America's Aging Baby Boomers, Forced To Work Until Death, Blamed For Collapsing US Productivity

Tyler Durden's picture

The graying of America's workforce will come as no surprise to regular readers. Just earlier this month, we wrote that in a little noticed aspect of the "stellar" June jobs report, the vast majority - or 90% of all new jobs - went to workers 55 and older.


Hardly an outlier, this was the latest confirmation of a very troubling trend: all jobs created since the recession started in December 2007 have gone to workers 55 and older.


In fact, in the latest month, there was a record 34.5 million workers in this age group: the only one that has seen persistent growth this century (and with the concurrent surge in waiters and bartender jobs in recent years, we even have a sense of what they are doing).


We won't go into the reasons for this dramatic divergence (we have covered it extensively in the past); instead we bring up these observations because according to a new NBER paper, this stunning trend is what is being used to scapegoat the accelerating collapse in US productivity. As Bloomberg reports, "population aging is expected to drag on U.S. growth, and the hit could be substantial."

According to the National Bureau of Economic Research, the retirement of baby-boomers in the decade between 2010 and 2020 will lower GDP growth per capita by 1.2% a year from what would have been the case if the nation's demographics had held steady, while slamming productivity.

The thinking behind the study is simple: population aging is already long underway and by looking at variations in state population aging, authors Nicole Maestas at Harvard Medical School, and Kathleen Mullen and David Powell at policy research group RAND Corporation, are able to estimate how a graying workforce affects output, participation rates and productivity.

Now America's deteriorating productivity trend is nothing new; however for the first time it has been blamed on the demographic shift of the US workforce and specifically the vast preponderance of baby boomers stuck in the labor force, instead of - say - half the population of the US and Canada using Facebook on a daily basis. As Bloomberg adds, what's surprising is the composition of the slowdown: one-third is driven by slowing workforce expansion and the rest by a drop in productivity gains. The productivity slump isn't reserved to older workers: it takes place across age groups, the researchers find.

The authors suggest a few theories about why that's the case. It could simply be that younger and older workers complement one another. Or the most productive older workers might be leaving the workforce,  while less-productive old timers stay on the job.

This is another way of saying that employers keep hiring old, experienced workers at the expense of younger Millennials who are unable to find jobs due to bottlenecking as a result of the same older workers who refuse to retire for no other reason but simply because their savings no longer generate a cash flow.

"How much of it is that relatively productive workers are the ones who are choosing to retire? It's very hard to say," Maestas told Bloomberg. 

Regardless of what's behind it, the discovery that the aging workforce could be weighing on productivity comes in contrast to other guesses, is important. The Fed has long been pondering over the issue of sliding US productivity. As Bloomberg adds "it's not clear why productivity growth has dropped off, and the change has real-world implications: it's one factor that caused Fed officials to lower their projections for where interest rates will settle in the longer-run, based on meeting minutes from their June meeting."

What's worse about the new findings is the suggestion that already slumping productivity is set to get even worse. If growth over the next 20 years otherwise held near its average for the 1960-2010 period — about 1.9 percent — adjusting for the demographic shift would lower per-capita GDP gains to 0.7 percent this decade and 1.3 percent next, based on the estimates.

It also means that the natural rate of growth is likely at or below zero, which also confirms that any attempts to hike rates will be doomed to failure as the US economy simply can not sustain a rising cost of money, thus forcing the Fed to ease after every single rate hike.

But while we agree that the relentless aging of the US workforce will have dire implications for the future of the US productivity, as well as economic growth, it is clear that the study never got to the fundamental culprit, which is the Fed itself.

Because the glaringly obvious tangent is that old workers are stuck in what now seem to be "lifetime" jobs, with no hope of retirement, for one overarching reason: the interest income generated by savings is zero (and negative in real terms). This means that as an entire generation of workers has found out the hard way it will never have the planned cash flow from savings parked in the bank; it is therefore doomed to work until death. By implication, it also means that the entire younger generation, in this case the biggest one in US history, the Millennials, will be stuck unable to enter the workforce and to build critical labor skills, as a result of lack of hiring as employers retain their old, experienced, and thus much more cost-effective workers for as long as they possibly can.

