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Old 08-26-2010, 11:42 PM
 
Location: Charlotte, NC (in my mind)
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One thing that I no longer ever hear mentioned is the impending retirement of the baby boomers. By the late 2010s, millions of baby boomers will be approaching retirement age while at the same time the Milliennial generation will be entering their prime working age. Could this be what the economy needs? It seems as the baby boomers retire, more and more jobs will open up for younger generations to fill thus finally bringing down unemployment. I have even seen some websites predict labor shortages...i.e. unemployment well below 5% when this happens. Being that as of now, the main factor preventing economic recovery is the high unemployment rate, could it be that the generational shift from baby boomers to millennials/Generation X will end the recession/depression? I also would think a housing recovery may be possible as millennials who as of 2010 are by and large still living with their parents or in a college dorm will enter the housing market by 2019. Is this something to be optimistic about or will it cause unprecedented economic hardship? Thoughs?

Last edited by bchris02; 08-26-2010 at 11:59 PM..
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Old 08-27-2010, 01:04 AM
 
Location: Los Angeles, Ca
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I think the underlying economy is still busted.

It's analogous, to perhaps a transfer of labor on a small island. The island elders are "retiring", allowing younger workers to fill the roles. But the island itself is sinking.

The recession/depression here in the US is more structural. It's an accumulation of problems that have built up after WWII. Recessions in the 80's and 90's got smoothed out. Problems got pushed forward. The US after WWII is like a dam that has accumulated more and more small cracks and problems.

I don't think baby boomers are really going to "retire". A lot of "Retirement" (the concept of it), is slick marketing from stock brokerage companies, mutual funds. Look at the retirement and money gurus of the last 10-15 years, guys like david bach, "money experts" on oprah.

They all sort of assume..."Well if you save X, at 10% a year, in 30 years you'll be a millionaire." But how many people get that compounded 8 or 9% a year for 20 or 30 years? Less than you realize. Or if you just cut out that $5 latte, in 20 years, times 846 days, that's X dollars. Many retirement assumptions were as unrealistic as the Nasdaq in the mid to late 90's.

I think we're living in a very illusory "economy". Working seniors now outnumber teens in the labor force,

Working seniors outnumber teens in labor force - SFGate

I think that chart shows how weak the real economy has been since the 90's. If we had so much prosperity in the 90's, why did more seniors have to go to work?

I think its going to be every man for himself in the next 10-15 years. Milliennials are going to have to pay down debt before they can really build something financially.
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Old 08-27-2010, 01:09 AM
 
Location: southern california
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the productivity of the baby boomers and their work ethic will be noticed when they leave.
as ross perot used to say, "the giant sucking sound".
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Old 08-27-2010, 06:46 AM
 
Location: Overland Park, KS
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Quote:
Originally Posted by Huckleberry3911948 View Post
the productivity of the baby boomers and their work ethic will be noticed when they leave.
as ross perot used to say, "the giant sucking sound".
How true...I'm 33 and have worked in a professional office enviroment for the past 15 years. It's crazy how times have changed with tolerance of work hours, personal phone calls on cell phones throughout the day, etc....It's going down and fast.
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Old 08-27-2010, 08:44 AM
 
Location: Ohio
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Quote:
Originally Posted by bchris02 View Post
One thing that I no longer ever hear mentioned is the impending retirement of the baby boomers. By the late 2010s, millions of baby boomers will be approaching retirement age while at the same time the Milliennial generation will be entering their prime working age. Could this be what the economy needs?
I don't believe so, because the evidence doesn't support it. The Boomers hold a vast amount of wealth (80% of all the wealth in the US is concentrated in the hands of 20% of the population and the overwhelming vast majority are age 55 and older) and they are the ones who are basically driving the economy through their spending and when their spending cuts back as they retire...so it goes.

Also the wages aren't there and if you compare that with inflation it just doesn't work.

