I perked up when I got one of my daily WSJ alerts yesterday, as the headline really caught my eye:  Baby Boomers and the Labor Force.  Finally, the demographic theme that I’d written about here, here, here and here – beginning well over one year ago — was going to get some attention.

Except not so much.

The Journal reports — as TBP readers knew long ago – that, “The recession has taken a toll on participation rates for nearly every group, with one exception — older workers. More people 55 and over are staying in the labor force, and the participation rates for older workers are the only ones that rose in recent years.”  A few of my graphs made that abundantly clear, especially the first one at this post.

But while the CBO provides a laundry list of reasons for Boomers lingering in the workforce — see the Journal’s excerpt — I believe they totally whiffed on identifying the most important one (emphasis mine):

About 65 percent of baby boomers age 60 and older believe that they can’t afford retirement, according to a new survey by CareerBuilder.com, the online job advertising site. That’s down from 72 percent who said the same thing last year — an improvement, but still a big number.

It is disappointing that the CBO chose to ignore the devastating and ongoing consequences of the recession (decimated investment and real estate portfolios) and focus instead on “improved health” and “fewer jobs requiring physical strength,” among other things.  It serves as yet another stark reminder to me (as if I needed more) of what a tremendous disconnect there is between Main St. and Washington.

(At some point I will update the graphs in the related posts.)

Adding: Now this WSJ posting hits the nail much more squarely on the head:

Older Workers More Likely to Be Employed Than Teens

In the past, Grandma and Grandpa tended to retire to a life of leisure in their sixties, while teenagers were expected to work. As recently as 2000, boys ages 16 and 17 were far more likely to hold paying jobs than their grandparents ages 65 to 69.

But just a decade later, that picture has turned upside down: Grandpa is twice as likely to be working as Junior.

Category: Current Affairs, Data Analysis, Economy, Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

20 Responses to “CBO Swings, Misses on Demographics”

  1. wally says:

    That CBO report also attributes participation decline by males of 45 to 55 or so to ‘retirement’ at the same time it notes the extended working years of the 65+ group.
    That’s a neat trick if you can make your mind accept it.

  2. Perhaps the major criticism should be made of the fact that Americans simply consume too much and save too little — and that this paucity of savings is the largest contributor to the shocking lack of affordable retirement.

    Encouraging Americans to rely on equity or real estate speculation for funding their retirement is generally going to be a recipe for disaster, because quite frankly most ordinary Americans are quite unprepared to manage their own money (they buy high and sell low or invest in low yielding investments all along).

    Savings rather than consumption should be emphasized, as well as prudent investment — however – the exact opposite is being encouraged by various governmental entities…..

  3. The Window Washer says:

    I haven’t looked at the number but they make perfect sense if you think of the social split going on. If you had a good plan for you money going into the last few years you’re retiring early. If you had a bad plan you’re never going to retire.

  4. BennyProfane says:

    “It is disappointing that the CBO chose to ignore the devastating and ongoing consequences of the recession (decimated investment and real estate portfolios)”

    How about lack of savings and poor investment choices (piling a lot of money into the house and even houses thinking that pyramid scheme would go on forever)?

    One third of Boomers will have only Social security to live on. One third. The average retirement savings in the group is about 50 grand, but that’s hard to nail down after the carnage of the past few years. Of course they’re still working.

    There’s going to be a lot of old people mire in poverty pretty soon. A lot.

    Invictus: I’m not passing judgment on the poor investment decisions some folks undoubtedly made. I’m simply pointing out that the CBO apparently chose not to mention the plight of those who are postponing retirement due either to poor choices on their part (spec house flippers) or through no fault of their own (victims of predatory lending practices). In either case, they’re screwed.

  5. franklin411 says:

    The biggest reason for boomers staying in the labor force isn’t economic at all. It’s the weak moral fiber of the baby boomer generation.

    When my Dad turned 65, he retired. Why? Not because he’s rich–far from it. He had scrimped and saved enough for a secure retirement based on a modest pension of about $25k/yr.