Our advice to the Harvard authors of the study: in the next part of the study, the one looking at why the US finds itself in this situation, please look at the Fed's monetary policy. Because with over $10 trillion in savings generating no income, and thus crushing the velocity of money, the real reason why the US is facing a productivity crisis of epic proportions is because the central planners in the Marriner Eccles building have destroyed an entire generation's hopes of being able to retire.

As for those elderly Americans stuck in menial jobs until their dying day, our condolences.

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SomethingSomethingDarkSide's picture

They ushered in the Age of Decadence, and because of their willful ignorance - we are all doomed.  Fuck your 401k's and home values, retirees.

N0TaREALmerican's picture

Get a haircut ya goddamn hippy!

silverer's picture

Yeah. And look who's doing the blaming. People who have been unproductive their whole life.

ParkAveFlasher's picture

I love the Al-Queda beards and the tattoos, don't they just scream "hire me!" wtf

zeronetwork's picture

Why people don't blame confetti fiat whose value has gone down 96% in the past 90 years.  Why people don't realize that they are being robed of their hard work by giving them fake money in return. 

de3de8's picture

Wait till they go NIRP!

The Alarmist's picture

Hate to spoil the hatefest for the Boomers, but they might actually be propping up productivity.  It's the millenials and Gen Y and Gen Z who are spending most of their day updating Facebag and Twatter and thereby reducing productivity.  Some of the Boomers are doing this, but if I take Hillary as an example, I'm sure it can't be too many.

Chris Dakota's picture
Chris Dakota (not verified) The Alarmist Jul 29, 2016 8:10 PM

Im happy to work until I die, actually I hope I die at work.

Because I listened to those cultural marxists during the summer of love in San Francisco

"don't work for the man, don't get married, don't go to college, don't have kids, don't buy a house.

if you need money just panhandle"

So I am paying the ticket now, I played my youth away.

conscious being's picture

I worked and now I play. Retired at 43 y.o.

Chris Dakota's picture
Chris Dakota (not verified) The Alarmist Jul 29, 2016 8:16 PM

They are starting up the age divide now, student loan forgivness will be the issue.

Soon we will all be alone due to those who hate us, mission accomplished.

When you hire the boomers you don't have to install slides in the office, bean bags and bars.


DontGive's picture

What's wrong with neckbeards and big ol'e piercings you can earfuck?

Manthong's picture

..all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,”

 “That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

I read that somewhere.


Dugald's picture

Sure you did, but in this time and age it means little because you have all become fat, lazy, lacking in initiative, you have become Walmartians, that you consider Trump/Clinton as your leaders shows that you are past all redemption, doomed to continue the swirl around the sink hole....What you the people have done to a once prosperous and innovative nation is pitiful to see, and a lesson to others on the brink...

LN's picture

Up voted you, but would ask, did you have no participation in the current state of affairs?


Manthong's picture

Just for the record, Mr. myopic, over-opinionated cynic.. a lot of folks might fit your model, but don’t include me.

If that does not set with you, I challenge you to a duel… at 1000 yards.


Chris Dakota's picture
Chris Dakota (not verified) ParkAveFlasher Jul 30, 2016 3:10 PM

I like the beards but not the tattoos.

Beards are a sign of masculinity throughout all history .

I dislike children dressing as adults, in the old days you wore short pants

until you were a man. We encouraged maturity.


Beltain's picture

Like Boomers worked. Boomers just got paid from the money that was suppose to go to Xr's and Mil's while they talked about having meetings and the need for more diversity and sensitivity training.


SgtShaftoe's picture

There are a lot of inept boomers that are in leadership positions that they have no business being in.  Younger Xers especially highly qualified people with extensive military leadership experience are passed over for these limp wristed boomers.  It doesn't matter that they are better qualified, the old geezers win the day through the old-boy network.  I see many in the boomer generation that made out well during the last few bubbles, but refuse to properly pay Xers and millenials because of the "I got mine" disease, so "fuck you".

I am really fucking sick and tired of that bullshit.  People with that attitude can seriously go fuck themselves.  Hard work and high intelligence merits good compensation.  Taking care of your people doesn't seem to matter to many of these people because "I got mine".  That is simply piss poor leadership.   

