The coming wave of boomer retirees often is discussed in terms of the potential drain on Social Security, but Megan McArdle in The Atlantic (Jan/Feb 2008) says the economy should be able to cope. Funding Medicare, she says, poses a much bigger problem, and there have been few good ideas on how to address it.
The fact that about one in five Americans by 2030 will be retired will change the labor force, the economy and the look of main street, says Ms. McArdle. One-stop retailers such as Wal-Mart will grow at the expense of more specialized local stores. The demand for labor-intensive services such as health care, food preparation and transportation will rise. Growth in both productivity and the labor force will slow.
The U.S. also will have to shift resources from educating children to what some see as the more emotionally difficult work of caring for the elderly. Another great challenge that the U.S. will have to overcome is age discrimination, to ensure that people are kept in the work force longer. Seniors tend to excel in such areas as customer service and management, and it would make sense to tap those skills in more useful places than supermarket aisles. At the same time, workers will have to accept that in later years their wages likely will diminish.
For all the financial dilemmas longevity causes, longevity itself is something to be celebrated. Slowing growth means both workers and retirees still will be somewhat richer than they are now, and they will enjoy that wealth for far longer than their parents' generation.
Source: The Wall Street Journal, January 16, 2008
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