The graying of America's workforce will come as no surprise to regular readers. Just earlier this month, we wrote that in a little noticed aspect of the "stellar" June jobs report, the vast majority - or 90% of all new jobs - went to workers 55 and older.
Hardly an outlier, this was the latest confirmation of a very troubling trend: all jobs created since the recession started in December 2007 have gone to workers 55 and older.
In fact, in the latest month, there was a record 34.5 million workers in this age group: the only one that has seen persistent growth this century (and with the concurrent surge in waiters and bartender jobs in recent years, we even have a sense of what they are doing).
We won't go into the reasons for this dramatic divergence (we have covered it extensively in the past); instead we bring up these observations because according to a new NBER paper, this stunning trend is what is being used to scapegoat the accelerating collapse in US productivity. As Bloomberg reports, "population aging is expected to drag on U.S. growth, and the hit could be substantial."
According to the National Bureau of Economic Research, the retirement of baby-boomers in the decade between 2010 and 2020 will lower GDP growth per capita by 1.2% a year from what would have been the case if the nation's demographics had held steady, while slamming productivity.
Roy I teach, and I completely agree with you. I work very hard to instill a Puritan Work Ethic in any and every way I can in the classroom.
The work ethic begins at home with 'chores' and carries over to schools with 'home work' teaching children to budget their time and that work is a primary part of life... not television, digital games and social networking. By the time I was old enough to ride a bike I had a paper route, mowed lawns for income, and worked in the fields picking crops and tending livestock... I never lacked for funds to enjoy my time off and often found ways to mix play with work... not always successful.
Col And I babysat for years. When I got my permit, my Dad bought me a car. I chauffered my Mother around all day on Sat., bank, grocery, clothes, lunch, etc., Then when I had my license, I worked at a paint/etc store. I competed with my cash register in calculating change. I calculated it in my head faster than the register. I never missed. Shortly thereafter, I managed the entire Health and Beauty dept. at that store. My ethic has always been to grab every opportunity and excel. Nothing else will do.
So, knowing that many students come into college with lousy family situations, etc., we all (in my dept) try in our own ways to instill this ethic. We also have to play Mommie, many times. The things we hear..................omgoodness.
However, sometimes, instead of Mommy, I am Mommy Dearest....
Roy, thank you. What a great comment. You and your wife are great Americans, and the wealth that your business creates contributes greatly to the quality of life in society. Congratulations!
"America's Aging Baby Boomers, Forced To Work Until Death, Blamed For Collapsing US Productivity"
The title says it all. What an asserted load of democrap sophistry. As 59 year old, my experience working 50 hours a week and out-producing Gen Xers, is that some in the new crop figures it has no chance to achieve the so called "american dream", so why not just kick back and enjoy the ride? You can't be killed for inefficient productivity, can you ?
But given the finished product of our current public education system (sorry JEA9), is it any wonder when businesses are actually preferring older, more experienced, more knowledgable hirees? Businesses have been significantly emancipated from older worker liabilty by universal healthcare, and has stripped the health advantage away from younger workers. That levels the playing field. IMO
no offense taken. I am in the minority in many things in school. And just because I try does not mean I succeed.
Regardless of what's behind it, the discovery that the aging workforce could be weighing on productivity comes in contrast to other guesses, is important. The Fed has long been pondering over the issue of sliding US productivity. As Bloomberg adds "it's not clear why productivity growth has dropped off, and the change has real-world implications: it's one factor that caused Fed officials to lower their projections for where interest rates will settle in the longer-run, based on meeting minutes from their June meeting."
What's worse about the new findings is the suggestion that already slumping productivity is set to get even worse. If growth over the next 20 years otherwise held near its average for the 1960-2010 period — about 1.9 percent — adjusting for the demographic shift would lower per-capita GDP gains to 0.7 percent this decade and 1.3 percent next, based on the estimates.
It also means that the natural rate of growth is likely at or below zero, which also confirms that any attempts to hike rates will be doomed to failure as the US economy simply can not sustain a rising cost of money, thus forcing the Fed to ease after every single rate hike.