Ms No's picture

I think corporations in general have a hard time identifying the good employees.  I see it all the time.  I primarily learned from three very old school individuals and I am enternally greatful for this.  In my field I see some big differences. 

The older group is calm, slower moving, takes in the big picture, makes sure things are done with absolute excellence and their pride is tied to the end result.  They will not run around like chickens with their heads cutt off in a panic, regardless of what pressure comes down from above.  They will resist these stupidities which save the project in the long run.  There are only slight and temporary differences in production as a result of this

The younger you go down on the list the more susceptible to pressure induced panic they seem to be.  I have seen this cause countless catastrophes that burned down enormous amounts of cash and even cost lives.  It also creates for a terrible work environment. 

Experience may have something to do with this but it is also the case that they come from an entirely different time and perspective.  Of course, corps are far less concerned about these things now because it is all about this quarter or whatever.  The fines I have seen levied over deaths and accidents were nothing.  There seems to be less and less long term thinking.  I feel the pressure but I refer back to those I learned from because I see that they were right.  Plus, I don't appreciate the undignified race that they are putting us all in.  When I have tried to explain this to younger guys they just get this look in their eyes like "Your views are old and I am going to be better than you ever were".  It doesn't work out that way. 

DocBerg's picture

Most of the inept boomers in leadership positions got there by artfully dodging the draft.  Those of us who traded our blue collars for green ones, lost at least 10 years of our lives due to readjustment issues.  Some of us also committed suicide like a lot of the current vets have done, or drank themselves to death.  As you are finding out, it is impossible for most people to make this time up.  And, once you discover that saving for retirement is impossible, you will be even worse off than us.  So blame the Artful Dodgers, not those of us boomers who are vets.

Falling Down's picture


Military background, here, ground combat unit in the Corps. Worked my ass off for shitbag boomers and a few folks who were slightly older. They got theirs, alright, and were/are so blatant about it, it's disgusting.

Utterly clueless, all of them. The boomers I've met who are worth a shit stayed in engineering, or on the shop floor.

Who the fuck will be able to afford the leftovers of the outsized lifestyles of so many within that generation? My guess is that foreigners will scoop up a lot if it on the cheap.




LN's picture

Young pups that signed up to be the cutting edge of the sword that is trying to kill us all, just for the benefits, bitching about us old farts that worked 80+ hours / week supporting our families.  Makes me want to puke.  Grow up!


SilverSphinx's picture

military leadership?


Attacking countries and murdering their citizens, when they've done nothing to us in the U.S. is not 'Serving your country.' and protecting us.

Military hasn't been protecting and defending the Constitution, our borders, or our people for decades.

They've been the enforcement muscle for the the NWO and resource theft.


"War is Racket" and current & exmilitary are the enforcement muscle.

LN's picture

Very true, but most are too indoctrinated to see this simple truth.


roddy6667's picture

Cannon fodder thinks it deserves respect.


PhoQ's picture

Or the fact that menial jobs don't put a lot of productivity into the system in the first place.

How much do barkeeps and greeters add to the GDP, compared to an auto worker?

bigkahuna's picture

A lot of comments about people based on age. Seems like we just fixiate on the worst we can find in each group (the groups that the media creates for us). There are really good people and dirtbags in each group.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) SomethingSomethingDarkSide Jul 29, 2016 12:56 PM

Why won't they die?  If they were dead unemployement would look so much better - Obama

Arnold's picture

We still plan to vote though.

Meteor for President.


-- grateful dead

de3de8's picture

We will all be "old" someday

29.5 hours's picture

...only the lucky ones get to be old...

LN's picture

I would contest this notion, there's nothing good about becoming old, best I can tell.


Arnold's picture

I am still thankful for that first conscious, morning deep breath.

Then comes the 3 am anxiety attack.

Cloud9.5's picture

Coming soon enough sport.  Then you can figure out how to run a lathe and milling machine.

U4 eee aaa's picture

we have robots for that now

Hal n back's picture

don't be so quick to blame them all. Many saved for retirement and expected that between Social Security and 5% coupons on truly safe bonds they woudl lead a good retirement

Soc Sec announced it expected 2017 to be another zsero increase year  and we know where rates are headed.


