Pew Research Center recently released a study entitled “Baby Boomers: the Gloomiest Generation.” Widespread commentary about this study in op-ed columns and news articles has weighed real and mythic factors that might contribute to a generation suffering its contemporary zeitgeist of dreariness.
Then this week, the Urban Institute released a new study, "Will Employers Want Aging Boomers?"
Because a primary driver of dread is economic insecurity about the future, these studies provide interesting juxtaposition and invite further analysis.
Being part of a large generation has its advantages in the aggregate (including collective impact on mainstream culture and business), but a large generation often penalizes individual members.
Millions of Boomers have not had optimum opportunities to achieve their goals due to numerous socioeconomic factors, including competition for entry-level jobs, corporate downsizing and offshoring of jobs. Generational competition has further limited the number of opportunities for top-paying jobs; only so many positions exist at the C-level; only so many have the right stuff to succeed as entrepreneurs.
Guaranteed retirement benefits (defined benefit plans) have morphed into defined contribution plans, placing retirement assets at risk in stock markets. The recent market downturn has caused many pre-retirees to lose 10% to more than 40% of the value in their retirement portfolios.
While nearly 30% of the generation have college degrees, 70% don’t. This has further limited economic opportunities as the nation has shifted from manufacturing to a knowledge-based economy, beginning in the mid-1980s. College-educated Boomers will have more robust vocational opportunities in the future than do those without post-secondary education.
“After moving into virtually every occupation, women are being afflicted on a large scale by the same troubles as men: downturns, layoffs, outsourcing, stagnant wages or the discouraging prospect of an outright pay cut.
“Indeed, for the first time since the women’s movement came to life, an economic recovery has come and gone, and the percentage of women at work has fallen, not risen, the Bureau of Labor Statistics reports. Each of the seven previous recoveries since 1960 ended with a greater percentage of women at work than when it began.”
Chronic underemployment and accelerating costs of raising children have influenced lower retirement savings rates (with one-third of the generation economically insolvent today), thus diminishing a real sense of independence and economic security.
According the Pew study, around 55% of Boomers believe it’s likely their incomes will not keep up with the cost of living over the next year, compared with 44% of younger Americans and 43% of older generations. This is an anomaly because Boomers are in their peak earning years, with higher median household income than other generations (based on U.S. census data from 2006).
Findings in the Urban Institute study point to some reasons why Boomers can legitimately be concerned about future income shortfall:
“…an increase in global labor supply, which U.S. firms can tap through outsourcing or immigration, will more than make up for any slowdown in the domestic labor force (Cappeli 2005; Freeman 2007). The emergence of China, India, and nations from the former Soviet Union in the world economy may have doubled the supply of workers worldwide. If the expected shortage in prime-age workers does not materialize, employers may face fewer incentives to turn to older workers.”
Not only is global competition a Boomer concern, generational overcrowding may again become an economic factor. According to the Urban Institute study:
“The substantial increase in the share of the workforce over age 55 in the coming years could lead to a glut of older workers despite the overall labor force slowdown (Sapozhnikov and Triest 2007). Too many older workers could result in lower wages and employment rates at older ages.”
Besides, higher income is meaningless for those with higher expenses. Although the Pew researchers found that Boomers are less likely to have been laid off or needed to search for another job during the previous year than younger generations, they are also confronting age-related limitations should these crises appear in the near future. For example, many Boomers face larger mortgages, college education for their children and even subsidies for aging parents.
The Urban Institute offers evidence supporting concerns about the big elephant in the room, age discrimination:
“Although older workers are paid more than younger workers and may be less likely to be laid off, experimental evidence suggests some employers may still discriminate on age in hiring decisions and survey evidence from the 1990s finds they are less likely to train older than younger workers.”
People in their fifties cannot as easily find other jobs after layoffs, as suggested by the Urban Institute:
“Older workers who do lose their jobs experience longer unemployment spells than their younger counterparts. In 2006, 28 percent of unemployed adults ages 55 to 64 were unemployed for at least 27 weeks, compared with just 26 percent of those ages 25 to 34 and 20 percent of those ages 35 to 44 (Bureau of Labor Statistics 2007).”
Millions of Boomers are now experiencing enormous financial and/or psychological burdens due to caretaking. Many in this generation are sandwiched between parents with failing health and adult children who have returned home as "twixters."
Not surprisingly, 76% of the Boomer generation believes it is easier to fall behind than it was ten years ago, and a mind-boggling 86% say it is harder than it used to be to keep up a middle-class lifestyle (versus 77% of younger people and 72% of older).
A deep glumness based on real issues confronts the generation. And some pessimism may be grounded in more ephemeral factors beyond economics.
We live in a youth-centric culture, thanks in part to the influence of Boomers when they were young. Marketers and members of the media communicate hundreds of messages every day that associate aging with loss, decline and lesser social value. This has been a longstanding tradition in this country and now incongruent with demographic reality. It's difficult for members of such a vital and engaged generation to accept being marginalized.
This is a time of enormous cultural and sociological transformation as nearly one in three American adults has passed the threshold of 50. The nation is just beginning to adjust to an unprecedented era when the old outnumber the young, and the pressures fomented by this adaptation are falling squarely on the shoulders of the Boomer generation.
In the short term, these are pretty gloomy realities. And new research is bearing this out.