Baby Boomers Shift Demographics

We read a lot about the long term unemployed that give up trying to find a job. But we’re now seeing that declining workforce participation may be due to the greying of America.

And this trend should last until at least 2020.

A report by Alicia Munnell, director of the Center for Retirement Research at Boston College, looked at the bulge of baby boomers born between 1946 and 1964. The study concluded that the shrinking of the US workforce began about 2000. This puts the start of the trend before the brief recession at the beginning of the 21st century and the crash beginning in 2007.

The reality is that the US is in the process of a dramatic demographic change – the rapid aging of our population. And this change has implications for the participation and employment figures that we see every month. James Bullard, president of the St. Louis Federal Reserve, said demographic change offered a reasonable explanation for recent US trends that show unemployment dropping as workers leave the labor market.

The proportion of the US population working or looking for work has dwindled from 66% in 2000 to 62.8% in 2013. Clearly workers in aging groups have different propensities to find employment.

In 2000, boomers were overwhelmingly concentrated in the 36-54 age group, where employment rates are the highest. But every year since then, an even greater number have moved into the 55+ age category, a group less likely to be employed. This boomer bulge will not work itself through the system until 2020.
About 84% of those aged 25-55 are in the labor market. But after age 55, workplace participation rates begin to fall sharply. This is happening in spite of the advantages to older people who remain at work.
The percentage of those ages 55 and older that are still working has risen from 32.8% in 1980 to 43% in 2010. But baby boomers account for an ever-larger proportion of the US population. That rise has not been enough to offset the fall in the overall percentage of people working or looking for work.

For US companies, the greying of America has enormous consequences. Certainly in every industry associated with drugs, medical care, and patient care the changes are critical. The aging baby boomers bring with them a lifetime of acquiring the best goods and services. That propensity dictates they will demand new trophies. Smart marketers will understand this, and fulfill this need. Today’s seniors are nothing like their parents. They are healthier, eat the right foods, exercise, take classes and stay engaged. One of the areas for marketers to take advantage of is that these aging boomers are relocating to the South and West.