Due to age demographics, I expect employment in age groups 60 and over to decline by about 12.5 million. Let’s go over the math to see how I arrived at that number. 
Population Levels in Retirement Age Groups
Starting in the late 1990s the population in older age groups began to surge. But the older one gets the less likely someone will remain employed.
Covid did not impact the employment population ratio much and since then numbers have largely recovered.
Population vs Employment Population Ratio in Retirement Age Groups
Key Numbers
- As 20.103 million in age group 55-59 transitions to 60-64, the percentage of people working declines from 72.0 percent to 56.6 percent.
- As 21.245 million in age group 60-64 transitions to 65-69, the percentage of people working declines from 56.6 percent to 32.5 percent.
- As 18.919 million in age group 65-69 transitions to 70-74, the percentage of people working declines from 32.5 percent to 19.0 percent.
- As 15.713 million in age group 70-74 transitions to 75+, the percentage of people working declines from 19.0 percent to 7.9 percent.
The lead chart shows the expected result of these demographic transitions.
Expected 5-Year Employment Losses
- 55-59 to 60-64 transition: 3.096 million
- 60-64 to 65-69 transition: 5.120 million
- 65-69 to 70-74 transition: 2.554 million
- 70-74 to 75+ transition: 1.744 million
Five-Year Total and Average
- Total: 12.514 million
- Average: 2.5 million per year for 5 years
The losses may not be uniform. A transition from age 64 to age 65 is more significant than a transition from age 60-61.
The BLS does not have more precise numbers of either population or the employment population numbers for each year.
If the aging is not uniform, those years in which more people turn age 65 will have more employment losses than other years.
What About the Unemployment Rate?
If all 12.5 million people stopped working and stopped looking for a job, the unemployment rate would barely change.
It is on this basis, knowing full well replacement workers will be hard to find, that I made bets against the consensus expected sharp rise in the employment rate. Even the Fed got this wrong.
The economy won’t shed 12.5 million workers all at once, but about 2.5 million per year is baked in the cake.
Replacement Workers
The number of workers 16-19 is 17.519 million (only 4 years instead of 5). I used 16-19 instead of 15-19 because that is the data the census department and BLS have. I would have used 15 it it was available.
They will transition from an employment population ratio of 29.8 to 65.5.
That’s a gain of 6.25 million offsetting about half of the boomer losses but at much lower levels of productivity.
Many in this age group will be in school at part-time jobs through age 22 or so. And many people age 62-70 will move from full to part-time jobs. This helps explain the discrepancy between jobs and employment.
Recession Duration in Months
Recession Duration Key Points
- The 2020 recession only lasted 2 months.
- The 2008 recession lasted 18 months.
Expect Long and Shallow Recession
I see no use in averaging the above recession data. Instead, I expect the opposite of the 2020 recession.
2020 was very short and unprecedented steep. The next recession will be the opposite.
Using Gross Domestic Income (GDI) instead of Gross Domestic Product (GDI), it’s not even clear we avoided a recession.
Real GDP and GDI in Billions of Dollars
Real GDP and GDI are two measures of the same thing. Income from sales and to workers should match output produced.
We have the widest divergence in history and GDI is below where it was a year ago. On a GDI basis, if the US avoided the recession I called for, we did so barely.
We do not yet have GDI numbers for 2023 Q4.
But part of the discrepancy is easily explained by QCEW.
How Much Did the BLS Overstate Job Expansion in 2023?
Based on QCEW data, the BLS may have overstated 2023 end of year jobs by 800,000.
QCEW stands for Quarterly Census of Employment and Wages. It is far more accurate but less timely than the monthly nonfarm payroll report.
For discussion, please see How Much Did the BLS Overstate Job Expansion in 2023?
Consumer Spending
Q: Has the US Consumer Finally Waved the White Flag on Spending?
A: The answer to the question appears to be yes, starting October of 2023.
GDI, QCEW, and consumer spending all suggest a much weaker economy than is widely believed.
