Interesting, but I am not connecting the dots. What is exactly the cause/effect with this demographic shift?
I see a huge factor being the part time work syndrome. Most corporate executives try to minimize regular full time jobs with benefits, like were so plentiful in the old days. Much of the population rebels and says I would rather stay home, even if it means going on Medicaid, mooching off family, etc.
Cause: world war 2 ends, soldiers return home and people breed like rabbits to create the largest population burst in a short time span.
Effect: such a large group creates large impacts economically in a short time span.
Baby boomer era is 1946-1964 which gives an age range of 57-75. Retirement age let’s say is 65 which gives us another 8yrs until that generation has left the workforce.
There are 42M boomers left in working age of which approx 65% are in the participation rate. This means 27.3M people will be leaving jobs which open up for young people which is a bubbled number higher than what we would see on a flat trend. So we do get some extra capacity to absorb workers.
A good example is teachers. Teachers are generally old yeah? Stereotypical old person as a teacher in tv shows and movies. Ok so what are we suffering from now? A teacher shortage. This has come about because boomer teachers sat in their jobs for decades which caused a lack of job opportunities for young people wanting to be teachers. As a result, less young people trained to be teachers.
We then hit a time period with a consistent drain of teachers as they began to retire and take their pensions. With no young people trained, we find ourselves in a shortage and begin loading up the current young teachers who are getting the shits.
We entered a phase where boomers who had a stranglehold on industry jobs, retire and we have no trained people to take over which creates shortages and upward pressure on wages.
At the same time we have automation going at a fast past. In the immediate term we can absorb things but when mass layoffs begin from other areas, it provides labour for those places in shortage but people will require re-skilling.
Yes the child rebates and stuff play a part but that is policy to help consumer spending and sentiment, not for employment purposes. It just exacerbated the shortages of the demographic shift.
Hence QT and rate rises are ok. The Fed is looking at employment as the headroom to combat inflation. Most think rates won’t/can’t rise but if you use employment as your marker it’s easy to argue full employment is causing wage inflation pressure which makes your CPI worse……. Hence, they are ok to burn jobs in order to derisk wage inflation and prevent further CPI increases.
Does that make sense?
