Fractures, Fissures, and Fault Lines: Challenges Accompanying Baby Boomers Retaining Employment in a Recovering U.S. Economy

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Executive Summary

No economic downturn continues forever, and there are indications that the U.S. economy may be in recovery by as early as 2010. Given a potential scarcity of available workers in the U.S. by 2010, businesses may consider enticing Baby Boomers to delay their exit from the labor market beyond the traditional age of retirement. The purpose of this study was to explore relevant data and generate reasonable conclusions regarding whether such enticement is likely to provide a necessary bridge across a potential gap in the demand and supply of labor. Examining data within two incarnations of the National Survey of Midlife Development in The United States, results suggest that enjoying reasonably good health but with finances incapable of supporting full fledge retirement, as many as 23 million Baby Boomers in the U.S. can be expected to respond to incentives and remain employed beyond the traditional age of retirement. However, the results also reveal age related stereotypes prevalent in the general population that are likely to haunt those same Baby Boomers and generate intergenerational fractures and fault lines across organizations.

Introduction

Mired in the worst economy in 20 years, unemployment in the U.S. is expected to increase from an estimated 5.7% to 7.8% by the end of 2009 (Pierson, 2008), certainly not a situation which indicates that U.S. businesses would have a concern about the available supply of labor. However, Pierson (2008) takes note of subtle positive changes in select economic indicators, impending interventions by the Federal Government (e.g. smaller supply of housing closer to the existing demand, massive stimulus plans, etc.) and an economic forecast that sees the beginning of a recovery by 2010. If the anticipated economic upturn is somewhat sharp and rapid, rather than having an ample pool of labor, U.S. businesses may be competing for labor from a shrinking pool, and Baby Boomers in the U.S. are likely to play a pivotal role in meeting the demand for labor.

The Baby Boom Generation, 78 million strong in the U.S., born roughly between 1946 and 1964, was the largest cohort ever to enter the American workplace, but little reported by those who documented their march across history is the fact that their birth rate merely reached parity with similar levels at the turn of the century and was still lower than levels experienced in America during the 19th century (Alwin, 1998). In short, the generations that followed the Baby Boomers are not nearly as great in numbers.

The Baby Boomers are approaching the years when retirement and withdrawal from the labor force has been customary in prior generations. For the older half of the Boomers, the Social Security Administration (2007) considers the age for full retirement as 66 years with that definition increasing to 67 years for those in the younger half. Leonard (2008) observed that nearly 25 million Baby Boomers will reach retirement age by the year 2013. Concern is emerging regarding the inescapable demographic reality that succeeding generations born in the U.S. will not provide adequate numbers to replace Baby Boomers in the workforce when they exit. As evidenced by Schramm and Burke's (2004) report entitled Workplace Forecasts: A Strategic Perspective, the Society for Human Resource Management has serious concerns about the rapidly approaching scarcity of available workers in the U.S. Using information from the Bureau of Labor Statistics, they concluded that by the year 2012 there will be approximately 21 million new jobs but only 17 million new entrants into the labor force.

Such a gap between the available supply of labor and the demand for labor has serious implications for business firms in the U.S., and it is reasonable to assume that employers will take actions designed to forestall exodus from the workplace by their Boomer employees, if not to maintain an adequate level of employees then to retain access to their accumulated workplace knowledge and experience (SHRM. …