I’ve checked the population numbers again more carefully and I stand behind my earlier comment. Mish, I’m quite confident that your analysis here is incorrect. Here’s a simple way to see it:
If there’s no major change in mortality, and if there’s no net immigration among those 60+, then the total population age 60+ can be predicted from the current population using current mortality rates.
Doing that math, you can see that, in 5 years from now, the over-60 population will be pretty much the same as it is today. In fact, on my estimate, it increases by about 150,000. The individual populations for each age group (50-55, 55-60 etc) do change a little, but not by nearly enough to take 12 million people out of the workforce.
With the number of people in each age group not changing much, and assuming (as in the original post) that the employment rate for any given fixed age remain the same in 5 years as they are today, it follows that the total number of over-60 workers in 5 years will be about the same as today.
More specifically, pick an age group, say 60-64. There are around 20 million people in that group today, and while every one of those people will age by 5 years, they all get replaced by someone younger who ages up. That new group is about the same size. So in 5 years there will still be around 20 million people in the 60-64 age group. This is true for all the age groups.
Since the population in each age group isn’t changing much, if the employment rate in each age group also stays the same in 5 years as it is today, then there will be pretty much the same number of workers in 5 years as in today.
Actually many demographic experts expect employment rates to increase slightly, so I would even go out on a limb and predict that in 5 years there will be more workers over age 60 than there are today. Not 12 million fewer.
???
I’ll believe it when I see it.
>50% of the Boomers I know will be working until they die…
…because they lack sufficient retirement savings to cope with costs/prices.
historical/backward-looking data sets DO NOT ACCOUNT for high inflation + diminishing service levels prevalent today (vs. much EASIER environment that existed when this data was collected).
This analysis is oversimplified to the point of useless incorrectness. The 5-year replacement population that matters for those going from 55-59 to 60-64 is those currently 50-54, and so on down the chain. In addition, it’s utterly flawed to assume “ceteris paribus” (everything else remains equal) in any economic analysis of system change. This is as true of over-60 employment/population ratios as for any other change. Mish should know better since he often critiques leftist policy proposals on the same grounds: no change takes place alone, people adapt to changing circumstances, unexpected consequences abound. The employment:population ratio is not, never has been, and never will be a static thing, it will depend on the health and financial needs of those adults just as it always has. And finally, the youth will gain productivity (and greater appreciation of conservative principles!) with experience and improved technology, just as their elders did.
Finallly, the obvious demographic time bombs are visible in the disastrously low birth rates of Japan, China and Europe, and the extreme high poverty/sustaining rates in Africa. The US will do fine by comparison.
My estimate in your March 9 article was 15 million, not factoring in deaths. Looks like I nailed it.
The modern workplace is a dumpster fire. Why people would subject themselves to that, rather than retire after age 65, puzzles me.
Hi Jeff,
A dumpster fire in what sense(s)? Can you elaborate?
No one knows what the hell they are doing anymore. They have a lack of authority and tools to do their actual jobs. More often than not, I have had trouble getting simple matters resolved. My wife was in a grocery store recently and asked the checker if the store sold cigarettes. The checker said, “I don’t know”, and that was the end of it. Another example — an Explanation of Benefits is a legally required document when you receive medical services. We spoke to ten different people in the back office departments for our medical plan, and for the few that knew what an EOB was, they still couldn’t produce the document for us, and we never got it after months of trying. Incompetence abound, no one cares, and no one even knows what the hell they are doing anymore.
I’m sure some workplaces are pretty rough but some are, for now at least, pretty decent. If someone is frugal with spending, they can save a good amount of their wages and get 5% interest pre tax on them which can add up to substantial income. I’ve read many say that their SS and Medicare aren’t keeping up with inflation too well.
Jobs are not abiut good wages and liking your environment. They are about being staffed with people that can get the job done. Politics and grifting have won out over actual work.
just turned 62 and COULD take early SSI and retire(not really have lots projects)
if diaper joey gets his way – he’ll make all my temp(1099) workers into UNEMPLOYED w-2 workers – I’ll close up shop
people want higher wages – only way is if they pay their own taxes and benefits
Need MOAR young workers …
Below is a short quiz.
