Through the recent decade, economists and policy makers have warned of an imminent skills shortage as the aging baby boomer generation nears retirement. This abrupt transition was expected to place strain on labour markets and consequently, to disaffect the economy.
“This is not the case” explains Dr. David Foot, co-author of the best-selling book Boom, Bust & Echo: How to Profit from the Coming Demographic Shift. In an interview at the Hamilton Economic Summit, Foot described how the majority of Boomers will not be reaching the average retirement until well beyond 2015.
The post-war boomer generation, born between 1947 and 1966 are currently between 65 and 46 years old. At an average retirement age of 62, the early boomers would have begun retiring in 2009, and the remainder of the generation will retire over the next 20 years.
Dr. Foot explains that Boomers are likely to work longer into their life, postponing retirement into later years. Improved medical technologies have extended average lifespan by two years every decade, resulting in a likely increase to the average retirement age.
Additional converging factors are further increasing the expected retirement age. The 2008 financial crisis has significantly dissolved the value of pension portfolios and retirement investments. Despite a rebound, Canadian and U.S. markets have only recently managed to flirt with pre-recession levels.
This combination of social and financial factors will likely delay the retirement age for many Boomers.This has a number of implications for the children of the Boomers— the Echo generation.
The oldest Echoes are now in their late 20s and early 30s and steadily climbing through the ranks of their profession. Those in the middle range of this generation are entering the workforce or nearing completion of college or university. Many in this range are finding it tough to start their careers and find meaningful work.
“It’s always been difficult to get your first job” explains Dr. Foot. With Boomers now expected to work later into life, there will be fewer positions freed up lower in the ranks than originally expected. It will not be until later in the decade that the bulk of the Boomers drift into retirement.
What does Dr. Foot recommend for the Echo generation entering the workforce in the meantime? “Build up your resume, whether it’s internships or volunteering… and make sure to build your networks—that’s how you get introduced to opportunities that come along.”