The Baby Boomer generation, or people born between 1946 and 1964 have had an oversized impact on the world economy, most notable in developed nations. As of 2019, they accounted for 21.19% of the U.S. population. That same year, approximately 33% of them were still in the workforce. That number has been decreasing faster than anticipated due to COVID-19, with a recent survey revealing that 75% of them are planning to retire early.
This last fall, Goldman Sachs estimated that more than half of the people that left the workforce during Covid-19's rampage were over 55. A recent report found that baby boomer women are leading the way.
Are Worker Shortages Due to Retirements?
Worker shortages, from nursing to school bus drivers to the service industry are occurring in no small part to baby boomers leaving the workforce.
This was not always the case. Prior to the pandemic, many Americans were intending on working well past the traditional retirement age. As recently as 2013, 10% had told Gallup that they would "never" quit working. Granted, although some of this was driven by financial necessity, it was also due to American obsession with work as a way of finding meaning in life.
As an article in the Washington Post expressed, "By refusing to go gentle into the good retirement night, baby boomers were doing the economy a favor. Their continued presence in the workforce helped compensate for everything from reduced immigration to the falling birthrate."
The pandemic changed all this. Facing your own mortality will do that. As literally hundreds of thousands of their fellow baby boomers succumbed to Covid-19, this generation realized their chance to enjoy what time they had left was rapidly running out, and in fact could suddenly be taken away without notice.
Of course, corporate America brought some of this upon themselves. Especially in the white-collar world, the value of the baby boomers' many years of experience suddenly no longer mattered as much as it once did. In a cost-cutting environment, coupled with the pursuit of profits, middle-management positions, many of them held by baby boomers, were eliminated, or, as expressed by Forbes "juniorized, in which mid-to-senior-level workers are replaced with younger employees with considerably less experience."
However, the cost of juniorization on baby boomers was somewhat offset by this very same corporate trend of cost-cutting and profit at any cost strategy; specifically, the steady (for the most part) upward trend in the stock market.
This behavior of the stock market impacted baby boomers nearing retirement by giving them the extra financial cushion needed to drop out of the workforce. Especially in the last several years, household wealth, led in many cases by the housing market, has been on an almost continual upward climb, with the stock market reaching record highs.
As reported by Pew Research, "It is unclear whether the pandemic-induced increase in retirement among older adults will be temporary or longer lasting. Newly published labor force projections from the Bureau of Labor Statistics suggest it will be temporary. BLS projects large increases in labor force participation among older adults from 2020 to 2030, with nearly 40% of 65- to 69-year-olds being in the labor force by 2030, up from 33% in 2020."
Even if the increase in "early" retirement is short-lived, and more older Americans decide to remain in the workforce, it still doesn't relive the current shortages nor the inflationary pressures currently building.
Older Workers Need Not Apply
However, even at a time when many companies are desperate for workers, their own hiring practices seem to be designed to discourage older workers from applying. Again, as reported by Forbes, "It's common to read job descriptions obviously written to dissuade older workers through the usage of thinly veiled verbiage, such as “under 10 years of experience,” “requiring cutting-edge technology knowledge” and lower-level corporate titles".
Working Remotely Works Against Them
It's often said that if you're older and need help with your computer, you need to ask a teenager for help. With the trend toward remote work, which started prior to the pandemic, the need to be comfortable with technology and its associated software, apps, platforms and security needs also puts the older worker at a disadvantage.
Additionally, the increased application of remote work encourages companies to recruit workers from areas that have lower costs of living, which allows them to offer lesser compensation. This also works against the older worker who is looking to cash-in on their many years of experience.
Millennials Are Now Stepping Up to The Plate
Those born between 1981 and 1996 (ages 26 to 41 as of today) are now filling the management and supervisory roles previously held by their parents. The workplace they are entering and the conditions they are encountering are vastly different than those confronted by the baby boomers. One notable difference is the massive anchor- like debt that they are carrying. Although research shows that millennials are looking to inherit trillions of dollars from their baby boomer parents, with the stupefying increases in housing costs, coupled with what looks to be stubbornly persistent inflation, and the great retirement forcing their parents to need their money for themselves, this hoped-for financial bonanza may not be the panacea they are anticipating. Because of these factors, the conflict between businesses looking to slow the rise in payroll and the next generation's need for increased wages will be interesting. Where it leads is, for now, anyone's guess.