America’s aging population is reshaping the workforce, with far-reaching economic consequences.
Population pyramids in China, India and the US
The ranks of retirees are growing much faster today than the number of new workers, ushering in an unprecedented graying of America that will reshape our workforce and economy.
For the past 50 years, the baby-boomer generation, born between 1946 and 1964, have worked through the American labor force like a big meal inside an anaconda. As they age, the workforce is becoming older than ever. As they retire, they’ll push the worker-to-retiree ratio lower than ever.
The boomers’ exit from the workforce has been cushioned by a shift toward working later in life. More Americans are working into their 60s and 70s because of longer life spans, financial incentives to retire later, and the need to make ends meet. The trend was reversed briefly in the covid-19 pandemic, but that wave of early retirees has largely returned to work.
As a result, the workforce itself is now older than ever. In 1984, people under 40 made up more than 60 percent of the workforce. That’s fallen to 45 percent today. Over that same period, workers over 60 have become twice as common.
The growing numbers of retirees create a heightened demand for health-care services. The industry is expected to create more jobs than any other over this decade. But care shortages already exist and are likely to get worse as the number of people needing care increases and the number of available caregivers stagnates or shrinks.
Preparing for a grayer future will require lawmakers to come to agreements on contentious issues like immigration and entitlement programs that have been at a standstill in Congress for years.
More immigrants would fill out the ranks of working-age Americans and slow the nation’s aging. Immigrants are younger than Americans on average and already the main contributor to the country’s population growth.
Greater immigration also leads to better outcomes for people who rely on long-term care, according to research from the Cato Institute and the National Bureau of Economic Research. But the last major immigration bill was passed in 1986, and the issue appears to be at a point of political stasis.