Population surge from open borders will add workers and higher birth rates in order to:
A) Repair demographic trends helping fund social security and medicaid
B) Allow for cheap manual labor to boost profits across job roles less impacted by robotics and Artificial (Calculative) Intelligence
C) Create a large captured voting population to maintain and expand uniparty politics under guise of Democratic Party ideologies
D) Increase population of military age males for more Imperial Adventurism
E) ALL OF THE ABOVE
People are sadly being duped by Republican tough on immigration rhetoric. They waste money and play on people’s fear and xenophobia while allowing enough immigrants for their purposes in. It’s one of the many diversions they use to continue their debt mongering and dollar debasement. And their uniparty partners the Democrars do the same thing with other divisive issues.
Nice post Mish. Good to see you finally looking into the impossible math of demographics and grinding the numbers out. I have come up with a number of 10 million because I expect the older population to be forced back to work due to high inflation.
According to this link. the average retirement savings for 60+ age group is $500k but the median is $200k. There is no way people can retire on $500k much less $200k. I calculated I need at least $4 million to survive retirement above poverty level so I suspect $2 million needed now for 60+ age group.
link to empower.com
You just had another post about $1.2 trillion in spend by Mike Johnson, all of this spend is highly inflationary. On top of that social security hands out $120 billion/month and growing, again this is highly inflationary. More people added to the roles every month, highly inflationary. A depleting labor force means more inflation.
I’m going to tell everyone over the age of 60 what to expect: inflation is going to kill you if you don’t have a few millions to retire on or a plan to cover your growing inflationary expenses.
There is something beyond productivity loss that will be far worse and that’s the type of work that needs to be done but no one willing to do it. I’m not just talking about low paying meat packing plant jobs which is also a concern but things like plumbers, electricians, mechanics, carpenters and other trade work. Young people don’t want to do these jobs, they want to be Tiktok stars, influencers, world travelers or quite frankly, would rather live overseas. I have one kid that moved to Europe and many people in my family & friends circle are all talking about retiring overseas or have already moved overseas.
Now how is the Fed, Biden or Trump or Congress going to fix any of this?
Answer: they won’t, it’s every man, woman and child for themselves.
Your conclusions that $2million will be needed are based upon flawed assumptions. I will correct you: 1) Americans ARE NOT staying here. We are seeing huge numbers of Americans in CHEAPER places to live (I will not name them, but we spend winters at one place that is CHEAPER, but still westernized and has REALLY great infrastructure, and water). 2) That Seniors have to keep their McMansions or even STICK BUILT HOMES.
RV’s and Mobile Homes are a great alternative. For those who are REALLY screwed, they move to the Desert in winters (Living in RV’s on BLM land). It is only a bit under a $100 to get a permit and they have sewer trucks and water trucks tending to them.
I am not doing that. Worst case, we have a Diesel Pusher that still runs great that I COULD use to BUG OUT and live in Quartsite, AZ for NOTHING, nearly.
DO NOT assume that NOT having millions means that you will die poor. YOU HAVE TO CUT SPENDING to survive.
Are you listening to yourself? living in the desert for nothing? What kind of life is living in the desert? RVs? have you seen the cost of RVs? And who wants to live in an RV full time?
If you want a middle class lifestyle you need $2 million. if you want to live in a trailer in the desert and enjoy playing with rattlesnakes then yeah, you just need a few thousand dollars. Enjoy yourself out there, that’s not for me.
I went from living the most opulent waterfront life to living during the pandemic in campgrounds traveling from one end of the country to the other for 2.5 years. We’re now locals in many amazing towns around the US. Not the first time I have done this BTW.
I’m a digital nomad.
Living in houses for me is way overrated. Since September I’ve been living in Motels going from one place to another. I have not mowed one lawn cleaned one oven or toilet or put up with an annoying neighbor for more than one night for 3 years. During this time I have seen natural splendors beyond all comprehension and met much of America in person.
Life is so dreadfully boring, what people accept for life, is like a dog facing yet another bowl of dry food most people’s lives are pure drudgery – when the highlight of your day, is going to gym; IMO you lost.
