Lost in the discussion of this week’s Congressional Budget Office report (which said 2.5 million fewer Americans would be working because of Obamacare) was its prediction that aging will be a major drag on growth: “Beyond 2017,” said the report, “CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades [due in large part to] slower growth in the labor force because of the aging of the population.”
Economically speaking, winter is nowhere near an end. Spring isn’t due until about 2019, which is when the economy will receive a boost from the spending power of the Echo Baby Boom of the 1980s (which peaked in 1990) and the concurrent wave of immigration. In 2019, these second Baby Boomers will buying their first houses.
The flaw in this notion is the idea that bigger populations always mean more jobs and more prosperity. That equation, which generally held true for millennia, is likely now irretrievably broken. In fact, if the Baby Boom had been a more reasonably-sized generation, America might be in considerably better shape now and going forward than otherwise.
As for aging Americans, medical and bioscience technology will contine to drastically redefine the meanings and implications of that term as well. An example:
People who turned 65 and retired in 1960 tended, on average, to be relatively fragile physically, and they died less than five years later. Now, fifty years later, people live almost fourteen years longer, and vast new industries have arisen that cater to the “senior” demographic, which is healthier, longer-lived, and far wealthier than ever before. In fact, in terms of wealth, seniors are the richest people in America, and industries that cater to them are some of the most profitable around.
The real key will be unlocking more of that purchasing power, and a lot of that will depend on how seniors feel about themselves and their futures. Give everybody another fifty years of healthy life, and you’ll see massive changes in senior social and economic participation – mostly because they won’t be “seniors” any more.