EMPLOYMENT GOING FORWARD

The third and fourth quarter of 2009 looks to be where the United States will reach an unemployment percentage of 10% and possibly over 10%. Thus, the hand ringing begins. Granted, anytime an able and willing worker goes without a job the unemployment rate is too high. But, all this is certainly going to change in 2011 when the first wave of baby boomers begins to reach the age of 65,

You'll notice below that 76 million boomers (actually 75.8 million) were born between 1946 and 1964 (18 years). Most economists believe that an additional 5 million immigrants have been added to that population...consequently they usually speak of the baby boom population as being 80 million. Even though this source indicates they now represent 28% of the population it's a much larger share of the work force. Conventional thinking is that one-third of the workforce is made up of baby boomers.

The numbers I gave you mean an average of about 4.5 million will begin leaving the workforce beginning in 2011, or about 370,500 per month. Most economist believe the economy needs to produce about 150,000 per month (1.8 million per year) to keep up with the people entering the workforce. Obviously that's going to get easier when 370,000 people begin exiting the workforce each month. Although this would not be new jobs created…but, jobs replaced.

According to bbhq.com.

"For the years 1940-1994, inclusive, 202 million Americans were born; about 77% of all Americans now living were born after 1939. During the baby boomer years, 1946-1964 (inclusive), 75.8 million Americans were born. The ratio of males to females has stayed relatively constant. There were approximately 1.05 male births for every one female birth.

The biggest year of the boom was 1957, when 4.3 million boomers were born. Why it took over 10 years for so many post-World War II families to get going is a matter of speculation. For the 5-year period between 1956 and 1960, inclusive, 21.2 million boomers were born, nearly 1 1/2 times the number born between 1941 and 1945, and the largest for any 5-year period in the 20th century.

Boomers today represent 28% of the U.S. population. But in 1964, they represented about 40% of the population. In other words, in 1964 more than a third of the population was under 19 years old! No wonder the baby boomers attracted so much attention. "

Then, according to babyboomercaretaker.com

“Within a decade, a large percentage of baby boomers would be approaching their age of retirement, thereby raising a deep concern on the issue of depleting work force that can affect the national economy significantly. Baby boomers comprise of one-third of entire work force in the United States and there are not enough youngsters who have the necessary skill so as to be considered a replacement. This situation has forced many companies to change the method of recruitment, retention and work schedules.

Mature workforce is a privilege in this current era of competitiveness as these workers are considered to be reliable, efficient, compassionate and honest. An effect of aging employees is a phenomenon that is going to have a global impact during the next decade that can cause a significant threat to future growth and productivity.

Hence, the issue of aging workforce has forced companies to recognize and value the issues surrounding the mature workforce. Companies are rethinking their policies related to recruitment and employee retention. It has changed the entire definition of working patterns. Considering the requirement of aging workforce, employers are bringing in flexible working hours in the office. Preference for part time jobs, telecommuting and job sharing is constantly on a rise among baby boomers. These people are less interested in working for long hours.
Baby boomers have also influenced the concept of retirement. Many of them want to still continue working even after retirement so as meet basic financial needs and to be engaged in their related fields. Others want to balance work and leisure during retirement. There are certain other groups who are getting enrolled into colleges so as to pursue their schooling ambitions. Some companies have casual worker program where aging people are re-employed, while providing limited benefits. Educated and experienced baby boomers are also being recruited as consultants.”

This modification of the workforce will dramatically alter employment going forward for the next 18 years. The short fall of available workers is going to turn our current employment environment upside down. Where we have had more workers that jobs…we start in 2011 to have more jobs than workers, probably in the neighborhood of 50,000 to 100,000 jobs per month. That is exactly the opposite effect as there is today.

The corrections will require figuring out ways to keep the baby boomer at least partially engaged in the work market. It may mean those pesky immigrants, the right wingers constantly complain about, may become very important. I suspect shorter work weeks, job sharing, flexible working hours, and probably an idea or two which might not previously have been considered will be used to persuade baby boomers back into the workforce.

It will have some positive effects on the national budget deficit. Although, due to the reckless use of funds during the Bush years, lavishing tax cuts on the wealthy and pursuing a war of choice, government spending has been ballooning to portions that make our heads want to explode, going forward unemployment spending, and even educational spending should come under control. Keep in mind, spending on food stamps would also subside with full employment. And, the need for educational loans would also like decrease as employers take over the training of their workers, and jobs being plentiful will coax students out of school and into the workforce. All this coupled with the lessons learned from engaging in needless wars and the disengagement in Iraq and Afghanistan should lessen the annual deficit and help return to paying down the national debt.

It’s going to look a lot different. And the recognition of this new environment is why we should always be thinking long term. Just as I knew Alan Greenspan and George W. Bush were blowing smoke up our collective asses when the proclaimed at the beginning of Dubya’s term that record surpluses would cause a problem going forward, it’s plain to see that we need to be aware that going forward we’re going to have a much different landscape for the economy. There will be government spending alterations, and we need to consider them. It would have been nice for Alan and Dubya to have considered what will all those surpluses mean if we have a recession or find ourselves getting into a protracted and expensive war. Those tax cuts for all Dubya’s buddies might not have been so attractive…at least to the rest of us.

The country will need to get through this recession recognizing how much different this will look in a couple of years. Politician’s will need to recognize that pulling back from the stimulus might push us into the depression we avoided (just go back and revisit the Roosevelt mistakes of 1933 when he decided to reign in the spending and the country went right back into depression). Think long term. There will be a time to deal with the national debt…but, now is not the time to fight that battle. However, beginning in 2011 the time bring spending into balance and to pay down the debt may come again.