Going places almost every day, meeting new people, seeing what’s going on in farm towns in rural Nebraska or Park City or Des Moines or Omaha or San Francisco – or Big Sur or Peru Illinois or Cody Wyoming – driving with Tornados a few miles away or along Hwy 395 during the biggest Sierra blizzard in 100 years.it’s interesting, it just is.
Houses with property taxes, maintenance, landscapers, rent. landlords, neighbors, grocery shopping, Costco, new furniture, new nick-nacks, remodeling, MOWING THE FUCKING LAWN WITH YOUR RIDING MOWER, broken furnaces, new stove, paint the cabinets meah you can have it.
I am not my things.
Then you are all set. It only took you 50 or 60 years to discover what’s important. I like to travel and discover too but I do that overseas to Japan, Korea, Thailand, Peru (in South America), Colombia, Netherlands, Austria, and many other places. That’s where I want to be not wrangling snakes in the desert.
I have a kid that lives in Europe and we usually go and visit different places when I visit. I have little interest in Nebraska or Iowa, I already know what’s there and it never changes. You don’t like the ‘static’ world but that is exactly what the U.S. is, endless consumption. It’s funny how you think I haven’t visited all those places, i have and I’m done with it. You may eventually get there too at some point.
In the future, you’ll get old and disabled and the RV/motel lifestyle won’t be sustainable, until then enjoy the days you have left.
I’ve been on record for a long time that I have an exit strategy and that hasn’t changed. Almost there.
Yeah, Europe hasn’t changed much.
Except for the hordes of Middle Eastern and African “immigrants” everywhere that add “color” to what was once a great place to visit and live.
To each his own.
The great American money printing has lifted the boats, I mean property prices, everywhere I care to look. The gift of America to the world: counterfeit money. However, I don’t look at countries whose language I don’t speak.
I know what you mean. I speak only Americanese fluently and it’s difficult when staying in northern Scotland.
I think those numbers you are bandying about (4 million for you, 2 million for someone now) need some context.
For example:
1) Is that amount for just you or is it you/wife combined
2) Does that include all assets (like home which could be sold when you get much older)
3) Do you expect to spend it to zero or are you expecting to leave a bunch to kids?
4) Where exactly are you retiring (costs a lot more to retire in NY City than Florida or other cheaper locations)
For example 2 million for someone age 60 means they could spend down by $100K a year and have enough to go to about age 88+ if they just got 5% a year return and if they retired at 65 would take them into their 90s. 100K is a lot of money (WAY more than the average or median person makes) and that doesn’t include social security (which someone age 60 is definitely going to collect on as it’s not about to go away in 3 years) which would probably be another 30K a year giving them a 130K a year income.
My parents are no where near living in poverty in Canada as a mid 80s retired couple and they are doing it on 60K a year Canadian. They own their home which my dad told me cost about 25K a year in taxes/insurance/heating/gas/electric/phone/internet etc. The rest is car cost (down to 1 car), food, health care expenses and whatever fun stuff they can still do in their mid 80s.
“For example 2 million for someone age 60 means they could spend down by $100K a year and have enough to go to about age 88+ if they just got 5% a year return and if they retired at 65 would take them into their 90s.”
What inflation rate are you assuming?
What part of skyrocketing insurance, energy, food, housing, and other costs have you avoided the past 20 years? Glad your folks did great in Canada, they did so at a time interest rates were zero for over a decade.
What part of depleting labor force did you factor in to your assumptions? A plumber may cost you $800 in 5 years based on how fast so many are retiring.
What tax bracket assumptions did you make and did you include the fact that we have 34 trillion in debt and growing? The current tax brackets expire at the end of 2025.
What assumption have you made about interest rates moving forward? Go look at what happened in the 1970s for reference.
I could go on but it’s clear you are making assumptions based on what happened on the past and those are all wrong, IMHO, moving forward.
Your $2 million does not have an annual return of zero percent. For just about everyone, nominal investment returns are larger than the CPI inflation rate.
I forgot to answer your question. $2m is for a couple. Does not include home as an asset. Retirement in a mid to lower regions (not Cali or NY).
