Booming Workforce
For some time now, we’ve been warned about a demographic time bomb otherwise known as the Baby Boomers, those who grew up in Australia post World War II, during the 1960s and 1970s.
The fear has been that an ageing population will have ramifications for health and welfare, aged care, immigration and social policies, not to mention distort Australia’s non-working population – just as they increased its working population in their youth.
Yet the opposite seems to be happening, with the retirement – or should we say non-retirement – of this generation now the talking point among media commentators.
An article published in the Weekend Australian suggests market forces are sending Boomers back to work to resurrect their superannuation nest eggs.
This is certainly true for a large part of the population.
The latest data on superannuation returns from Chant West shows the typical Australian fund posted its worst return in the third quarter of this year since the bankruptcy of Lehman Brothers.
Those who were relying on their pre-GFC super balances were given a rude awakening when the domestic share market suffered the wrath of global toxic debt and caused a shakedown of tectonic proportions. They have continued to watch in despair as funds have struggled to navigate the various hurdles thrown at them since, the most recent being the US and European debt crises.
In fact CoreData’s own research on pre- and post-retirees found one in three people did not believe they would have the ability to choose the data of their retirement and would be forced to work as long as possible – no doubt a reflection of the fact that they feel their future income is at risk.
In addition, 86% of pre-retirees intend to continue working once they retire from full time employment, with around half (52%) planning to work part time.
However that’s only part of the story. The truth is, there is a cohort of the population that plan to keep working, not because they have to, but because they want to.
These individuals tend to be higher net worth, many of them small to medium business owners, and for them, the thought of stopping work is simply unfathomable.
The luxury of choice is something that is oft reserved for the rich, and this data bears that out.
While this trend may help smooth the anticipated distortion in the employment market, unfortunately it will do little to help ease the burden on health and aged care.
5 Comments on “Booming Workforce”
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OB says:
As a qualified accountant, with many years of experience including senior management, I found myself unemployed at the ripe old age of 55. After applying for literally hundreds of jobs, it dawned on me that nobody really wants to employ “older” people, particularly when the sweet young thing at the PA is younger than your daughter.
That leaves self employment as the only option, and now I am at the ripe old age of 65, I still get that feeling that some younger members of the workforce vaguely resent having to rub shoulders with older members in their profession. Such is life!
DT says:
I wonder if this phenomenon is to the same extent for countries with similar demographics? Perhaps thsi has been compounded by Asutralian investors having, what Im told is the highest proportion of retirement savings allocated to equities, in the world.
Nathan says:
I think its a bit premature to say that the expected problems are not emerging. The demographic issues are only just beginning as the first of the baby boomers reach age 65. Short term the expected immediate term effects may have reduced, but long term the challenges remain. Just like market performance, this isn’t a short term issue so let’s not reduce it to one.
Cammo. says:
Not surprising really, after 40 plus years of working, you can afford to retire but you don’t, Baby Boomers are so tied up with their work that is has become their life, while the young ones can’t wait to see the back of us so they too can have opportunity, we continue to be a blockage. I think it is fear of being bored and not having a some one to rely on you to get the job done, I love my job, but I am time poor…Baby Boomers want it all.
LT says:
With a large proprotion of people unable to fund their retirement it seems inevitable that they will have to delay retirement or return to work. For the wealthy who enjoy their jobs it makes sense to keep working if they are paid well and the hours are flexible, but for those who don’t enjoy their jobs and are paid badly going back to work is sure to leave a bitter taste in their mouth!!