August 19, 2019
Working Americans got older too. The median American worker is 42, which is up four years from two decades ago.
And as Baby Boomers continue to retire, the number of those in retirement age is growing quickly. The Census data show 16 percent of our population is age 65 or older. That’s up 30 percent since 2010!
Meanwhile, the number of people younger than age 18 has fallen 1.1 percent.
When it comes to aging, we’re used to hearing “doom and gloom” often. We hear Social Security is running out, medical care costs more, we don’t have enough saved for retirement, and so on.
In some ways, this all goes back to the fact that we’re getting older, which breeds some negative economic impacts.
For instance, a National Bureau of Economic Research paper showed how a 10-percent increase in the number of people over age 60 reduced per capita gross domestic product growth by 5.5 percent.
Unfortunately, the state of our labor supply doesn’t help things.
Younger people are replacing older workers, which is good. However, the overall share of working Americans is shrinking while the number of elderly people who don’t need a paycheck is increasing.
In fact, by 2030, only 59 percent of American adults will be in the labor force – 3 percent less than in 2015.
Our aging, dwindling working population also accounts for fewer start-up businesses. Today, half of American businesses are 11 years old or older. In the 1980’s, it was about a third. That means less competition because fewer firms are entering the market.
Based on these findings, growing the economy going forward could be tricky.