the years to come.
Why it Matters: It’s no secret that millennials have been ushering in new philosophies on the way we work. Rather than working 30 years for the same company and leaving with a gold watch, they’re entrepreneurial, tech-savvy and not afraid to change jobs for better opportunities. (Hey, if companies still offered pensions and serious job security, things would be very different.) Millennials see the value in working from home (or shall I say the foolishness in trudging to an office everyday). Expect these changes to continue as millennials take charge.
2. Aetna-Cigna Merger A Serious Possibility
The News: Rumors are heating up that two of the region’s largest health insurers — are exploring a merger. Aetna may make an offer for Cigna. But there’s a serious wrinkle — Aetna could also make an offer for Humana.
Investor’s Business Daily explains:
Following an investor meeting with Aetna, Leerink Partners analyst Anagha Gupte said a deal is likely and that “cheap debt” makes either an Aetna-Humana merger or an Aetna-Cigna pairing “meaningfully accretive possibilities and imminent,” according to reports.
Why it Matters: A deal between Aetna and Cigna would create a health insurance juggernaut serving the region. Plus, it’s another sign of consolidation in the health care sector. Insurance companies are doing all they can to compete as the government becomes a larger player in the industry. But the M&A activity is happening all over the sector. In fact, Jefferson and Abington Health just finalized a merger last week, and Aria Health announced on Tuesday that it was exploring merger options.
Wall Street is reacting positively. Since news broke of the possible merger deals, Cigna’s stock rose 2.7 percent, Humana’s climbed 4.1 percent and Aetna was up 0.6 percent.
3. Average CEO Makes More in One Day Than Average Worker Does All Year
The News: CEO pay has officially gone bonkers. In fact, S&P 500 CEOs got paid an average of $13.5 million in 2014. That comes out to $37,000 per day. Meanwhile, the average “technical and nonsupervisory worker” makes $36,000 per year, according to a new AFL-CIO report.
Why it Matters: They widening gap between the “haves” and the “have nots” is getting downright scary.
Consider this from Mashable regarding pay increases last year:
By comparison, the organization found that average CEOs were paid 331 times as much as average workers one year earlier. The average S&P CEO pay has increased by almost $2 million year-over-year, while the average worker pay has gone up by less than $1,000.
Meanwhile, Wall Street is taking notice. USA Today discusses:
The debate over wages is of utmost importance to investors in sectors where wages are significant costs, such as retail and restaurants. Upward pressure on worker wages could dent profitability going forward. Some retailers including Target (TGT) and Wal-Mart (WMT) have already moved to increase wages – and many more CEOs are talking about the possibility. Meanwhile, the Securities and Exchange Commission has proposed new rules that would require companies to disclose how much more CEOs earn that the average employee at the companies. Companies have resisted the proposal – and implementation has been stalled. That’s why the AFL-CIO’s calculation is of so much interest to investors – as they wait for companies themselves to disclose the data.