Is Our Aging U.S. Workforce a Drag Upon Our Economy?
Can this be true, or is this just theory put forth by the intellectual elite?
To some the obvious answer to these questions is a double edged sword or two different sides of the same coin. The size and number of the baby boomer cohort which will increase consumption of Social Security and Medicare benefits payout will, of course, has some impact on our economy. How that plays out is dependent on any fix Congress may make to the qualifications to receive these benefits for future generations. It will also depend on longevity after retirement and whether those collecting benefits will continue to work part-time or in the gig economy to supplement those benefits.
Another factor to consider is the consistent measures over the decades of the lack of engagement in work across all working generations (boomers, GenX and Millennials). However, when you compare the work ethic and willingness to go the extra mile, baby boomers win -- hands down. Automation of jobs and tasks boomers may perform will also play a role in the speed at which they leave (or are forced out) full-time employment.
Even with purported accurate actuarial data analysts have difficulty doing the math to project how it will play out. The real question, it seems to me, is how productivity continues to rise at an accelerated pace, unemployment payouts continue to decline and we have the highest available to work population with some 5 million job openings available. There is also evidence that the on-demand workforce in all age group is increasing both by lifestyle choice and the need for extra income. Recent studies indicate not only baby boomers but GenXers and Millennials are engaged in on-demand staffing and online gig platforms.
The other side of this argument is the inability of government to help kickstart the economic engine in the fashion that had been successful in the past after a recession. True the hit we all took in 2008 as a result of inappropriate mortgage lending practices and the resulting financial system meltdown was huge -- but efforts have failed to crank up the viable economic engine we have all experienced in the past. Further, a far left liberal public policy agenda may take credit for some of the jobs recovery, but it also must take responsibility for many jobs killing regulations. Some of those burdensome regulations have wiped out whole industries.
So what does the record show GDP growth to have been during the eight years of the Obama Administration?
Year GDP RealGDP NominalGDP GDP Inflation
Growth Rate $Trillions $Trillions per capita
Not so hot, failing to break 3% in any year and avg. about 1% despite claims of creating or restoring millions of jobs.
Now let's look further back to see how other administrations performed. It tells a different story.
Source: The Balance: U.S. Economy
Some say our economic engine is not broken, just running slower. But that lack of GDP improvement isn't because baby boomers having any role of less productivity. Maybe advances in technology and public policy are having a bigger drag than aging boomers?
A recent RAND study, which is often referenced for this subject, showed "that states with older populations were less productive per worker". The report also stated the data examined did not provide much insight into why that happens.
Other studies with similar data just do not cover enough information to draw a correlation or definitive conclusions about any impact of an aging workforce on GDP. What is a certainty is that the infusion of a burst of technology solutions as never before are creating a tectonic shifts in the way "work" is accomplished. Currently 35% of all work processes are either automated, outsourced, or moved to on-demand status in some form.
With self driving vehicles (auto,taxi,trucking) soon to be accepted on our roads and highways, millions of jobs will be at stake because the vehicles will cost less per mile and will be safer than if driven by humans lowering insurance costs. This action will have a much bigger impact on GDP (less consumer spending) than retiring baby boomers.
Then there is the "Trump Effect". Can the new President deliver on his promise to reach his goal of 3% to 4% annual GDP growth. Based on just the first days of his presidency, it looks like his business experience, rolling back jobs killing regulations and an ability to "drain the swamp" of the "deep state" non-elected cronyism may succeed. If true, many boomers are willing to do their share to get our economic engine humming again because they have a stake in doing so. No one really wants to leave our grandchildren a mountain of national debt and education loans in a market of shrinking jobs.