Persons born during the 1946-1964 time span
became known as the “baby boomers” as postwar family formation returned to
normal after the economic depression of the 30s and the belligerencies of the
early 40s. This year the first of the baby boomers turn 64 and the last of them
turn 46. The demographic consequences of this phenomenon are significant. The
older boomers are finishing up their careers, commencing retirement and
experiencing the joys of becoming grandparents. The younger boomers are mostly
married, at the peak of their careers, spending dearly for their children’s
higher education, and the mothers have bid farewell to the possibility of more
children.

The aging of baby boomers will provide
expanded markets for travel and leisure activities as a growing number of
retirees will want to enjoy their senior years and this will boost the tourism
sector. (One tour guide in the city of Berlin was heard to remark recently that
the average age of his clients was 75!)

Though this generation benefitted from
advances in medical procedures and pharmaceutical wonders, some will succumb to
debilitating maladies that require personal assistance by health care workers,
assisted living housing, hospice care – and ultimately undertakers! The soon to
be rising number of persons over 65 starting next year will make gerontology a
growth area in medicine.

In the United States and other developed
countries the “official” retirement age has been creeping up as government
pension systems focus on possible funding shortfalls in the not too distant
future.

Population experts predict that by 2020
some 20 percent of the US population will be 65 or older, rising to 25 percent
in 2030. The rise in longevity – a sign of success stemming from improved diet,
medicine and hygiene – has also created a situation where “younger” senior
citizens are caring for “older” seniors; septuagenarians caring for
nonagenarians as “le
quatriéme âge” (fourth age), as the French would say, blossoms.

Diehards who managed to avoid downsizing
may choose to keep working, at least on a part time basis while the more highly
educated boomers may retire then volunteer their expertise in the nonprofit
sector. Given that they are much better educated than previous generations and
likely to live longer, some boomers may keep working beyond retirement age for
economic reasons while others, mostly professionals, will keep employing their
wisdom in the marketplace. After all, boomers were the ones who coined the
phrase: “Do what you love and you will never work a day in your life!” This
attitude has acquired new relevance: The United States – despite near 10
percent unemployment – is starting to experience labor shortages.

One day this March the Financial Times
carried three articles on different pages that referred to the need for
properly trained manpower in manufacturing and other activities. As boomers
leave the work force, industry is starting to miss them. Many have key skills
needed in manufacturing that cannot be filled by poorly educated immigrants
lacking math and tech proficiency. Constraints on industrial expansion for lack
of qualified human capital cannot be far behind.

As the first of the baby boomers entered
adulthood in the mid 1960s, the timing coincided with the introduction of
pharmaceuticals to control the reproductive process followed by the Supreme
Court decision “legalizing” the termination of life at the source. The result
was a decline in fertility that has stopped at replacement level but
nonetheless narrowed the current labor pool.

Since the baby boomers entered the labor
force in the mid 1960s, the American economy experienced a great deal of
economic expansion and progress. There were a number of boom years with sizable
increases in real economic growth. Between 1965 and 2009, the US nominal GDP
increased 20-fold to $14.3 trillion.

When the first baby boomers reached age 62
in 2008 and became eligible for early retirement, the timing coincided with the
start of “the great recession” with real GDP dropping 2.4 percent the following
year, the largest annual decline in the postwar era.

Is this a harbinger of things to come? As
the need for human capital becomes more acute in the years ahead, besides
bidding adieu to baby boomers perhaps we will also have to say: “bye-bye boom.”

Vincenzina Santoro is an international economist and
represents the American Family Association of New York at the United Nations.