Our view: Holding off on retirement could help economy
Look back just one year to Labor Day 2007. Unemployment had reached record lows. Employers – especially in the hospitality trades – couldn’t find enough workers.
A year ago, economists worried that baby boomers – the first one turned 62 on Jan. 1 – would take early retirement in large numbers because their 401(k)s were pumped up with boom-time money. Too many retirements and the nationwide labor shortages would grow even more dire.
But a year ago, quoted in another Labor Day editorial about low unemployment, Eastern Washington University economist Grant Forsyth pointed out that things can change in a hurry. How right he was.
For instance, last year’s worry that labor shortages would grow even worse as boomers retired early seems mitigated by evidence that boomers plan to work longer. People retire early when they feel confident that they can afford their pre-retirement lifestyles. Confidence is low right now.
A Pew Research Center survey showed that boomers are more downbeat about their financial health than the generations above and below them.
“They also are more likely to worry that their incomes won’t keep up with inflation – this despite the fact that boomers enjoy the highest incomes of any age group,” the survey reported. The survey did point out, however, that boomers traditionally have been gloomy about work, finances and life, even in the good times.
“When it comes to quality-of-life assessments, data suggest the boomers generally have been downbeat, compared with other age groups, for the past two decades – starting back when some were still in their twenties.”
It is anticipated that many boomers of early retirement age will remain in the labor market through the economic downturn, and this is a good trend.
Doug Tweedy, regional economist for the Washington State Employment Security Department, said a lot of Spokane-area employees are in their late 40s and early 50s. In some occupations, these boomers need to remain in place for a decade or longer because there aren’t enough younger workers in the pipeline to assume their jobs. This is especially true in the skilled trades, such as machinists. And it’s essential in health care. As the population ages, the need will skyrocket for nurses, doctors and health care workers of all kinds.
“What will save us is if the boomers decide to hang on,” Tweedy said. “They need to hang on.”
Economic predictions, though grounded in statistics and research, can sometimes take on a soap opera feel. So much hinges on surprising plot twists. Will technology solve some of the labor worries in the trades? Will educated and non-educated immigrants fill some of those essential health care jobs? Will boomers jump-start the economy when they finally retire and spend those retirement savings?
On Labor Day 2008, many generations – not just boomers – are feeling gloomy about the country’s economic condition. But a lot can change in just one year. Hang