US-Baby Boomers Leaving the Workforce

Investment Analysis Clubs Macro Economic Trends and Risks
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With Boomers leaving the workforce it would seem that the worker shortage will drive wages upward that will cause increased inflation. At least the FED is worried about it.

In the past, economic growth in general relies on the growth of the labour force.

What portends for the future of US economy?

policymakers at the central bank and economic experts do not expect those retirees to ever go back to work.

Among those 65 and up, on the other hand, participation lags well below its prepandemic level, the equivalent of a decline of about 900,000 people. That has helped to keep overall participation steadily lower than it was in 2020.

“Despite very high wages and an incredibly tight labor market, we don’t see participation moving up, which is contrary to what we thought,” Mr. Powell from the Fed said during his final news conference of 2022, adding: “Part of it is just accelerated retirements.”

With pay climbing so swiftly, Fed officials worry that they will struggle to bring inflation fully under control. Wages were not a major initial driver of inflation but could keep it high

That risk is why the Fed is focused on bringing the labor market back into balance, and it is what makes the wave of retirees particularly bad news.

The labor force participation rate has been falling in this country for nearly two decades.”

And the effect is threefold: (1) slower economic growth (because fewer people are working), (2) a rising dependency ratio (fewer workers to support those who are not working), and (3) higher tax rates (because the tax base from which the government draws revenue is smaller). Because of these effects, it is important to understand what has been causing the labor force participation rate to fall and whether it will continue to fall.

They cite secular (as opposed to cyclical) forces as the main reason for the decline—primarily, the start of retirement for the baby-boom generation.

The authors project that, by 2019, the boomers’ retirement rate will have increased by 1.1 percentage points over the 2016 rate, resulting in a corresponding 1.1-percentage-point decrease in the labor force participation rate. Then, the authors expect retirements to keep rising though the 2020s, so that, by the later years of that decade, the participation rate will have declined by approximately 4 percentage points over the 2016 rate. In short, the labor force participation rate of the late 2020s is projected to be about 59 percent, a rate not seen since the 1950s and 1960s

The above link is a slide show.
1)retirees spend less 40% less
2)retirees spend down there portfolios removing investment dollars from stockmarket putting downward pressure on market.
3)The large Boomer generation retirement means a slowdown in labour force growth.
4)Boomer generation use of medicare & drawing SS benefits drains trust funds that will need to be refilled with increased taxation. The load on remaining workers gets heavier as there are less of them to support seniors.

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“tjscott0, post:1, topic:86157”]
The above link is a slide show.
1)retirees spend less 40% less

This has me saying "So what? It’s a known and should baked into any cake. If matters at all. See next paragraph.

2)retirees spend down there portfolios removing investment dollars from stock market putting downward pressure on market.

All the 401k’s and IRA’s put together aren’t much of the stock market. Most of it is owned by Rich People who don’t figure into that math anyway. And they’d be selling it in drips not all at once. Besides, at least half, (probably more, haven’t done a body count,) of Boomers are already retired and have been for years now or they’re croaked already.

3)The large Boomer generation retirement means a slowdown in labour force growth.

Mechanization/computerization will continue to obviate workers as they have been for 100 years so there’s really less slack here to have to pick up. Necessity is the Mother of Invention. Immigration will continue to obviate American workers.

4)Boomer generation use of medicare & drawing SS benefits drains trust funds that will need to be refilled with increased taxation. The load on remaining workers gets heavier as there are less of them to support seniors.

Yes and no. If we continue to allow fewer and fewer people at the Top to continue to retain a larger and larger share of the productive output of the economy, yes, sure you’re gonna run out of resources to work with, but it’s not like the resources aren’t there. Some re-arranging of the furniture might be in order.

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I dunno. Sure the easy wrench turner jobs have been automated. How many engineering, chemist or software development jobs been automated?

There are less generation X to fill the Boomers shoes. The EU & Japan are in worse shape demographically than the US. Are there enough immigrants with the proper work & language skills to fill the jobs here, the EU, & Japan. I suppose Russia & China will be competing for those skilled immigrants also.

Those at the top control the legislators. When was the last time they allowed increased taxation upon themselves?
The size of those over 65 continue to grow as a percentage of the entire population and those support them shrink as a percent of the total population. Methinks the professional class will be burdened with the load.

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Yes, the last of the baby boomers born 1964 turn 59 this year. Many are already retired.

Some possible solutions are obvious. Raise the retirement age again (for full Social Security benefits and how about Medicare). Or allow more legal immigration for those with job skills.

Easy if on only we could get our Congress to get its act together and do something.

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Plumbers, electricians, other contractors, who’s bodies can’t be outsourced.

