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Feature                                                      Pages 25-29

 

Aging:
Demography and Destiny in a Nation that's Growing Older

BY DAVID PEARCE SNYDER

French statistician Auguste Comte first made the prescient observation that “demography is destiny” back in 1854. But it wasn’t until the 1950s that planners and policymakers began to appreciate the full implications of Comte’s insight.

The sheer size of the post-World War II age-cohort inspired hundreds of studies and thousands of published papers and popular articles, forecasting (or speculating on) the long-term socioeconomic consequences of the baby boom. The professional field of futures research emerged during the 1950s and ’60s largely as a result of the widespread interest in the potential future impact of 78 million new young Americans.

Today, of course, we know exactly what the effects have been. Most of today’s hospitals were built originally to accommodate the birth of the boomers. Similarly, most of today’s schools, both K-12 and postsecondary, were built to educate the baby boomers.

Most substantially, the suburbs, where three-fourths of all Americans live today, were constructed initially for baby boom households and, later, for the boomers’ own families. Throughout their lives, the baby boom generation has powerfully shaped our communities and the major institutions of our society. And they will continue to do so for the foreseeable future.

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Futurist David Pearce Snyder says demographers believe the impending mass departure of baby boomers from the labor force will leave too many job vacancies to fill.

Labor Pool Drain

In 2011, the first boomers reached age 65, and today 10,000 people per day are turning 65. By the end of 2015, over-65 year-olds will become the largest age group in the U.S. adult population. By 2020, one of five American adults will be over 65, and by 2025, it will be one of four. Because those over 65 consume more than two-thirds of all health services and products, our aging demographics will have a major impact on the destiny of our largest industry — health care. The Congressional Budget Office currently forecasts that health care, now 17 percent of U.S. gross domestic product, will constitute 20 percent of GDP by 2020 and 25 percent before 2030.

Of course, as the over-65 population spends more time in hospitals and doctors’ offices, they also will be spending less time at work. The average age at retirement has risen steadily over the past decade and now is around 66. It is likely, therefore, the baby boomers soon will begin to drain out of the labor pool. The U.S. Bureau of Labor Statistics projects that 34 million workers will retire during the current decade (2010-2020), at the same time that the economy will be creating more than 20 million new jobs. In total, the nation’s employers will have to fill 54 million vacancies during those 10 years.

Demographers have been warning for years that projected U.S. labor force growth will be insufficient to fill the vacancies created by the retirement of the baby boomers. In fact, as the over-65 share of our adult population grows by 50 percent between 2010 and 2020, the size of the entry-level labor pool — those 16 to 24 years of age — actually is projected to shrink by more than 12 percent, from 21 million to 18 million, effectively accelerating the aging of our workforce. Our dwindling supply of new entry-level workers will clearly fall short of the projected 54 million job vacancies.

To cope with this implicit 36 million worker shortfall, employers have a number of strategic options for reducing their labor requirements, including off-shoring, automation and/or work process redesign.

Changing Job Content

To the degree they are unable to reduce their human resource requirements, employers will have to compete for workers in an increasingly tight labor market. Labor economists widely expect the increased competition for employees to sustain a broad, long-term rise in wages as the decade progresses.

This demography-driven labor shortage would appear to portend good news for the 20+ million unemployed and underemployed U.S. workers. But comparisons of the skills and aptitudes possessed by the unemployed or underemployed versus the skills/aptitudes required by the 5 million chronically unfilled U.S. job vacancies suggests significant mismatches exist that will require the re-skilling or up-skilling of millions of adults.

Clearly, the great majority of U.S. job openings during the next 10 years will have to be filled by people who are out of school already and in the job market. As the “wave of creative destruction” caused by rapidly maturing information technology rolls across the American economy, it is changing job content dramatically throughout the workplace, requiring the nation to re-tool its adult human capital en masse. No single institution is responsible for such a task, but real-world trends show the marketplace economy is responding to our changing demographic and technologic circumstances in a variety of ways:

A growing number of corporations are expanding their commitments to employee training and development, after decades of declining investment in their human resources.

Community and technical colleges are promoting new career education curricula with entrepreneurial zeal, including competency-based, online degree programs.

For-profit schools using sophisticated marketing techniques are capturing large numbers of career ed students.

In growing numbers of communities, civic, business, labor and education leaders are collaborating to create new job training programs designed to provide local unemployed or underemployed adults with the specific skills required by chronically unfilled local vacancies.

Schooling Impact

All of the foregoing workplace realities, driven largely by underlying workforce demographics, apply to all public, private and nonprofit enterprises. But they apply doubly to established educational institutions.

Traditional schooling, a labor-intensive process, will be especially challenged by the baby boomer retirements, the general shortage of workers and the resulting wage inflation. Unable to off-shore their operations, there will be growing incentives for educators to use capital goods, particularly infocom technology, to replace increasingly scarce, expensive labor at all levels of schooling.

Demographic realities will have other fundamental effects on the destiny of educational institutions. The shrinkage of the young adult population (16- to 24-year-olds) is already reducing the size of traditional postsecondary markets. To compensate for that decline, colleges and universities are recruiting adult career learners and the burgeoning retiree population, 5 to 10 percent of whom elect to go back to school and 25 to 30 percent of whom re-enter the work force.

Meanwhile, the sharp decline in U.S. birthrates following the Great Recession has already begun to show up in declining K-12 enrollments. As public school systems consolidate in the face of shrinking student populations, empty K-12 facilities will need to be repurposed for use by growing numbers of adults learning new workplace skills from local community colleges.

Demographic developments turn up in the daily news with increasing frequency. Recently, the Chinese government announced that the relaxation of its longstanding one-child-per-couple family planning policy had achieved the desired result of reducing the disproportionately large numbers of males born in China, which had proven to be socially disruptive.

Earlier this year, the U.S. Census Bureau predicted by 2042, “Euro-descended” (white) citizens for the first time will comprise fewer than 50 percent of the American population. Of course, more than a third of U.S. public schools already live with that reality today. And in mid-August, the U.S. Department of Education announced that public school enrollment nationwide would reflect a minority majority beginning with the current fall’s entering class.

In demographics, as in so many things, education anticipates the destiny of the nation.

David Pearce Snyder is a contributing editor of The Futurist and consulting futurist with the Snyder Family Enterprise in Bethesda, Md. E-mail: david_snyder@verizon.net

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