The Baby Boomer Effect

The Baby Boomer generation represents those born between 1946-1964. When the post-World War II baby boom ended in 1964, the babies born during that period represented 40% of the total population of the United States. For many years, this generation represented the largest segment of the American population. Since the oldest of this generation is now 78 years old, and because some of them have died already, they are no longer the largest generation. However, throughout their lifetimes, they have had a powerful economic influence on our nation.

The baby boom years created many job opportunities for teachers and medical personnel. As a matter of fact, radio public service announcements in the 1940s and 1950s (and later television) encouraged college-age kids to consider teaching and medical careers to service all the children who needed schools and medical care. Most communities pushed hard to build more and bigger schools. Boomer parents are largely responsible for the massive growth of the suburbs during those years.

Consider the automotive industry. In 1964, when the oldest of this generation turned 18, Ford introduced the Mustang, an instant hit. Throughout the rest of the 1960s and into the early 1970s, sports cars continued to sell well as the younger Baby Boomers bought cars, as well. Then, in the 1980s and 90s, minivans and four-door sedans became the best-selling vehicles as Boomers began to have families. Now, as this enormous segment of the population ages, SUVs (much easier for older people to get into) have exploded in popularity.

Many economists have predicted what the aging of the Baby Boomers will mean for the economy. Some suggest drastically reduced consumer spending. On the other hand, since this generation has never followed the traditions of previous generations, will they slow their spending? Since Boomers are more concerned about their appearance than previous generations, will they just shift their spending to areas that help preserve youthfulness? Only time will tell.

We continue to feel the effects of this generation as they retire in great numbers. The Federal Reserve is doing what it can to tame inflation, but retiring Boomers have left more job openings than available workers. There are not enough younger people to fill their positions. Sometimes, younger people are blamed for the problem, accused of not wanting to work. While this may be true in part, a greater problem is replacing all the retiring Boomers. When there are more jobs than people, wages go up and contribute to rising inflation.

But don’t worry. A solution may rest just over the horizon as Artificial Intelligence (AI) gradually begins to fill the vacant positions left by Boomers in the next decade.

Listen to the column here: ONE Magazine | Brown on Green The Baby Boomer Effect