    My Dad retired because he “didn’t want to be one of those selfish old farts” who *could* retire but *refuses* to do so, blocking opportunity for someone younger. When he was a young man, he got his job because someone older retired when they hit their 60s. He wasn’t going to be a selfish SOB and hold onto a job that he loved, but didn’t need to have to survive.

    I can’t see a boomer doing that. Boomers essentially have no soul. They have an unflappable faith in their own perfection, an insatiable greed, and an utter inability to empathize for others. The boomers are the most ungenerous generation the world has ever known.

  6. BennyProfane says:


    We have no soul?? Hey, if it wasn’t for us, classic rock would be Connie Francis and Pat Boone, and you’d still be wondering why all those negros get all excited when they smoke a plant.

    You’re just jealous because we lived through a time when LSD was legal and casual sex didn’t kill you.

  7. rip says:

    @frankie: Still stirring the pot I see.

    Find it fascinating that someone as obviously mentally challenged as you is existing in a graduate program.

    Guess that’s as good a sign as any of the horrible plight we’re in.

    The Boomers? You wish.

  8. NeutralObserver says:

    Instead of playing the blame game, let’s look at some obvious facts. The pensions available to previous generations no longer exist except for government workers. People are specialized in a skill set because that is what their natural skills are and because they have trained in that area. Most people are not skilled investors and they never will be because they have no natural abilities in finance and, even if they did, they have inadequate training to enable them to compete. Clerks, construction workers, retail sales professionals, manufacturing employees, etc. will never be good investors. While slightly better than the average person, even engineers and scientists aren’t particularly good at investing because they can’t tolerate losses. This idea that we would encourage people to save money in 401Ks and allow them to manage their own money for greater returns has been a failure and it certainly has not provided adequate returns for their retirement. Most people would have been better off if they had saved their money and just bought government bonds because their principal would still be there. As a society, we need to review this whole concept because the consequences of our current policy will only continue to get worse. Workers won’t be able to retire, the young and unemployed won’t be able to find jobs, a lot of people will end up in poverty after working their entire lives.

  9. Lord says:

    Read an interesting paper on this. Educated workers are more likely to continue working because their portfolios are down while less educated workers are more likely to drop out due to disability being unable to find work and given the preponderance of the latter, about 50% more will drop out than continue working. The disabled are not counted in the workforce which is why this doesn’t show up in these figures.

  10. Lyle says:

    Re investment if people did not swing for the fences they would not be as badly hurt than if they did. The S&P 500 is down 17% from the peak, but in reality is about flat from sept 2006 or so. A mixed bond equity portfolio would not be down as much. But if you swing for the fences with actively managed funds the fees eat you up. Note that the 17% does not include dividends, which for 4 years might be 6% additional at 1.5% per year. The fallacy is thinking that investment returns will enable you to retire its saving pure and simple, live below your means and you can. But of course the financial services industry does not like index funds because they don’t make them rich.

  11. whskyjack says:


    that concept only works for pick and shovel labor jobs. In those areas people are retiring.
    In areas where brains experience count is where people keep on working. I know some eighty yr old engineers still flying around the world working their butts off. The only way you are going to get rid of them is to shoot them in the head. Since you will need many years of experience before you can replace that worker, He is not your competition.
    I’ve seen too many of my parents generation rot in retirement. For me it is not about the money, it is about making a continuing contribution.
    So , no, I don’t see retirement in my future until they put me in the oldfolks home.


  12. Molesworth says:

    Since TBP commenters seem to me to be a reasoned group, I’d love to hear what you think about the inability to make money ‘safely’ and its impact on retirement and retirement savings as @Alaric Invest suggests.

    Back in the old days, you could put money into the bank and earn 5% interest without risk. The Fed keeps rates low to ‘stimulate’ the economy but it kills savers.

    @BennyProfane. Spot on, son.

  13. roxy says:

    Isn’t this a prime example of why the privatization of Social Security is such a bad idea. The concept that the “regular people” are going to be able to manage their SS acount like they manage their other investments and somehow make a better return does not make sense.

