Mind the Gap: Late Boomer America

Over on Atlantic.com, economics blogress Megan McArdle has an interesting analysis of some economic factors related to the Great Boomer Retirement.

The Baby Boomers’ retirement will change the texture of society in ways we’ve scarcely begun to contemplate. A dispatch from America’s coming silver age

No Country for Young Men
by Megan McArdle

Start with the stuff America makes, and the people who make it. Young people buy goods, like cars, houses, and iPods. Old people need services, like transportation, meal preparation, and health care. We have made great strides in enabling the elderly to get around—the scooters you see advertised on daytime television, for example. My grandmother, who is blind and physically frail, was able to live at home much longer than she otherwise could have because she had Meals on Wheels, a home health aide, and a Life Alert-type necklace to call for help in case she fell.

But these services require a lot of labor. According to an analysis by McKinsey Global Institute, the number of hours required to produce an automobile in North America fell by 1.7 percent annually from 1987 to 2002, to an average of about 100 hours. Meanwhile, it still takes about the same amount of time as it always did to drive a senior to a doctor’s appointment, or to help an older patient bathe and dress. Productivity growth is faster in the things that kids consume than in the things that the elderly need.

As the Boomers age, they will consume fewer of the things that we produce efficiently, and more of the things that we provide relatively inefficiently. Productivity is notoriously difficult to pro­ject, but many forces will be pushing it downward as the Baby Boomers age.

This does not look good.

What Do I Do? Depends on What Week It Is

Sean Aiken has an interesting take on his quest to find new work. After getting a business degree, he still didn’t know what he wanted to do, so he took a typical GenY approach, and made a media event of his career search.

What Do I Do? Depends on What Week It Is

When Sean Aiken was a boy, he thought he might like to be a professional basketball player once he grew up. Now he is 25, and he is decidedly less certain.

if (acm.rc) acm.rc.write();

In that way he is like so many of his millennial generation — new workers wavering on the threshold of real life, determined to get it right, they say, and fearful that they might get it wrong.

“My father looked at me,” Mr. Aiken recalled, “and said, ‘I’ve been around 60 years and I’ve yet to find something I’m passionate about except your mother.’” Sobered by that thought, Mr. Aiken hatched his plan to work at 52 jobs in a year and to chronicle the search on a Web site, oneweekjob.com. He would take no salary for the work, but would encourage his “employers” to make a donation to charity. He spread the word through a mass e-mail message to friends and family and eventually through word of Web.

This is an interesting take, but not one that all of us could try. (For one – how many of us could afford to take a whole year off to find ourselves or our future?) I also wonder what this says about the status of the career center at Mr. Aiken’s alma mater. Still, Aiken is finding out some things about work in the real world.

Someone should give him a shot at being a recruiter for a week.

Mind the Gap: McKinsey on Boomers Need to Work

The McKinsey Global Institute site has an interesting article about “Serving Aging Baby Boomers”. MGI suggests that the upcoming boomer retirement binge may not be so huge:

While the conventional wisdom about boomers suggests they are widely affluent, only 25 percent are financially prepared for retirement and are aging with confidence. More than half of this generation, a massive cohort comprising 24 million people, envision a comfortable retirement, feel entitled to the good life, but lack the financial resources to pay for it. These boomers share the same aspirations as the affluent but won’t be able to maintain their current lifestyle without continuing to work or cutting spending by 25 percent or more.

This suggests that companies that find creative ways to lure boomers and accommodate their post-retirement working needs will do well in the upcoming labor shortage.

Boomers: “Born to be wild” or “Bored, tubby & mild”? (Amusing animation by Walt Handelsman)

The Start of the Great Boomer Workforce Exodus?

Last week, the first Boomer applied for Social Security. Aren’t these folks the ones who first branded themselves with the mantra, “Never Trust Anyone Over Thirty”? That great sucking sound you hear is billions of dollars leaving the Social Security Trust Fund.

America’s first “baby boomer” filed for Social Security benefits Monday, becoming among the first of nearly 80 million Americans born after World War II who are expected to apply for such benefits over the next two decades.

Kathleen Casey-Kirschling, 61, was born one second after midnight on Jan. 1, 1946. She becomes eligible for Social Security in two and a half months. On Monday, she completed filing electronically for the benefits before a horde of reporters and photographers at the National Press Club in Washington, D.C.

[snip]

In what’s being called America’s “silver tsunami,” 10,000 Americans a day will become eligible for Social Security benefits over the next 20 years.

This could be the start of the Great Boomer Workforce exodus. These same 10,000 Americans will be changing their work habits. We don’t yet know if these Boomers will have enough on hand to start retiring at 62.5 years, but some will.

This could lead to more part-time and intermittent workers as these Boomers start taking time off to smell the roses. On the other hand, some analysts suggest that the Boomers lack of strong money management skills will mean that many will be forced push off retirement until they’re in their 70’s. The upcoming labor shortage will also mean that some companies will provide incentives to keep their Boomers on the payroll.

Or, this could be the start of what The Onion named the “The Long-Awaited Baby Boomer Die-Off“.

Articles of note:

• CBO: The Retirement Prospects of the Baby Boomers
• About.com: How Baby Boomers Will Change Retirement
• CNNMoney.com: Corporations woo baby boomers

Mind the Gap: Appel on the coming labor shortage

In Chief Executive magazine, Andrew Appel notes three bullets to Filling the Talent Gap. Appel is CEO of Aon Consulting Worldwide, and he points out the impacts of the coming demographic train wreck:

In both developed and developing countries, the evolving workforce is creating a talent shortage. In developed nations, retiring baby boomers will drain the talent pool. Meanwhile, developing countries are growing rapidly but lack experienced managers. What’s more, 60 percent of new jobs in the 21st century will require skills currently possessed by only 22 percent of U.S. workers, according to the Commerce Department. Clearly, it’s time for talent to be viewed as a significant issue in boardrooms worldwide.

This could mean the end of the churn-and-burn job shops.

Hat tip to Execupundit.