We Boomers are aging out.

Help Wanted.

Boomers are retiring.

Boomers filled up the elementary schools, then the colleges, then the workforce. Now we are retiring.

For a decade now retired people have increased as a percentage of the population, beginning with the double-effect of Boomers turning 62 and the recession of 2008-10. COVID accelerated this trend. The labor participation rate fell from 63.2 of the civilian working age population to 60.8 with the onset of COVID in the spring of 2020, and is still down, now at 61.6%. That amounts to 4.2 million people who left the labor force below the expected trend line. St. Louis Fed   

There are two trends that bear notice. The first is the blue-line COVID uptick above trend. The second is the 25-year big-picture plateau of about 15.5% of the population being retired, to the abrupt up-slope beginning in 2008. That was us: Boomers retiring. Retirees grew to 18% of the population and now COVID on top of that.

The Boomer boom is exaggerated because the birth rate was below trend during the depression and WW2.  

Again, two things bear notice. One is the bulge and the second is the relentless downtrend in births. The U.S. experienced about 30 births per 1,000 people 100 years ago, and now it is almost exactly 12 births per 1,000. My father, born in 1919 was one of five children, all of whom survived. My mother was also one of five live births, although a sister died in infancy. My grandparents, born in the 1880s, were members of even bigger families, my American grandmother one of 10.

One reason to retire is the simple inevitability of mortality. The white space on the right side of this chart is us, sooner or later.

If a Boomer hadn't yet retired, COVID was a good reason to get out of the line of fire. The disease targeted people our age and older. Companies were laying off and shutting down. And many of us got richer just by staying alive. Real estate and stock prices are up sharply. Maybe we are in a bubble and the wealth gains are transitory. It doesn't change the psychology. Every experience I had as a Financial Advisor for 30 years is that the moment an account statement prints a value, the clients consider that value to be theirs, in-hand, for real and forever and available to spend. Any drop in that value is considered an aberration, a surprise, a kind of theft, and a painful loss. People with assets priced high feel rich. With Zillow and neighborhood house sales confirming their real estate wealth, and their IRA statements confirming their financial wealth, people who were comfortable before feel even better now. The St. Louis Fed said,

By July 2021, households belonging to the 65-74 age cohort experienced an average return of $180,500, the greatest among all cohorts. They were followed closely by households between ages 55 and 64 with $167,000, and households 75 and older with $148,100.

Here it is, charted: 

The text and chart report averages, not the median. The authors note that the averages are strongly affected by "right hand skew," meaning the extraordinary wealth of the top fraction of 1%. Sill, we have all seen stock and home prices go up. Boomers are taking advantage of the situation. Chicago Fed

COVID accelerated a long-term trend of Boomer retirement, and the trend of fewer babies continues. It would have made political sense for the party of traditional families--the GOP--to have sponsored family-friendly policies like tax credits for children, for taxpayer funded day care, and generous parental leave programs. However, the GOP defined those as giveaways to the lazy--for Democratic "takers"--so they oppose them. We are outsourcing baby-making to immigrants, especially Latin Americans, but GOP politicians define that as a Democratic effort to create future Democratic voters and dilute the all-American bloodline. We outsource manufacturing to low-wage countries, and that, too creates controversy. Artificial Intelligence technology will continue to automate jobs, but leaders of both parties see Big Tech as a menace.

Our population is changing. We have a worker shortage. How we deal with this will shape the political issues of the next decades. If America gets through our current problems there will be no shortage of new ones for future generations. We are creating them now.