The problem is th eboomers were led into debt so easily by keeping up with the jonses, Cars Houses, vagations with helocs.

and teh spouses working to help pay or all that.


Now they are investign  if you can call it that in stocks as stocks are great.

Great, GDP we know is around 1% seasonally adjusted and we know how overstated that is, so stocks priced at 25 GAAP with no growth--whats the market really worth--7x real earnings> thats folks is a 70% haircot to be expected,


but wait there is more


The leaders are Facebook and Google which make a ton on clicks. That creates a lastign economy

The good news is the reset cannot be to far away--wherever we are going, and we are stuck with being along for the ride, we probably wil get there sooner rather than later.



Bay Area Guy's picture

I believe you're wrong on the Social Security "increase".  I read that it is all of 0.2% because, laughingly, the government claims the CPI went down.  Not in my neck of the woods did it decrease.

Arnold's picture

Raising children into their forties turned out to be a budget strain.

Who knew?

Kirk2NCC1701's picture

Thank 'God' for having more than one citizenship!

Funny how 'Nationalism' and 'Patriotism' only works one way:  the Bottom is supposed to be partiotic, to protect the Top. Poor young men are sent to bleed & die, so that rich old men can live a life of opulence and pleasure.

de3de8's picture

Right because there ore no veterans receiving SS

SgtShaftoe's picture

It doesn't really help the ones that died.  Hopefully they opted for good coverage from the USGLI, but the average plan is pretty paltry.  The homeless ones that lost their sanity that die certainly aren't making their USGLI payments. 

Killdo's picture

they died for Cheany, $hitlery and Big oil - not for average Americans

Paul Kersey's picture

"America's Aging Baby Boomers, Forced To Work Until Death"

The silver lining is that some of us will not have to work that long, because recent studies show that white Americans are dying sooner than they did in the past. Praise the Lord Blankfein for causing us to have greater depression and easy access to psychotropic drugs. Suicide is now more user friendly.

Max Rommel's picture

I'm quite comfortable. My wife and I make $45,000 a year from S/S and we really don't need it. So it's our pin money for our daily casino trip. Ha! Thanks for the free money!

LN's picture

You're just not someone worth knowing are you?  Just some boastful POS on the net.


Bwana's picture

I find your attitude insulting. I'm a boomer. I was born in 1946. I'm also white. I got a job after school when I was 16 and have worked ever since. Our crooked government torpedoed me with the Civil Rights Act because when I finished my AA & BS I found with an A- average I couldn't get into any professional college because there was a priority given to blacks who had their complementary 1.0 (D-) program diplomas. I kept working, got married, supported my wife and children and now I have grand children and great grandchildren. I have had 2 ,1 week vacations in my lifetime. The rest of the time I had to work to support my family. I have a modest union pension, my savings which pay nothing to speak of and social security which is running out of funding because the government has borrowed or stolen trillions of dollars from the social security trust to buy votes from low life lazy assholes like yourself. I can't count on those SS payments, or my union pension because all that money is in stocks and I will most likely get a governemnt haircut on my savings which if I drew out in cash probably would get taken in a civil forefiture action because some bureaucrat would make me prove I was not up to no good by having over $3,000 in cash. 

It really chafes my hide that a prancing piss ant like you says I "ushered in the Age of Decadence" and because of my "willful ignorance" - we are all doomed. I work because I need to work to support myself. I can't count on any of my financial assets to support me. Because of worthless non working piss ants like you, I and the rest of us workers pay the highest taxes in the world. I added up my taxes and when I look at my federal taxes, state taxes, local taxes, property tax on my small house, vehicle registrations etc, and a 8.75% sales tax on what I have left I pay close to 65% in taxes that low lifes like you feed off. save a copy of this because when you are my age and some twerp like you spits in your face you will want to wring his neck with your arthritic hands and body full of worn out joints and wish you could afford to retire.

N0TaREALmerican's picture
N0TaREALmerican (not verified) Jul 29, 2016 12:35 PM

How could old people be weighing on productivity?   The guy in the picture doesn't look fat.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) N0TaREALmerican Jul 29, 2016 12:57 PM

Its not the weight, its the two plastic kneecaps

JamesBond's picture

Yeah, but his two steel hips more than make up for that.