Now the Baby Boomers Are Holding Back Our Economic Growth
Because they’re not as productive as they “should” be.
If the economy seems to be moving a little more slowly these days, it’s because… you know what, I can’t even make the joke, I don’t want to insult Baby Boomers, let’s just get to the research:
So far, the 2010s have been a disappointing decade for economic growth. Since the economic recovery began in 2009, the…www.vox.com
How much does an aging population lower economic growth? In a recent study, a team of researchers at the RAND Corporation tried to answer this question by comparing growth rates across different states. Some states have older populations than the nation as a whole, while others are younger. By comparing these states’ relative growth rates (while controlling for factors like people moving between states), they were able to estimate how much having an older population held back economic growth.
They came up with a surprisingly large number. “Our results imply annual GDP growth will slow by 1.2 percentage points this decade due to population aging,” the authors write. For comparison, the economy only grew at an average rate of about 1.8 percent over the past 50 years, once you adjust for population and inflation.
Why does an aging population slow down the GDP? Because older people are less productive than younger people.
The larger factor is that older workforces are less productive on a per-worker basis. Nicole Maestas, the study’s lead author and a professor of health care policy at Harvard Medical School, tells me the team’s research method can’t show why older workforces are less productive.
Wait. The team’s research didn’t go into that? Okay. I’ll pick up where y’all left off, then. Time for me to sit down in my Economist Armchair and put my feet on the nearest soapbox.
- What kind of productivity deficit are we running, here? Can you quantify it in terms of actual value? If an older worker is not Exceeding Expectations in terms of production, have the expectations been properly communicated? Are those expectations reasonable? How have those expectations changed in the past 20 years, and how much more are people expected to produce today?
- How many additional responsibilities do these workers have? Are they providing care to children, adult children, grandchildren, partners, or aging relatives? Are they commuting long hours because that’s where the affordable single-family homes are? Are they managing their own healthcare needs? Does your ideal productivity metric allow your workers to have additional responsibilities, or do you expect a higher level of commitment than your workers are able to give?
- If you think these workers should just retire already, have you been paying them enough, over the past 35 years, to save adequately for retirement? Do you match your workers’ 401(k) contributions? Have you done the math on how much money your workers earn per month after taxes, healthcare premiums, and other costs are deducted—and compared that number to your area’s cost of living?
- If you do in fact believe that “older people are just slower” or whatever, have you factored that into your project management? Have you considered hiring additional people to hit your productivity goals? I realize that the cost of hiring a new person might be greater than the cost of being slightly less productive, but have you done the math on that? There are a lot of people looking for good jobs, after all.
- What if we were just a little less productive for a while? Does everything need to grow at a steadily increasing rate, “a roller coaster that only goes up,” like the young people say? (That book is four years old, by the way. We’re all getting older all the time, like the unidirectional roller coaster. A bunch of Millennials are already thirty-five.)
- If the economy grew 1.8 percent since 1960 but will shrink 1.2 percent this decade, that’s like saying the economy went from 100 to 101.8 over 50 years and then went down to 100.6. We’re still ahead. I know it looks like we lost two-thirds of what we gained, but we’re still ahead.
- How much of that economic loss is really based on Bob and Barbara not being able to produce as much as Brian and Madison, and how much of it is based on large corporations manipulating banking and real estate industries towards an economic collapse? Are we just ignoring that?
- On the subject of the Great Recession: The Bureau of Labor Statistics says that labor productivity has grown 1.7 percent between 2007 and 2013 even though we were in, and recovering from, a recession so large they gave it a title.
I’ll stop here and let y’all continue the discussion. I know there are a lot of reasons for Millennials to get salty with Baby Boomers (and vice versa, and let’s not forget Gen-X) but this doesn’t actually seem to be one of them.