What’s going on:
The United States is witnessing a surge in the number of retirees, primarily due to the aging baby-boomer generation (those born between 1946 and 1964), according to The Washington Post.
In 1984, people under the age of 40 made up more than 60% of the workforce, but that has now fallen to 45%, according to the report. This demographic shift is causing a large decrease in the worker-to-retiree ratio, as the number of new workers entering the workforce is not keeping pace with the growing ranks of retirees.
Why it matters:
The number of workers per retiree threatens the sustainability of programs like Social Security and Medicare, which rely on taxes from current workers to support older Americans. As the working population shrinks, so does the funding for these programs, potentially leading to higher taxes or cuts to benefits. Moreover, the increasing number of retirees is creating a heightened demand for healthcare services, exacerbating existing care shortages.
The U.S. Bureau of Labor Statistics projects that the healthcare and social assistance sector will create “the most jobs over the 2021-31 decade.”
How it’ll impact the future:
The research suggests that this demographic shift will likely contribute to a slowdown in U.S. economic growth even with more people working into their 60s and 70s due to longer life spans, financial incentives, and high costs of living. However, the decreasing worker-to-retiree ratio will put pressure on younger generations to fill the gap, potentially leading to changes in employment patterns and career trajectories.
The increasing demand for healthcare services could also put a strain on that industry, which in turn will likely lead to projected job creation in that sector. However, the availability of workers may not keep pace with the growing need, leading to potential care shortages.