Issues arising out of the retirement of the baby boomers and solutions
The baby boomers are retiring in very large numbers from the workforce leaving behind a large gap to be filled. The impact will be on the size of the overall population and the workforce. Their retirement will give rise to vacancies but simultaneously it will create a shortage of skilled professionals. A large part of these baby boomers are highly skilled professionals whom the companies are trying to retain for longer. This will certainly have an impact on productivity. So, the government will need to focus on both sides of the picture. It must focus on addressing the shortage and also on creating policies that can retain them for longer. Particularly attention has to be on the retention of the baby boomers. It is because several benefits can be derived from the retention of the baby boomers. The pressure will be both on the government and the industry. Labor force shortage that can result from the retirement of the baby boomers can take the form of nationwide crisis. To avoid it, the government must develop a new vision and new sets of policies that may address the situation.
As per a 2010 Census Bureau report, the burden resulting from the retirement of the baby boomers might rise till 2030 but it will ease after that. However, this trend had been projected right when the baby boomer generation was born. Dependency ratio is the metric used to measure the burden from aging. It is the ratio between the number of dependents and the working population. The dependents include the people aged 0 to 14 and those 65 and above. This ratio is called the total dependency ratio. It has been projected to climb from 22 in 2010 to 35 by 2030. Again somewhere around 2030 the rise will start moderating. As per the projections the ratio might worsen a bit between 2030 and 50 by the time the Baby boomers will reach their old age. The government must soon begin policy reforms in order to meet the challenges that are going to arise from the retirement of the baby boomers. The government would have to consider some important points in this regard:
- A practicable financial system for long term care of the baby boomers.
- Constructing an affordable community based delivery system.
- Reducing dependency ratio and disability rates by investing in health of the aged.
- Focusing again on establishing a family culture in US.
Sources: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1464018/ https://blogs.wsj.com/economics/2010/05/20/dependency-ratio-set-to-spike-as-baby-boomers-age/