With Baby Boomers Retiring, Why Do We Need So Many New Jobs?

Ask the Expert: Since large numbers of baby boomers are now retiring, wouldn't this have a complete offsetting effect for the next 15 years or so?

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Question: The monthly job reports are usually accompanied by a statement that we need lots of new jobs just to keep up with population growth. Since large numbers of baby boomers are now retiring, however, wouldn’t this have a complete offsetting effect for the next 15 years or so? Submitted by JohnnyOh

Answer: There are basically three variables that will determine the growth of the labor force: The fertility rate, the participation rate (how many people of working age want to work), and the rate of immigration. You are right that the aging of the baby-boom generation, coupled with declining fertility rates, has had a significant affect on the growth rate of the labor force. A report from the Labor Department last year predicted that the growth of the labor force will slow by 7% between the years 2010 and 2020 compared to the previous decade.

That being said, we still have a growing population and a growing workforce. The third factor — immigration — has remained fairly steady, while the fertility rate — though declining — remains strong compared to other developed nations. That’s why we need somewhere between 80,000 and 120,000 jobs per month just to keep up with population growth, and that will probably continue to be the case for the next ten years.

But this is a good thing! When you hear that we need X number of jobs per month to keep up with population growth, it might give the impression that population growth is a burden to the economy — that if we could only slow the growth of the labor force we could solve our unemployment problems. But in fact the opposite is true: Steady population growth is a good thing for the economy. New entrants to the workforce don’t just supply labor, they also demand it. All these new young people and immigrants who are now joining the labor force need things like clothes to wear, cars to commute to work, and homes to live in. And this demand creates jobs. Furthermore, a growing population allows us to support our ever-growing elderly population.

In other words, it’s not the size of the labor force that’s the problem, but the lack of jobs.

The worlds of business and economics can be confusing to those who don’t speak the language. So TIME.com is launching a new series that tries to break down that barrier. You ask the questions, and we will answer the ones that are the most timely and likely to be of broad interest. Ask your questions in the comments section of this article, or write to us at asktheexpert@time.com.

7 comments
nancy1
nancy1

What's the MOST COMICAL is there are MORE GEN Y than BOOMERS. When will the self-righteous younger gen WAKE UP and realize they are MORE of a problem than the boomers??? Also, GEN X is hitting FIFTY now. They have been voting for THIRTY-TWO years now and are BIG KIDS. You can't in ANY WAY blame all the MUCK on boomers. Especially with the likes of LBJ and his GREAT SOCIETY while we were just YOUNGSTERS. It's NOT our fault PROGRESSIVE LIBERALS.

arq
arq

So if the lack of jobs is the problem, then wont the size of the labor force become a problem too? A problem that could lead to mass unemployment, and civil unrest.

futuresense
futuresense

Are boomers really retiring?  With the demise of the defined benefit plan, the great recession of 2007 and people living longer (and hopefully healthier), many boomers are contemplating the question -- why and how can I retire?  This perfect storm combined with an upcoming cataclysmic shift in the type of worker required -- more just-in-time, temporary, on demand workers -- will cause people in the next 20 years to rethink the answer to the question -- what is work?   The workforce will be from 18-80.... and it will not look like what we have known in the past.  More dialogue is needed to get into this highly complex issue.   

bellaluna30
bellaluna30

You forgot to mention that since many employers are hiring workers as "temps" or "part time," many people need more than one job to barely survive.

jdyer2
jdyer2

Wouldn't life be just wonderful if we could just continue to grow forever.... but we can't.  We're running out of water in the southwest.  The midwest aquifer is depleting.  Salt water is creeping into the Florida aquifer.   Farmings are losing bidding wars to frackers over water rights.  When does it end?  When do we as a society ask how crowded do we want to get?   Perpetual growth is nothing more than a ponzi scheme. 

HonokVanhol
HonokVanhol

@nancy1 Well, we can always say that babyboomers parented those kids. Boomers were parented by PTSD-struck parents from WW2.