Can immigrants rescue the US economy as the baby boomer generation retires in large numbers?
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Every day, approximately 10,000 individuals from the generation born between 1946 and 1964 are exiting the American workforce. This phenomenon has been amplified by the COVID-19 pandemic, as older employees have opted to retire early instead of potentially falling ill.
According to Dana Peterson, the chief economist at The Conference Board, a research group, there is a shortage of workers due to the retirement of baby boomers. This shortage has been expedited by the pandemic, causing a more severe lack of skilled younger workers to fill their positions.
Peterson was a speaker at a virtual symposium hosted by the Brookings Institution.
According to Selcuk Eren, a senior economist at The Conference Board, the issue lies in the fact that for each person who leaves, only one new person enters the labor force. This stagnant labor force leads to restricted growth.
“The growth of the economy will be limited by the size of the workforce,” states Eren. “Having a one-on-one ratio means that there is no increase in the labor force, resulting in a decrease in economic growth.”
Over the past five decades, individuals from the baby boomer generation, with the youngest now reaching 60 years old, have been the main workforce in America.
As more baby boomers retire, the federal government workforce is anticipated to suffer significant impact.
According to Eren, currently 40% of the federal government consists of individuals aged 55 or older. This indicates that a large number of retirements will occur in the near future. Finding replacements for these retirees will be challenging due to a shortage of younger individuals, especially those with the necessary educational qualifications for these positions.
A study by the Conference Board investigates the industries that may experience the greatest shortage of labor as older individuals retire from their jobs.
These include so-called blue collar, or manual labor jobs like personal care, food services, cleaning, construction, installation, maintenance and occupations involving repairs. Production and transportation jobs will also be impacted by departing baby boomers, but to a lesser extent, according to the report.
According to the report, there will be a significant shortage of workers in the healthcare industry due to the increasing number of elderly baby boomers who will need assistance with personal care.
The amount of people retiring is predicted to greatly surpass the amount of new employees joining the workforce in the next ten years.
Workers in the fields of science, technology, engineering, and mathematics (STEM) have a decreased likelihood of experiencing shortages. The report suggests that job roles that permit remote work will face less severe labor shortages. Generally, occupations that mandate a college education have a lower potential for labor shortages, though some are still vulnerable.
According to Eren, the same patterns will occur in the field of dentistry. Approximately 50% of dentists are over the age of 65, and there is a shortage of younger individuals entering the profession.
According to Eren, immigration may offer a solution to mitigate the effects of baby boomers retiring from their jobs.
According to Eren, the most efficient approach would be to prioritize immigration for individuals with the necessary skills, as it takes time to train younger individuals to reach that same level. Additionally, incentivizing potential retirees to delay their retirement could also help alleviate the skills shortage.
Potential motivations such as tax and social security measures that do not punish those who continue working in their seventies. Additionally, providing greater adaptability through options such as remote work or reduced hours for individuals approaching retirement age.
Jobs in the healthcare field are predicted to face significant shortages as the aging population of baby boomers will need more medical care.
For Kristin Mariani, a professor at a college in Chicago, the exit of the baby boomer generation means more chances for her students.
Mariani, an adjunct assistant professor at the School of the Art Institute of Chicago, believes that the impact of providing education to younger generations is allowing them to become decision-makers and change-makers. It is important to ensure that these individuals are equipped with the necessary knowledge and skills to fulfill these roles.
Career consultant Julia Toothacre predicts that the decreasing number of older employees will lead to disruptions as businesses grapple with adapting to a shifting environment.
According to Toothacre, who works as a resume and career strategist at ResumeBuilder.com, the potential downside is that companies may undergo more restructuring. However, restructuring is a normal aspect of business and is currently happening. These fluctuations will continue to occur, but it can also lead to new opportunities. As the market evolves, the conversation may change in a few years.
Source: voanews.com
