Retirees as a New Growth Industry? Assessing the Demographic and Social Impact
Watkins, John F., Review of Business
Assessing the Demographic and Social Impact
The United States population, with about 13 percent of its members being at least 65 years of age, is getting older. This phenomenon is now widely known; it has attracted not only extensive research attention but has also been widely covered in the popular press. Indeed, few people have not been influenced by America's aging population in one way or another. We have seen relatives or friends move into retirement, many of our favorite vacation haunts appear each year to have more seniors when we visit, we wonder how best to care for our elders when their health fails, and we express increasing concern about individual financial security after retirement. And a growing number of us are seniors.
A traditional stereotype of 'the older person' includes notions of loneliness, poverty, frailty, and diminished mental capabilities. These notions have, of course, been supported by observations that many elderly live alone after children move away and a spouse dies, income is often dramatically reduced after separation from the labor force, and the human body physically just wears out after so many years. The post-retirement population is, however, far more diverse than traditional stereotypes suggest, and it is now quite evident that a large segment of this population is not only quite active and vibrant, but also relatively wealthy. These characteristics have not gone unnoticed, especially by marketing agencies, housing developers, and government officials at both local and state levels. In short, recent retirees who are healthy and financially secure have been seriously viewed as a potentially viable means for promoting economic development, and interest in this 'New Growth Industry' seems to be spreading.
The central theme of this article is that of retirees as a New Growth Industry. I will not, however, attempt to fully cover existing research nor present new empirical findings. Instead, I intend to play the devil's advocate. By doing so I hope to increase awareness of the complexity of population aging and, concomitantly, of the often hidden pitfalls of retirement-based growth strategies. It has become apparent that attempts to implement these strategies may at times be made without full recognition of the industry's potential impacts. Given the stated perspective, therefore, I offer this brief outline of what is to follow:
* The full impact--or potential impact--of retiree-based economic development cannot be fully assessed until the fundamental underlying demographics are understood.
* Not all areas are necessarily equipped to promote the New Growth Industry, and migration decision making processes relating to an area are an important barrier to success.
* The "glitter of gold" commonly associated with retiree-based development may be blinding, to both those who have it and those who want it.
Pattern and Process in Population Aging
At the turn of the century there were 3.1 million persons aged 65 years and over in the United States. This count increased to about 12.4 million by 1950 and 25.5 million by 1980, and the elderly population is now estimated at over 31.8 million.(1) Such dramatic growth in size, however, does not sufficiently constitute population aging. India, for example, has a fairly young population, while simultaneously experiencing explosive growth in elderly numbers during the past century. Its elderly population size currently rests at a level quite similar to that of the United States. The 'age' of an area's population, therefore, pertains to the relative shares of people found in each age group. In this respect, India's older population has fairly consistently represented from two to three percent of the national total, whereas America's older population share has blossomed from a turn-of-the-century value of 4.1 percent to a current figure of close to 13 percent. Similar and more profound increases have been experienced in European countries, including Germany, Norway, and Sweden (with 1992 shares of 15 percent, 16 percent, and 18 percent, respectively). …