In 1980, I had an entry level job as a sound engineer with a local independent TV station earning $5.00 per hour. One paycheck paid my rent and utilities and auto insurance and the other 3 paychecks each month were disposable income.

An entry level job today pays $8.50 to $10 per hour and even at $10 per hour it takes 2 paychecks to cover the cost of rent, utilities and auto insurance (and don't forget in 1980 $10 -- or two hours of work -- paid for 2 tickets to the cinema show, a tank full of gasoline and something to eat after the movie -- the cost of two movie tickets now is over $20).
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Old 08-27-2010, 08:51 AM
 
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Theres alot more wealth created by the baby boomers then ever before .
alot of it will be passed to baby boomer kids where it will be spent or invested....

this can be a big positive for things no one thinks about.
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Old 08-27-2010, 08:57 AM
 
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Originally Posted by mathjak107 View Post
Theres alot more wealth created by the baby boomers then ever before .
alot of it will be passed to baby boomer kids where it will be spent or invested....

this can be a big positive for things no one thinks about.

this "wealth" is mostly locked up in housing.

housing is illiquid even in boom times, and these days its illiquidity is staggering.

that is to say, in order to convert that so called "wealth" into actual cash, the millenials need to step up and buy $200,000-$400,000 homes from the boomers, using their meager $30k-$60k incomes, excluding the ~20% or so of the generation that is unemployed.

I mean hell, I can put my coffee cup on ebay for $10,000, but that doesn't make it "wealth". But, but, it has utility, everybody needs a coffee cup to drink from.. they aren't making new coffee cups.. blah blah blah...


Some argue that the same dynamics are at work in the stock market, that boomers transitioning into bonds will reduce the demand for stocks, and that the millenials don't have the income to pick up the slack, so prices are "doomed to fall." I don't know if I agree with this.
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Old 08-27-2010, 09:18 AM
 
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theres alot of baby boomer investment money out there... and thats not counting houses... i forgot the percentage of money just fidelity had just in their possession for baby boomer age folks and it was staggering.... there is also quite alot of emerging markets also with wealth beyond anything they ever had that can take up the slack by loosing the baby boomers.

demand for goods,services and investments from all these nations that never had money before will be enourmous eventually.

all the speculation about the negative effects from loosing the boomers reminds me of all the specualation we had about how disasterous a gm bankruptsey would have on every aspect of life in america. it turned out to be very different from what everyone spewed about what would happen if they failed.
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Old 08-27-2010, 09:22 AM
 
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Quote:
Originally Posted by mathjak107 View Post
theres alot of baby boomer investment money out there... and thats not counting houses... i forgot the percentage of money just fidelity had just in their possession for baby boomer age folks and it was staggering....

there is also quite alot of emerging markets also with wealth beyond anything they ever had that can take up the slack by loosing the baby boomers

interesting that you suggest boomers would prefer to sell their assets to foreigners, rather than pricing them at a level their children could afford, keeping the ownership American. That's boomer economics in a nutshell.

there's no question that american boomers own a huge and disproportionate amount of wealth in dollars. My point is to look at what exactly constitutes that "wealth", and depending on how it is invested, how it will remain stable in the coming decades, and how quickly it can disappear (like we've seen recently). "Wealth" is not some tangible thing. "Wealth" is more like an ownership share of the earth's resources. If boomers own raw iron ore, that's one thing... but by and large they own stocks (whose values depend on many things), bonds (whose values depend on demand for the dollar), and houses (whose values depend heavily on millenials producing and earning in the future).

Last edited by le roi; 08-27-2010 at 09:31 AM..
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Old 08-27-2010, 09:39 AM
 
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i didnt say boomers would sell their homes to foreigners, i said that foreigners would have the money to invest here in our markets or buy goods and services from us.

if your concerned that the companies of the world that make up our markets wont have much value as stocks then you got a lot more to worry about then aging baby boomers

Last edited by mathjak107; 08-27-2010 at 09:58 AM..
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