April 22, 2008 The Baby Boomers Are Coming!
There is no question that the baby boomers are beginning to reach retirement age. Over 300 Americans turn 60 each hour of the day. So what does this mean? Should we fear the increasing over 65 population and the potential costs this will create for government? John B. Shoven, an economics professor at Stanford recently explored the potential affect this aging population could have. Shoven (in a recent article published by Foreign Policy) writes:
There is a looming catastrophe stalking the developed world. It promises to devastate the global economy, overwhelm hospitals, and decimate armed forces. What is the calamity that promises such misfortune? Not a killer virus, deadly terrorist attack, or natural disaster. It’s the aging of the world’s baby boomers, the coming tidal wave of senior citizens who will live longer, consume more, and produce less, seriously challenging societies’ ability to care for their graying ranks.
This is the sentiment that is presented by a number of policymakers. However, Shoven argues that the way we measure age is flawed. Specifically, a 65 year old today is not the same as a 65 year old a few decades ago. In fact, according to Shoven’s numbers, a 65 year old man in 1940 could expect to live 11 more years. Today a 65 year old man has a life expectancy of another 17 years. Or a 65 year old today is the equivalent (according to mortality rates) as a 59 year old in 1970.
Does this mean we should up the retirement age? I’m not necessarily advocating that…but this does add an additional factor to our discussion of dependency ratios and aging demographics. While it is true the baby boomers are coming, it sounds like 65 may soon be the new 55.