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Column: Baby boom retirements may be driving economic woes

The impact of the baby boom generation continues to this day.
Tracy Sherlock crop
Tracy Sherlock writes about education, parenting and social issues in her columns at the Richmond News.

The baby boom generation is starting to retire and though it’s rarely mentioned in the news lately, I’m curious what effect this is having on our society.

For instance, inflation is rampant, and experts say a recession is coming, but the job vacancy numbers continue to grow.

Horror stories abound about our healthcare system, including one recently told in the B.C. Legislature about a woman who was told she has six months to live due to cancer, but who cannot get in to see a doctor for three months.

Nobody can find anybody to work — there are staffing shortages everywhere. This was never more apparent than this summer when millions of people decided to travel again as the COVID-19 pandemic waned and chaos ruled the airports.

Speaking of the pandemic, it was certainly a cautionary tale about long-term care. Anybody or considering a long-term care home for an aging relative is bound to think twice after the COVID-19 isolation, illness and deaths happening in our seniors’ residences. However, even now, wait lists for spots in long-term care in Vancouver Coastal Health can be as long as 24 months, which is a long time if you’re aging and you cannot care for yourself.  

All of these phenomena may be linked to the demographic heft of the baby boom generation in one way or another. That massive generation has changed the world since the day it was born, why would the 2020s be any different? Born between the end of the Second World War and about 1960, the baby boomers represent a massive spike in the birth rate, enabled by prosperous economic conditions. It spurred the growth of the suburbs, which in turn spurred even more babies, because people had bigger houses with more bedrooms to fill. It propelled driving culture, because everyone had to commute to get to work.

Schools were packed, spurring construction of new schools, new neighbourhoods and more roads. Of course, that kept the economy growing for quite a while. As the baby boomers became teenagers, cultural changes followed. Popular TV shows, music, styles, the hippie movement, and more were all triggered by this huge generation.

Once they hit the workforce en masse in the 1970s, the economics shifted. By the 1980s, jobs were hard to come by, because they were all filled. Nurses, teachers, police, government – all of those sectors were completely fully stocked with employees by the early 1980s.

This caused other issues, many of which are coming home to roost right now. Consider my high school grad class of 1983, those of us born in 1965 or Generation X. I can only think of one person who went into teaching, one who went into nursing and one who went into carpentry. I can’t think of a single person who became a plumber, an electrician or a welder. There were simply no jobs in those fields, because they were all filled up with baby boomers.

What’s happening now is the baby boomers are starting to retire. The number of births peaked in about 1957 in the U.S. and 1959 in Canada. Those folks are reaching their mid-sixties now. Many of them, and especially those who went into fields like teaching or medicine, were hard hit during the pandemic. If they possibly can, they’re retiring. You won’t find a lot of Gen Xers (born about 1960-1980) in those fields, for reasons mentioned above. Hence, there are massive labour shortages of teachers, nurses, doctors, tradespeople, and on and on.

A recession doesn’t usually come with lots of job vacancies, but it looks like that’s what Canada is about to experience. Many other effects of this demographic wave are also coming, and we are not prepared. For instance, the surge in travel. All of those retirees need something to do and many of them have government pensions and massive profits from selling their homes to finance a lot of travel. This summer’s chaos was just the beginning.

I don’t have a big enough brain to figure out the effects of the baby boomers starting to draw on their pensions and switch their investments from things like stocks and real estate to Registered Retirement Income Funds (RRIFs), but I can guarantee they will be significant. No doubt this explains the federal government’s move to bring in 500,000 newcomers each year to Canada, despite a critical housing shortage.

We can’t rely on the old ways to balance our economy, like simply raising interest rates, because the fundamental conditions have changed. We will have to get creative and it’s going to be interesting.

Tracy Sherlock is a freelance journalist who writes about education and social issues. Read her blog or email her [email protected].