Boomsday is coming

| January 11, 2008

Megan McArdle, my favorite blogging economist, has a lengthy, thoughtful analysis of what the retirement of the Baby Boomer generation may mean to America:

As the Boomers age, they will consume fewer of the things that we produce efficiently, and more of the things that we provide relatively inefficiently. Productivity is notoriously difficult to pro­ject, but many forces will be pushing it downward as the Baby Boomers age.

Since services are labor-intensive, and the number of service-consuming seniors will grow rapidly, we’ll need a lot more workers (that’s bad news for those who favor restrictive immigration policies, particularly the kind that keep low-skilled workers out). And, of course, the mix of service workers that we’ll need will be different from what it is today. In effect, the next 20 years will require a massive transfer of resources and people away from the care of children, who will decline in relative number, and toward the care of old people…

But low pay is only part of the story. Almost everyone has heard a classmate or friend say they want to “work with children” when they graduate. When was the last time you heard someone say they wanted to “work with old people”? Children represent the future, and your own happy past. The elderly represent your own mortality, and your powerlessness to do anything but manage decline. This will be a major problem for the economy as our society ages. The nursing home in Newark pays a government wage, with government benefits, and in Newark, that’s good money. But it struggles with a shortage of RNs, while the local school district has no trouble filling slots.

Of course, if you raise wages enough, you’ll find more job-takers, and the shortages will eventually disappear. But that means higher health-care costs (more on this later). It also means more people taking work that they might find emotionally difficult and psychologically unsatisfying, predominantly for the paycheck. How do you tally the social costs of that?

As the saying goes, read the whole thing. And then order and read Boomsday, a hilarious novel on the same subject by Christopher Buckley (author of Thank You For Smoking). ..bruce w..

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Category: Economics, Main, Recession Watch, US Politics

About the Author ()

Webster is Principal and Founder at Bruce F. Webster & Associates, as well as an Adjunct Professor of Computer Science at Brigham Young University. He works with organizations to help them with troubled or failed information technology (IT) projects. He has also worked in several dozen legal cases as a consultant and as a testifying expert, both in the United States and Japan. He can be reached at bwebster@bfwa.com, or you can follow him on Twitter as @bfwebster.

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