Here are how the tax brackets will change as things are today. Assumes Biden doesn’t raise them even higher from what is already going to happen.
link to creativeplanning.com
mpo45v2,
You need to consider that once you own your house and (final) car outright, your yearly overhead expenses are less than $10K in most of the country (e.g. property tax, yearly home maintenance, insurance, medicare payments, maybe car maintenance, and Federal income taxes are almost nothing). There are often two Social Security income streams totaling $40K or so if one person waits until 70 to draw, or both people wait for full retirement age. Compare this to a young person where taxes, housing, car, and saving are consuming (much) more than half their income. Young people have very little disposable “extra” income after all those costs, and that “extra” is all the money you need in retirement, because all those other expenses are gone.
I just did a calculation assuming a $100K annual household salary and plugging in my current living situations costs as if I did not own outright and was not retired. That $100K “working” income has identical buying power to making $40K in “retrement”, and I do mean identical. No change in lifestyle, whatsoever. No ” compromises” need to be made. This is something the FIRE community has figured out, which is why they work so hard to own a house and car outright as soon as possible.
Wrong. You are leaving a ton of things out or minimizing the expenses.
Electricity – my rates have gone up 30 percent from last year.
Water – rates have gone up 10 percent.
Gas – rates have gone up 4 percent.
Insurance – Auto/Health/Property have only gone up and will keep going up as long as there is high inflation and asset appreciation.
Property taxes – always go up.
Maintenance – New roof? how much do you think that costs now? Don’t know where you get “almost nothing” but that is wrong. I had to replace part of my fence, it was 3k for a section where it was 3k for the whole thing a decade ago. Fences need replacing every 10 years or so. Lumber is still expensive. Landscaping needs to be done regularly, tree trimming, power washing drive way and sidewalk, etc. Plumbing doesn’t last forever either, things wear down and need replacing. HVAC also only lasts about 10 years. I am dreading shelling out $6k to replace my AC unit at some point because it’s almost been 10 years.
Remodel – homes should have new carpet/flooring every 8 to 10 years as part of normal upkeep to keep house in good condition. You can skip this and let rot take hold to save money but that just pushes the problem to the next owner.
Appliances – Washers, Dryers, Microwaves, Range Ovens, Refrigerators don’t last more than 5 years now with all the electronic crap on them and they are far more expensive now than just 5 years ago.
HOA fees – these only go up as well if you live in an HOA area.
I don’t know what alternate reality you live in but clearly it doesn’t match what is happening in the U.S. today. You are free to believe whatever you want and hide your head in the sand until inflation grinds you down to nothing.
And if you have “low” taxes, kiss those good bye moving forward, again, another bad assumption that could kill your “low cost” retirement.
I suggest you create a spreadsheet and add up all of these things then come back here with your results. Use 3%, 4% and 5% for inflation as starter variables and a 10 year time horizon. I think you will be shocked if you do the math right. Then try 7% but make sure you are wearing Depends just in case.
of course, if you live in a condo or apartment then perhaps none of this matters to you and that’s fine. Everyone’s situation is different but the cost will be there for most American home owners.
Marking my previous reply to this post as spam is a coward’s way out of a discussion. I hope Mish takes it out of spam since I reply to your arguments directed at me, point by point.
For those of you who can’t see it, I’ve spent the last eight years of my retirement running every spreadsheet and retirement calculator eight ways to Sunday. I agree you might need $400K in today’s dollars to make it through what’s coming, but nowhere did I find that $2 million would be required for a two person household, all things considered.
Assuming you are making 7% returns on $200K, that’s about $14K a year, so everyone this discussion is aimed at is “low taxes” on the income side, since standard deduction for a married couple will be $29,200 next year, and half that for someone single. Most people in the country pay $4K/yr or less in property taxes, which is the only other tax to worry about. You framed the discussion, not me.
Property taxes by state:
link to rocketmortgage.com
I was referring to income taxes as the current tax brackets are all going up in 2026. But on property taxes, your fatal flaw is not thinking 4-dimensionallly.
As 12 million people leave the labor force, there will be a dramatic reduction in state income taxes for all those people now “retired” and not earning and paying state income tax. Where is the shortfall going to come from?
