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Trends in job demands among older workers, 1992�02
Richard W. Johnson
The aging of the population raises concerns about the Nation抯 ability to support future retirees, whose numbers will soar once members of the "baby-boom" cohort begin reaching old age in coming years. If current employment patterns persist, there will be fewer workers in the future available to produce goods and services, threatening standards of living for Americans of all ages. As long as job demands do not force many older workers into retirement, increasing employment among older adults could relieve these demographic pressures. This article explores the ability of the labor force to accommodate older adults by examining recent trends in job demands among older workers.
Once the oldest baby-boomers reach age 65 in 2011, the population will begin to age rapidly. The U.S. Census Bureau predicts that between 2000 and 2040, the number of Americans ages 65 and older will more than double, to 77 million, while the number of prime working-age adults, between the ages of 25 and 54, will increase by only 12 percent.1 As a result, the number of prime working-age adults per elderly American will fall over the next 40 years from 3.5 to 1.8. The number of dependent children will also grow relatively rapidly over the next 40 years, compounding the pressures on working adults. In 2040, the number of Americans under 18 and ages 65 and older, who have been less likely to work, will exceed the number of prime working-age adults by 21 percent. In 2000, by contrast, prime working-age adults outnumbered dependent children and elderly adults by 14 percent.
The growing imbalance between working age adults and elderly persons is reducing the number of workers who can finance retirement benefits for older Americans. Both Social Security and Medicare are funded primarily on a pay-as-you-go basis, with payroll taxes on workers financing benefits received by retirees. According to the latest official projections, outlays will begin to exceed revenues for Medicare in 2011 and for Social Security in 2018.2 More fundamentally, the aging of the population reduces the number of workers available to produce the goods and services that the economy needs. Without dramatic increases in productivity or changes in employment patterns, the looming worker shortage will reduce per-capita output and lower living standards.3
This excerpt is from an article published in the July 2004 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1
See U.S. Census Bureau, U.S. Summary: 2000, on the Internet at http://www.census.gov/prod/2002pubs/c2kprof00-us.pdf
(visited June 15, 2004); and U.S. Census Bureau, Projections of the Total
Resident Population by 5-Year Age Groups and Sex with Special Age Categories:
Middle Series, 2025 to 2045," on the Internet at http://www.census.gov/population/projections/nation/summary/np-t3-f.pdf
(visited June 15, 2004).
2 Board of Trustees, OASDI, 2004 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds (Washington, DC, OASDI Board of Trustees, 2004); and Board of Trustees, Medicare, 2004 Annual Report of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (Washington, DC, Medicare Board of Trustees, 2004).
3 Henry J. Aaron, Barry P. Bosworth, and Gary Burtless, Can America Afford to Grow Old? Paying for Social Security (Washington, DC, Brookings Institution Press, 1989).
None
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