At a Glance
- Roundtable discusses the rise of autonomous vehicles and its effect on the future workforce
- Younger generations are entering the workforce at a slower pace than baby boomers are exiting
The U.S. Baby Boomer generation is retiring, and many are without enough savings. In the years ahead, consumption demand from the baby boomers will be slowing sharply from when they were making money and taking on debt. This will have a big impact on the U.S. economy.
Younger generations are entering the workforce, although in numbers not quite as large as the departing boomers. Younger workers increasingly have a heavy burden of student debt with which previous generations did not have to cope. This means that they will marry later, have kids later and buy a house later. As they enter their thirties and start making more money, we may see a sustained rise in starter homes sales, and signs are pointing that way already.
But the bottom line for the U.S. economy is that the younger generation will not be able to pick up the slack of the retiring boomers until the latter half of the 2020s. In the meantime, U.S. potential real GDP is more in the 2% – 2.5% range rather than the 3%+ it once was when the boomer generation was in their prime working age.
Unfortunately, there is little monetary or fiscal policy can do when faced with the headwinds of demographic patterns.
Watch Angie Miles, Jim Iuorio, Blu Putnam and Erik Norland discuss how demographics and technology are shaping the future economy in the video above.