But while we agree that the relentless aging of the US workforce will have dire implications for the future of the US productivity, as well as economic growth, it is clear that the study never got to the fundamental culprit, which is the Fed itself.
Because the glaringly obvious tangent is that old workers are stuck in what now seem to be "lifetime" jobs, with no hope of retirement, for one overarching reason: the interest income generated by savings is zero (and negative in real terms). This means that as an entire generation of workers has found out the hard way it will never have the planned cash flow from savings parked in the bank; it is therefore doomed to work until death. By implication, it also means that the entire younger generation, in this case the biggest one in US history, the Millennials, will be stuck unable to enter the workforce and to build critical labor skills, as a result of lack of hiring as employers retain their old, experienced, and thus much more cost-effective workers for as long as they possibly can.
Our advice to the Harvard authors of the study: in the next part of the study, the one looking at why the US finds itself in this situation, please look at the Fed's monetary policy. Because with over $10 trillion in savings generating no income, and thus crushing the velocity of money, the real reason why the US is facing a productivity crisis of epic proportions is because the central planners in the Marriner Eccles building have destroyed an entire generation's hopes of being able to retire.
As for those elderly Americans stuck in menial jobs until their dying day, our condolences.
"As for those elderly Americans stuck in menial jobs until their dying day, our condolences."
The "stuck" qualifier can be as much about percieved fear over current affairs, as any other reason. Remember how some folks who lived through the early 1900s Great Depression, were stingy as all get out, and would be found dead in sparse living conditions with a mattress stuffed with a lifes savings they would not spend on themselves or deposit?
They did not trust banks! You know, like we do. Please pardon my sarcastic streak. It comes on like Tourettes. LOL
We live in interesting times too.
The Gen X'rs and Millennials don't have the same work ethic... that is why production has dropped off... the replacements for Baby Boomers are simply less productive and much more problematic.
Globalism is also part of the problem... as we find heavy and light industry moving out of the US so do many of the job which had higher rates of measurable productivity than service jobs.
Why the surprise... America's workers have been at the top of the heap in productivity for decades.... they are now slowly declining to reach the productivity rates of European Countries and ... in the long term ... Globalism and the reeducation of America to globalist standards will result in further declines in production. GI Joe has turned in his helmet for a nightcap.
Colonel, this Youtube 1949 video is for you! The last statement about American workers in the US free-capital market economy is sure to gag the socialists who see it.
To Set Things Straight!
Our Gov't Has Been the Culprit of Our Decaying Economy Due to Their Playing GOD in Attempting to Take Care of the Entire World that Accepts Our Help and Even intervening in Countries that Hate Us as Not All People Want to Live the Lifestyle We Live as Hard as that is to Imagine... Religious Practices Vary as to How People Choose to Live...
Our Gov't, Particularity When We Have a Liberal Presidential Administration, Seem to Think It Can Hand Over Billions of Dollars to Countries to Buy Their Acceptance or Cooperation with the US Which is Utterly Bull Crap... Our Dumb Ass Politicians Just as Well as Hand Out Flowers Like Liberal Hippies, Preach Peace and Sing Kumbaya!
Bottom Line We Can't Fend for the Whole Damned World and the American People Are Being Screwed Out of a Decent Living and Many Have Lost Homes and On the Streets ALL BECAUSE of Our Sorry Ass Gov't and What's Worse... the American People Will NOT Stand Up to It and Tell Them Enough is Enough!!!
It Has Regulated Our Industry Right Out of the Door of the US and Across the Ocean!!!... Our Gov't is Killing US Off and that's Not Necessarily in Terms of Life but Mostly in Spirit, Our American Spirit!!!
If Our Gov't Was as As Attentive to Its Own People as it is the Rest of the World, Seniors Could Relax and Enjoy What Life They Have Left Instead of Having to Continually Work Just to Keep Food in the Cabinets!!!.. Tell the Gov't Straighten its Ass Up and Maybe the Country Can Survive This Irresponsible Socialist Attack on Our US Constitutional Republic and Just Maybe Our Children Can Have Jobs to Go to and Take Care of Their Families While Their Grandparents Are Sitting Back Enjoying Their Families Instead of Still Having to Work to Survive!!!