  14. globaleyes says:

    July 30, 1965 is the day baby boomers became the first generation in American history to subsidize their parents. Defict spending is the story of how boomers subsidized their parents who lost a war (Vietnam) with their furure and inflation proves it. That lasted until February, 1981 when baby boomers were replaced by sovereign nations like Japan. It was at that time that The National Debt replaced printed dollars.

    There’s only two ways a government can get something-for-nothing:

    1. direct printing (inflation) or

    2. direct borrowing (national debt)

    Baby Boomers have been hurt by both.

    Who are the winners?

    Answer: many of them are dead.

  15. dnquiggs says:

    Like a few of the posts above, I think that we need to look at employee retirement contributions when firms shift from DB to DC plans. Studies have repeatedly shown that employees underestimate the amount that they need to contribute to meet their retirement goals. I often wonder if the savings that firms experience when they switch from DB to DC is due to the naivety/ignorance of the average contributor. If so, then we definitely need to look at methods of correcting this disconnect. This also may cause us to stop vilifying public/private pension plans due to the fact that while they are underfunded, they do appear to be better off than many DC participants (not to mention the fact that they lower fees). Either way, the subject matter certainly warrants more research before continuing the push into DC plans and/or privatization of programs like social security.

  16. DeDude says:

    Another idiotic conclusion from the report:

    “Specifically, changes in the tax code that are scheduled under current law will increase
    marginal tax rates on labor income (the tax rates applied to the last dollar earned)
    during the coming decade and, in CBO’s estimation, reduce labor force participation.”

    There is no data to support the absurd idea that if people are taxed more then they will take an even further cut in available income by working less. It is the other way around for the majority of people, they work until their after tax income fits the expenses and savings goals.

  17. DeDude says:


    You are absolutely right, the idea of privatizing social security is just another GOP ploy to serve the sheeple and their future on a silver platter to the rich rent-seeker class.

    The same GOPsters are attacking the public pension plans in part to seek more “meat” to serve to their rich rent-seeker bosses, but also as part of their “divide and conquer” war on the middle class (let them all eat cow-cakes).

    However, I have to admit that I would prefer that public employees were included in social security , and then had defined contribution plans for the rest. The reason is that under such a system the politicians cannot rape the public pension funds (by deliberately not putting enough money into them) and then later come back and demand cuts from what was promised (because, surprise, the underfunded pension plans cannot “afford” to give what was promised). If you have individual accounts that get funded 100% with every paycheck; the workers are not going to be subjected to the kind of GOPster sponsored robbery that they currently are suffering in many states and municipalities. Social security is a defined benefit system that basically prevent you from ending up living in severe poverty. As long as public employees have that, a defined contribution plan (with limited and sensible investment options) should be OK for the rest.

  18. Greg0658 says:

    globaleyes @1:48pm – Thank you .. that post by F411 switched me off and play’g rock’n’roll background all day .. its been awhile
    Backstreet Boys – Larger Than Life
    Chris Gaines (Garth) – Right Now
    .. way more than those – but music is personal

    DeDude @6:25pm – I like the concept of SSI for gov workers – so as to keep watchin the pot for themselves & us

    and the general comment of 401K and/or SSI in private account form … again how about a KISS system where corporations borrow from the banks with general pay it back rules .. or go down swinging and the spoils to the next batter .. generally NO Stock Play (those good ole days with interest bearing savings accounts) … because from the gas thread – we are supposed to be working in the day – not watching an account like a hawk

  19. rip says:

    @globaleyes: 1:48

    SWEET. Well stated truth. Never seen it put quite that way.


  20. DeDude says:


    I agree that the rent-seeking class has gotten absolutely out of control. Currently more than 1/3 of our economy is basically about sucking money out of other people’s work, rather than producing products and services. Looked at another way, the workload for those who actually make the products and services enjoyed by all is about 50% more than it should be if all the coupon clippers and speculators got a real job. There is a reason one of the major religions of the world basically bans rent-seeking; society cannot in the long run afford all those lazy free-loaders.