I used to think baby boomers who chose to work beyond their full retirement age were stealing all the jobs from my children's Generation Z. But it turns out, I was wrong. It seems when baby boomers work at jobs, they spend more money. That creates more job opportunities for young people.
According to a recent article by Yahoo's The Exchange, older workers aren't crowding out the Generation Y and Z workers. The article cited a paper from the Center for Retirement Research at Boston College which showed no evidence that the trend of older workers reduced job opportunities or the salary of younger workers.
Having a positive impact
Older workers who work have more discretionary income to spend. I know the senior citizens I know on a fixed income rarely spend money on anything other than the bare necessities. According to the paper, a one percent employment rate increase for senior citizens correlated to a 0.21 percent increase for employment of young people. In other words, it's good to keep older folks working so they can remain consumers.
Working out of necessity
Many baby boomers I know work because they want to pay down their credit card debt. Many of them have little or nothing saved for retirement. According to experts, employment of seniors 65 and older was 21 percent higher this year compared to 2008. Some senior citizens believe they will have to keep working until they are 80.
Competing for the choice jobs
For the most part, I don't believe the older generation is competing for the choice jobs. For starters, many of the jobs my sons would want require specific degrees and training. I don't see any senior citizens attending college with my sons for anything other than no-credit enrichment classes.
My own mother worked until she was 70 at a full-time job. I think the idea of working until 80 is somewhat unrealistic for most seniors. Also, the idea of raising the Social Security age again isn't fair since people should be able to take back what they put in.
If getting senior citizens to spend more money is the key to the unemployment problem among young people; then the answer may be to free up more income. Many seniors would benefit if the government eliminated taxes on dividends within retirement accounts such as the traditional IRA and 401(k) plans.
Still, I don't mind encouraging grandma to get back to work if it means creating more jobs for younger people including my children. Work is good for the brain and good for the soul.
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