Thursday, January 17, 2008

Will Baby Boomers Be The Doom Of Us All?

Megan McCardle has an interesting piece on the coming wave of Baby Boomer retirees at [via Herr Professor] It's worth a read in it's entirety, but I've excerpted a few choice nuggets for you. First is the scope of the imminent deluge (all emphasis mine):

For the past two decades, the United States has been in a remarkable sweet spot as far as labor is concerned. The number of annual births was well below the mid-century peak, and the number of elderly was limited by the low birthrates from decades long gone—those of the Great Depression and World War II. As a result, the share of the nation’s population in its working years was exceptionally high. The workforce was swollen further—massively so—by the movement of women into paid work, and the accelerating influx of immigrants. But the percentage of women in the workforce seems to be leveling off, and future immigration rates, given the growing political backlash against immigrants, are anyone’s guess.

Now come the Boomers, 80 million strong, merrily planning their retirements. Watching their generation move from childhood through adulthood and into old age on demographic charts is like watching a pig move through a python. Thanks to the Boomers’ retirement, by 2020, even if immigration continues at roughly its current pace, the workforce looks likely to be only a little bigger than it is today. If immigration rates were to decline precipitously, all else being equal, the labor force would be roughly 1 million people smaller than it is now.

All these Boomers are certainly going to put some strain on our economy, and will force us to make some tough decisions. What is the outlook of the Boomers themselves, you ask?

These sunny views [Baby Boomer optimism-ed] are reflected and amplified by the AARP, whose Web site paints a rosy picture of early retirement. And by some media outlets, including the newly launched Retirement Living TV channel (motto: “Inspiring your freedom years”), which features programs such as Retired & Wired, Living Live! with Florence Henderson, and Another Chance for Romance, which is billed as “the first dating show focusing solely on Baby Boomers.” (You must give the Boomers credit: their uncanny ability to focus solely on themselves, approvingly, appears undiminished by age.)

Bwahahahaaa! Those crazy Boomers. Although really, it's somewhat heartening to see their pure unbridled optimism, as the bus careens towards the cliff. What is my take on the situation? Demographically speaking, what kind of footing am I going to find myself standing on in the coming years? 1945, the year before the Baby Boomers began entering the world, each retiree in America was supported by 42 workers. Now each retiree is supported by three. When the Boomers are fully retired, each of them will be supported by just two.

What happens when currently optimistic Boomers finally face the hard realities of their savings accounts? Will they ask for more from the government? At a bare minimum, seniors already struggling with their finances are not apt to look kindly on benefit cuts. Yet the cost of the benefits we’ve already promised them will weigh heavily on the workers expected to support a half-Boomer apiece.

Yikes! There goes my unbridled optimism, right out the window! All kidding aside, the thrust of Megan's article is that while a great change is already under way, and about to be even more severe, the great forces of American ingenuity and hard work will clear a path for all of us through the briar patch. Either that or it's the end of the world. You'll have to read the whole article for yourself to see. Read it now!

5 comments: said...

In answer to your question: Yes.

Didja know that the average retirement savings (outside of home equity) is about $40,000?

We'll be holding our jobs AND drawing social security, and killing medicare.

You're screwed dude. said...

BTW: my suggestion is get elected to an office - or elect people that think like you do. It's time for younger boomers to step up and throw the geezers out. They won't give it up, you have to take it.
You whippersnapper you.

Anonymous said...

Mebbe that's why no one in gubbmint wants to kick the illegals out--THEY'RE the ones propping up the SSA. Anyway, I think the next bunch of retirees needs to invest OUTSIDE of Social Security and the gubbmint needs to let them. A guy I know has a bunch of dough in his IRA and it's been earning about 8% for ten years. His SS account is puny and only earning about 2%. Seems like a no-brainer to ME! But then I am a baby boomer. Heh. I second the idea of youngsters getting elected, though. And I support throwing the geezers out! Except FRED! of couse!

Old Geezer

Thomas Paine said...

Well, to address goinglikesixty's comment regarding running for office, or electing people that think like I do, that's already in the works. Not running myself, but being more politically aware and involved and not voting essentially strictly by party line. No more voting for "the least of two evils" for me. If the Republicans nominate a RINO, then I'll just stay home and watch the fireworks. And Anon is dead on regarding what sounds an awful lot like private SS savings accounts. Something that has been tried, but will require some significant work to make a reality.

Anonymous said...

We just need to expand the work force exponentially and put the freeloaders to work. All these people do is lay around all day run in circles. They need to start earning their keep