America is Not Aging Gracefully-Implications For the Economy
IN THIS ISSUE:
1. America is Not Aging Gracefully, Dire Implications
2. An Aging Population is Bad News For the Economy
3. As Workers Age, Productivity & Innovation Decline
4. How to Deal With This Serious Problem Going Forward?
America is Not Aging Gracefully, Dire Implications
The average American is getting older as Baby Boomers hit retirement age and our national birthrate continues to fall, according to new data from the US Census Bureau. The median American was 38.2years old in 2018, the Census Bureau said, up from 37.2 years in 2010.
The American working population is getting older, too, and that has some gloomy consequences for the economy. The median age of the American worker today is 42, four years older than the median working age 20 years ago.
The number of Americans who have crossed into retirement age is growing rapidly, the new Census figures show. In 2016, 16% of the US population was more than 65 years old, up 30% since 2010. Over the same time, the number of Americans who are under the age of 18 has fallen by 1.1%.
Americans are used to hearing dire warnings about aging. We are told it could bankrupt the social safety nets as Medicare and Social Security run out of money. We are regularly reminded about the inadequacy of our retirement nest eggs.
Yet these may be the least of our worries. While reshaping the workforce and improving our patterns of saving and investment are indeed important, the aging of the American population is carving an unexpectedly broad path of concern across the economy. Unfortunately, there’s little we can do about it -- unless we’re willing to significantly change our immigration policies.
Aging, according to recent economic research, is stunting the emergence of new businesses and sapping productivity -- although worker efficiency saw a nice bounce in the 1Q, as I wrote in my BLOG on June 27. Aging is contributing to the rise in corporate monopoly power and eating into workers’ share of national income. Many of our economic ills can be traced to some degree to this irreversible fact: America is getting old.
This problem is, of course, not limited to America. Europe, Japan and several other developed nations face the same problem – in some cases even worse than our own.
Today, we’ll look at some of the major implications our aging population will have on the economy and other important trends. Let’s begin with the most basic measure of progress: economic growth.