It will have to be either an increase in sales tax or property tax or both. The alternative is to cut state provided services which is a third possibility but unlikely as there is too much dependency on government services. Perhaps state income taxes will be raised on everyone else. All I know for sure is states are hungry for taxes and their appetite is insatiable.
The link you provided is broken so I found this one and I picked Florida since it is in the middle between high/low.
link to tax-rates.org
The current median tax is $2756 so I ran the numbers ($230/month).
at 3% inflation, in 10 years the property tax will be $3700 – not bad and manageable.
at 4% @ 10 years it is $4100, getting worse but not toxic.
at 5% @ 10 years it is $4500, getting a bit uncomfortable.
at 7% @ 10 years it is $5400. this starts being painful at $450/month.
But this assumes that Florida or other states don’t raise property tax rates. Is that likely?
But now add up all the other expenses: utilities, maintenance, insurance, HOA, etc and add the inflation at 3%, 4%, 5% and 7% and you will see it all adds up rather exponentially for everything as a whole. We’re talking the doubling of almost all expenses within 10 years or less. If you can handle double the expenses on your current income then you are set otherwise what are you going to do?
If you are young or employed during this time, it’s all fine because you can demand higher wages or get a second, third job.
If you have millions of dollars then you are fine as well because hopefully the investments grow at 8% or higher and offset inflation, these folks will be fine too but the majority of people will be on fixed income and the math won’t work for them. IT WILL NOT WORK.
Some places will be cheaper to live than others so everyone needs to do their own analysis based on their property tax rates, income tax rates, insurance costs, etc. On average it’s going to be brutal for most of the people on fixed income.
And none of this includes exploding health care costs that are totally out of control but that’s another spreadsheet for another day.
You need to show some numbers. Few people will acquire $4M. What are your assumptions?
He’s assuming he will have to pay property taxes on his $14 million Malibu mansion, while living slightly above “poverty level”.
Here are simplified numbers. I spend $2000 maintaining my primary residence right now. That’s the real cost to do all the things I listed above.
For example a roof may cost $20,000 but I only need it every 20 years so that is $1000/year or $83/month. Even though I am not spending $83 out of pocket every month, I know that I will need to have that money when I do need the roof so think of it as forced savings. The same for fences, HVAC, etc. The operational expenses like utilities are real monthly expenditures but adding it ALL up is $2000/month.
If it’s $2k/month now, what will it be in 10 years in 2034?
@3% inflation it’s $2700
@4% inflation it’s $3000
@5% inflation it’s $3300
@7% inflation it’s $4000
So what cost $2000/month today may cost up $4000/month in 2034 in a hopefully extreme example. I don’t know if inflation will stay at 7% that long but we had high inflation from 1972 to 1982. Look at chart on link.
link to fred.stlouisfed.org
The costs above are just for running my house. They don’t include travel, entertainment, food, and other non-house running items. It doesn’t include higher state, property or income taxes beyond the inflation adjustments. And it’s only for the next 10 years. I am doing the math for 30 years and it’s far worse!
No one wants to believe 70s inflation can happen again and that is one very dangerous assumption to make in planning the future.
So let’s say I retired in 1972, right before the “big inflation”. Under your reasoning, a good chunk of the population that retired at that age was living in abject poverty 15 years later, probably resulting in horrible health and earlier death, right? Yet when I go back to 1972 and look at a population pyramid, walking it forward year-by-year to 1992, I see an extremely smooth and growing bucket for every age group above 60. I believe you may need to approach your thinking about this from a differnt angle, because there is no evidence it made a lick of difference concerning people’s lifespans. Some people may have had to cut back a little, but nothing catastrophic that your line of reasoning above infers, at least not that shows up in hard data concerning health or lifespan. The reality is that any income strems these people received adjusted upward with inflation. It is very likely, but I agree not certain, that the same kind of adjustment will happen, one way or another, in the next down cycle.
