Dire predictions about the strain baby boomers will place on federal entitlement programs may not be so worrisome after all.
That’s the view expressed by Chris Farrell, a contributing economics editor for BusinessWeek, in an article headlined “Aging Boomers May Bring Fiscal Blessings Instead.”
The oldest of the roughly 76 million American baby boomers born between 1946 and 1964 are now becoming eligible for Social Security and Medicare, creating concerns over an entitlement overload.
But for the U.S. economy, “the dire forecasts may be overstated,” according to Farrell.
“The ranks of boomers expecting to kick back and retire soon are shrinking fast. A lifetime of poor savings habits coupled with the devastating impact on retirement portfolios of two bear markets in eight years have convinced many boomers that they'll have to put in more time at the office. This should reduce the demands on Social Security and Medicare.”
Despite high unemployment and underemployment rates that may be long-lasting, jobs might well be available for 55-plus workers, according to a set of studies cited by Farrell.
The study authors Barry Bluestone, Dean of the Public School of Public Policy and Urban Affairs at Northeastern University, and Mark Melnik, deputy director for research at the Boston Redevelopment Authority conclude: "Using history as our guide, we believe that the economy will recover. When it does, given the population dynamics of the very near future, it's clear that older adults will need to participate in the work force in numbers considerably larger than they do now, or the nation will be unable to fill millions of jobs between now and 2018."
Even with a weak employment growth rate, the scholars predict that 14.6 million additional nonfarm jobs will be created by 2018, most of them in the knowledge- and skill-intensive sectors including healthcare, education and government.
“The baby bust generation that followed the boomers is too small to fill those jobs,” Farrell writes, and up to 5.7 million jobs “could go begging,” assuming no major changes to immigration.
“It's hard to imagine that employers will let from 30 percent to 40 percent of these additional jobs go begging over the next decade.
“Survey after survey has shown that a majority of boomers say they want to work in their elder years. They're going to get their wish.”
And these experienced workers will continue to pay taxes on their income, Farrell concludes, “making the government debt tab easier to meet.”