The engineering can be done from India.

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tjscott0, post:3, topic:86157"]
I dunno. Sure the easy wrench turner jobs have been automated. How many engineering, chemist or software development jobs been automated? [/quote]

And the ones that won’t be automated will still be done by the people who remain. It’s not like these jobs are a big part of the economy. AAAAAAALL the people aren’t going away.

There are less generation X to fill the Boomers shoes. The EU & Japan are in worse shape demographically than the US. Are there enough immigrants with the proper work & language skills to fill the jobs here, the EU, & Japan. I suppose Russia & China will be competing for those skilled immigrants also.

HA! Like all those people looking for better lives or more money are going to go to Russia and China. We don’t need them all anyway. We just need enough. It’s not a binary situation.

Those at the top control the legislators. When was the last time they allowed increased taxation upon themselves?

The size of those over 65 continue to grow as a percentage of the entire population and those support them shrink as a percent of the total population. Methinks the professional class will be burdened with the load.

We know, hence the furniture metaphor. However it ends up it doesn’t have to be that way.

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For those who missed it, an 82 year old guy was working as a cashier at WalMart, because he could not make ends meet on Social Security. A stranger started up a go-fund-me account and collected over $100K, so the guy can now afford to retire.

I was in WalMart last weekend. The guy they had checking for receipts of people leaving with merchandise would be disabled by some standards. A youngish guy, but he could barely walk or speak. I’m close to 70, but, if I had larceny in my heart, I could have walked right over him.

Meanwhile, chatter is the House is weighing various schemes to cut SS and Medicare. Reportedly, they are focusing on cutting benefits for people 50 and younger. As offered here before, if the pols didn’t need to worry about being reelected, they could cut benefits for able-bodied people who are retired now, and force them back into the workforce.
/slave driver mode

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Nice story Steve.

It’s really nice to know that some people still have it in their heart to actually give the person who was the subject of the campaign the dough that was collected!! That seems like a rarity these days!

Bravo!
'38Packard

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And now they are talking about the latest AI software that threatens to automate or replace many writing skills. Book or poem authorship. And potentially journalism.

You wonder if AI will be smart enough to listen to a politician’s speech and pick out what is new and interesting. And will it detect and report any fibs or flubs?

Technology marches on. All of us could be threatened.

Will TMF install AI technology to respond to our posts and sort out the documented facts?

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They already auto-filter words deemed nasty, no matter the relevancy, not very far from phrasing… A sheltered world is maybe here already…

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They have had that for years. I had trouble posting a book review that contained the word gl@ssblowlng.

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Well said. It should be a good thing, and it is in so many ways. I’ll illustrate this through my experience. Since we talk about work, say, automated workflow tools are being developed to make our jobs easier. So that a human being can get the job done faster. I will go ahead and say this - I feel pure joy every time I figure out how to work with new software. You absolutely can teach this old dog new tricks and it will be very much appreciated. But, like many other things throughout the history of mankind, technological development is getting out of hand and rapidly, if I may add.

This reminds me of something I read a long time ago when I first heard the term “algospeak”. Of course, the examples and the platforms mentioned there (like TikTok, Twitch, Instagram) are quite far from being my cup of tea, so it didn’t really affect me. However, almost a year later…I might face the same problem here.

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Fool Matsushita couldn’t use his last name!

The Captain

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Stealing this from a LinkedIn post but I have no link:

CodeGPT is an extension that allows us to use GPT-3 inside VSCode through the official OpenAI API. This is something like having ChatGPT in our code editor!

With CodeGPT we can generate code, explain code, refactor code, and more.

But that’s not all! Here are Other things you can do with CodeGPT:

  1. Ask questions
  2. Refactor code
  3. Document code
  4. Find problems in your code

VSCode is a popular editor for writing code in. Normally it does simple but useful tricks to help programmers, like auto-complete variable and function names, auto-indenting code, etc. But this goes to a whole new level. Its the beginning of machine generated software, and more.

A friend with much more knowledge of what is happening than I am speculates that perhaps 25% of all software is now written by AI, with that share expected to rise at a pretty good clip. They are calling it the death of programming. I’m not sure how I feel about this.

Bill - Austin
Comp Sci degree, 30+ years programming in the hi-tech world of microprocessor development
Not sure what I want my 11 year old daughter to eventually study now

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You may suspect the creative part of programming still needs human input.

Automating the drudgery of putting it all together and debugging it might be welcome. Compared to the long hours involved.

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Absolutely. It’s become really tiresome to repeatedly explain to non-technical business “product” types that “that coool new web page you drew up in Figma in a couple of days still takes a month for a team to build & test correctly” regardless of “agile”.

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