In the 70s there was plenty of labor to go around. How are 80 million boomers going to get medical care when so many doctors, nurses, etc have retired? How will 80m fly on airplanes when so many pilots, flight attendants, mechanics, catering crews, etc retire? How will 80m drive on bridges and roads when there aren’t enough construction workers to build and maintain them?
That’s what is different this time, in the history of the recorded world, we have never been through something like this where we have 80m dependent on 150m to do all the heavy lifting, NEVER.
I don’t know what is going to happen but my instincts tell me it’s not going to be good. Mother nature has a system where if you don’t work for your own food you die but we humans have, “if you don’t work for food, the government will hand free food to you.”
Many people here say socialism fails when you run out of other people’s money but I think running out of someone else’s labor holds true as well.
I am already tired of having $1000 taken out of my paycheck each month to pay for other people’s retirement. That’s just the money but it applies to work too. It is not sustainable.
“I calculated I need at least $4 million to survive retirement above poverty level”
Do you know what “poverty level” actually means? I’m pretty sure you don’t.
We think of “millionaires” as people who are “rich” but tell me what the purchasing power of $1m will be in 2044. Then you tell me what poverty level means. If you don’t think you’ll be around in 2044 then it’s of no real consequence or issue for you, enjoy the time you have.
I’ll be wealthier in 2044 than today because my investment return rate on my assets is larger than the CPI inflation rate plus my current asset drawdown rate. All my pension income streams, when I begin drawing them, will be gravy, and they are all COLA adjusted on top of it.
Re “ the type of work that needs to be done but no one willing to do it” …. You’re overlooking that you live in a market economy. The cure for tight supply of workers is higher wages. When people don’t want to do a job, either the pay goes up or the work is reshaped to make it palatable, and people change their minds.
If you can’t afford to retire and want to outrun inflation .. find the jobs you don’t mind doing, that no one else wants to do, and you’re golden.
Maybe make it easier for informal/illegal immigrants to work?
Most of the negative impacts from immigration are because of barriers that prevent them from working.
They won’t fill most senior jobs currently held by 60+ people. Others will fill those roles, immigrants will generally backfill the bottom rung of jobs requiring the least qualifications.
Most rich nations that can’t attract and integrate immigrants are truly screwed by demographics.
Most of the negative impacts from immigration, is that they are illegals.
In the next recession boomers and gen X will have less time to recover. Gen Z will get
their stuff for free. All they have to do is save, be frugal and wait.
From what I’m seeing, the 16-19 age demographic is very conservative and thoughtful about their future (I assume due to the pandemic) and don’t tolerate a lot of bs. So between them and AI efficiencies over the next five years, I feel this cohort might very well surprise us significantly to the upside.
A long slow grind has been my working thesis for quite some time, due to the massive debt across the system, unfortunately producing a LOT of angst socially and politically.
How much tax revenue can the government extract from the diminishing income base? The debt increases even as the tax base diminishes. The math says something has to give. (That’s a pun. Thank you.)
GenX salaries started to surge in 2021 and has accelerated since. They have the experience and skills and now they are in very high demand as the Boomers retire. Their net worth has increased the most of all other generations and will increase more. They are a smaller generation than the Boomers so they have the pick of jobs as the Boomers retire. There are exceptions however. If you write code for a living then it might be tough.
Why down vote this when everything he wrote is correct.
As someone in the S/W industry who is one of the oldest Gen-Xers I can say there are still plenty of good jobs in S/W so even that is going to pay very well.
In the US life expectancy is down by 3/4 years. Most Americans are either overweight
or obese. Vascular problems (Avascular Necrosis) degenerate muscles and bones. Those who are at 55/59 are more impaired than the boomers and the silent gen at
the same age. The beyond prime age are more infected. They will be less able to work. They will die faster. The symptoms of their disease will disable them few decades after consuming the standard American diet since birth. Low level inflammation causes boo boos (scar formation) of the blood vessels ==> Band Aids (calicification) covers the boo boos. Impaired blood vessels provide less oxygen to muscles and bones. The best way to stop it is to stop the constant inflammation. Change your food and move your mass. Increase Nitric Oxide production in your tongue to dilate your pipe lines.
