Boomer's Retirement Starting To Bite

[icyfroth]

Rightly or wrongly, the baby boomers are often made out to be an economically selfish bunch. Such sweeping claims can only get us so far, but this is a generation that has enjoyed asset price booms, job security and social spending that their kids are unlikely to experience.

So it has been surprising to see the boomers' economic role getting some more positive press lately.

For one, they received some of the credit for a fall in last month's unemployment rate, because more of them have been dropping out of the labour force and into retirement.

The baby boomers are a large cluster of people born between 1946 and 1961, when birth rates skyrocketed around the world.

About 4 million of them were born in Australia, and as more reach retirement age it will unleash big economic changes.

The media's main interest in the jobs market is the unemployment rate, but this tells only part of the story. Another critical issue is the share of the population that is working and paying tax, and the share that is being supported by the taxpayer because they are too old or too young to work. On this front, things are getting more challenging.

Consider the participation rate, the share of the working-age population with a job or looking for one.

Australia's participation rate is now at its lowest level since 2006, at 64.9 per cent, after peaking in 2010. Mechanically, this lowers unemployment, because it means there are fewer people competing for jobs. But if you look a bit deeper, it is not so rosy.

A paper by the ACTU last week confirmed the slide in participation in recent years is the result of the population getting older.

Even though some people over 65 are choosing to keep working, the paper showed Australia's participation rate has nonetheless been dragged down by the growing share of the population that is older, and less likely to work.

Australia's ''old age dependency ratio'' - which compares the number of people over 65 to those of working age - will jump by a quarter between 2010 and 2020 and keep rising thereafter, says Standard & Poor's.

Slowly but surely, the same dynamic is starting to drag on growth in material living standards in most big Western economies.

Read more: click here

So who here is going to retire at 65, and who plans to keep working?

[the_great_she_elephant]

Possibly a good topic for DY and LL to blame upon Abbott.  There is the history aspect for DY,  and whatever media source reporting for LL to diss

I'm disappointed in you, John - I may not agree with all your posts but at least they are usually intelligent and well considered. Stooping to gratuitous provocation does you no favours at all.

It has been known for decades - and should probably have been obvious from the moment the war ended and the returning soldiers set about procreating with such gusto -  that this problem would inevitably arise. Hindsight is a great thing though,  and trying to pin the blame on any particular Government is a bit pointless.. 

[the_hawk*]

One has to wonder how much the policies of the day have caused the current problems with a large percentage of the population ageing at the same time.

It wasnt just a jump in birth rates, it was a masive influx of migrants that built this country and the children they brought with them or had after arriving.

http://www.migrationheritage.nsw.gov.au/exhibition/objectsthroughtime-history/1945-1965/