The number of Americans ages 65 and older is currently thought to be somewhere around 46 million. This number is projected to more than double to over 98 million by 2060, and the 65-and-older age group’s share of the total population will rise to nearly 24 percent from 15 percent. While many economists warn of the impending costs of social security and medical care, another sect has been quietly anticipating the economic impact upon the workforce. Simply put: how will we compensate when a large, experienced portion of the workforce retires?
Common sense suggests that older workers can be the most knowledgeable and most experienced. As they retire, most of us would expect to see slight, temporary decreases in productivity until the loss of experience can be replaced …right? One study published earlier this summer came to a startling and disturbing conclusion. After looking at all 50 states, the states who aged faster saw a massive macroeconomic impact following baby boomer retirement. Not only did productivity decrease, but overall business development and economic growth significantly lessened for a sustained period of time, regardless of the population’s ability to replace the retiree with a new employee.
Greg Ip, chief economic columnist at the Wall Street Journal, attributes this to the fact that retiring employees are only the most capable, but they also tend to increase the productivity and value of younger employees. Quite simply, these workforce veterans bring vital skills to the table that no degree or technology can afford the new generation of employees. Ip’s solution? We must do more to keep senior employees involved pre- and post-retirement, or suffer the consequences.
Common sense suggests that older workers can be the most knowledgeable and most experienced. As they retire, most of us would expect to see slight, temporary decreases in productivity until the loss of experience can be replaced …right? One study published earlier this summer came to a startling and disturbing conclusion. After looking at all 50 states, the states who aged faster saw a massive macroeconomic impact following baby boomer retirement. Not only did productivity decrease, but overall business development and economic growth significantly lessened for a sustained period of time, regardless of the population’s ability to replace the retiree with a new employee.
Greg Ip, chief economic columnist at the Wall Street Journal, attributes this to the fact that retiring employees are only the most capable, but they also tend to increase the productivity and value of younger employees. Quite simply, these workforce veterans bring vital skills to the table that no degree or technology can afford the new generation of employees. Ip’s solution? We must do more to keep senior employees involved pre- and post-retirement, or suffer the consequences.