This post was a bit truncated because I did not mean to post it tonight. But I just filled in the missing pieces.
I am on the road tomorrow and this was supposed to be my key piece for a few hours so I am more than a bit annoyed at myself for accidentally posting it.
Mish, why did you only consider age 16-19 as replacement age workers over the next 5 years instead of age 15-19 (5 years worth)?
Also, as we all know, many chose college and aren’t working much and at the same time many in the age 20-24 will exit college and begin working. Is the age cohort between 15-19 and 20-24 roughly equal in numbers so that we could expect those going to college to replace those exiting college? Just curious if that makes any meaningful difference numbers wise (ie 1+ million or more).
Because that is the data the census department and BLS have. I would have used 15 it it was available
15 year olds really are not allowed to work by law. Family owned businesses can get away with it, but even then woe unto you if OSHA catches you using a child to do something they think is dangerous.
It’s not about 15 year olds working now. It’s about in 5 years from now those 15 year olds will be age 20 while age 65 workers will be age 70 (and presumably retired).
In other words are there enough new workers ages 15-19 now to replace the workers retiring over the next 5 years.
Black Death killed 1/3 of Europe and they recovered but it took a little while. We’ll be fine. Many basic skills will be lost along with quality but there are going to be some positive things. Legacy media is going to die for starters.
Agree. Nice presentation Mish.
The shortage of workers will persist for years. Particularly the shortage of highly skilled workers. Which is modestly inflationary.
The growing numbers of elderly folks will stress the health system and social security more each year.
There may be a long shallow recession, or it may just be a long continuation of slow growth.
Whatever the future holds though, all we can do as individuals is to make the best of it; because we can’t change it.
Which is my goal every single day. Focus my attention on improving my life.
“There may be a long shallow recession, or it may just be a long continuation of slow growth.”
If you’re not familiar with Russell Napier, you’ll find his predictions interesting, we’re entering our “Japan” phase.
Focus your attention to low debt EM’s, away from higher debt economies.
Agree. High debt levels limit growth. That’s one reason I expect slow growth going forward.
And yes. No matter what the environment, opportunities are always there. EMs are one of those opportunities.
While Dr. Philip George doesn’t acknowledge it, there’s been a “sea-change”. So much for the “Riddle of Money Finally Solved”.
Economists are vacuous. See: BANKS DON’T LEND MONEY (youtube.com) Dr. Richard Werner
Banks enlarge the money stock when they lend/invest. Banks do not loan out existing deposits. Thus, all bank-held savings are lost to both consumption and investment.
The growth of saved bank deposits shrinks aggregate demand and therefore produces adverse effects on gDp. This is what caused secular stagnation.
The ratio of gated deposits to transaction deposits has reversed by 18%.
The current strength in equities, etc., is related to the FED’s definition of retail MMMFs. They aren’t banks as defined. They are nonbanks. Thus, both reserves and the money stock are increasing as O/N RRPs are drained.
Thanks for all that. Now, please explain to me how you are using this knowledge to profit. What is your investment strategy?
Republican solution:
1) Borrow $25 billion to build a Mexico wall
2) Cut taxes on the wealthy so they can create more jobs in Mexico.
3) Complain about the Fed lowering rates as household debt soars due to diminished labor demand resulting in diminished real wages.
4) Complain about domestic spending & entitlements as the sole reason government debt is exploding.
This has worked excellently since 1980, let’s keep it going.
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I people did not die of senescence or old age the actuary tables predict an 800 year life expectancy ended by catastrophe. The causes of senescence are understood for a dozen or so biochemical pathways. Methods to prevent or reverse each pathway are also understood. Better methods are under development. Few believe the science or take the cures. I carefully document my existence because I expect to be questioned after the first two hundred years or so.
Did you forget the sarcasm tag or are you really claiming you’ll live 80 years longer than the oldest documented person?
In this year and in the next 15-30 years, the number of people turning 65 will drop, the number of people turning 50 will increase, and the number of people turning 16 will drop. Baby boomers disappearing, the baby bust takes over and retirement investing explodes, and the low-skill teens who run the strip mall businesses will slowly disappear, along with their high schools.