Saturday, November 20, 2010

The Boomers’ Last Hurrah

The first of the 78 million baby boomers will reach 65 years of age in just six weeks – a milestone that will be celebrated again and again over the next 20 years by the remaining boomers.

Boomers are the cohort of people born between 1946 and 1964. Their parents endured the Great Depression and fought World War II either in uniform or on the industrial front. The war put their lives on hold, and when it ended in 1945, one in eight Americans – 16 million in all – was in uniform and half of them were in 55 combat theaters around the world. Their goal at war’s end was to resume a normal life as soon as possible. Among other things, that meant getting married and starting a family. They succeeded at both more than any previous generation.

In the depression decade prior to the war, families produced an average of two children. But in the years following the war, family sizes jumped almost immediately to three and peaked at 3.8 children in the late 1950s. Average family size would not settle back to the pre-war level until the early 1970s. US population increased 44% during the 20-year span of the baby boom.

The baby boom became a veritable “pig in the python” as it has moved through the various life stages of society to the present. When the firstborn boomers reached school age, it started a school building boom. About 45% of all public schools were built between 1950, when the oldest boomer was four, and 1969, when the oldest boomer was graduating from college and the youngest was entering kindergarten.

Up through the years of WW II, only 5% of the population aged 25 or older had a college degree or higher and only 25% had graduated from high school. By 1980, high school graduation rates were 67% and 27% of boomers had college degrees or higher. Baby boomers enjoy a higher level of education than any generation before them.

Boomers began entering the workforce from the mid-1960s through the late 1980s. Mostly well-educated, they created a boom in white collar jobs, fed the transition from a manufacturing to a service economy, and with the advent of the PC in the 1980s, boomers virtually eliminated middle managers using PC networks to access business knowledge and facilitate intra-organizational communications – the functions once provided by middle management.

Baby boomers represent about 28% of the population but about 45% of the workforce. The good news is that their Social Security payments enabled the program to take in considerably more than it has paid out during the boomers’ working years. The bad news is that politicians used the Social Security Ponzi scheme to spend surplus funds on unrelated government excesses in the true spirit of Bernie Madoff. The boomers have substantially supported the expansion of the New Deal-era Social Security, which has paid their parents’ retirement, and the Great Society-era Medicare, which has provided them healthcare.

As the “pig in the python” approaches 65, what’s next? Retirement? Don’t count on it.

The age of 65 as the milestone age for retirement was conceived by Otto von Bismarck of Germany in the late 1800s when old Otto was conniving to find a way to combat the German Socialist Party. He created a social security system to appeal to his country’s working class but being the ethically-challenged politician that he was, Bismarck knew his program would cost very little. The average German worker of that time never lived to age 65, and the few Germans who did only lived a year or two beyond.

One of Bismarck’s most ardent American fans, Franklin D. Roosevelt, saw the gimmickry in the German social security system and thought, “That’ll work,” when he fobbed off the Social Security Act of 1935 on Americans whose life expectancy was then 61 years. In the America of 1900, life expectancy was about 50. Recently it’s about 78. Either Roosevelt couldn’t conceive of people living well beyond 65 – the upward trend of life expectancy during the century notwithstanding – or he got it and decided it was a problem for a future generation of politicians to wrestle with. We don’t know.

But life expectancy has exceeded 65 since the end of WW II (ironically helped by WW II) and people will shortly be living 15 or more years beyond that age. Centenarians now constitute the fastest-growing segment of the U.S. population, increasing in number from 3,700 in 1940 to roughly 61,000 today. The Census Bureau projects that one in every nine baby boomers (nine million of the 78 million people born between 1946 and 1964) will survive into their late 90s, and that one in 26 (or three million) will reach 100. And Census projects life expectancy to rise to 86 by 2075 and to 88 by the end of the century.

Since Roosevelt set by fiat the retirement age at 65, that age has gotten younger with each generation for three primary reasons: improved public healthcare delivery, less dangerous and debilitating working environments, and healthier lifestyles.

The killer diseases of children and young adults, for example, have been all but defeated. Non-invasive scanning has eliminated exploratory surgery and helped detect disease before it becomes unmanageable. Drugs control cholesterol and hypertension. That Americans have the best healthcare delivery in the world is an unimpeachable fact. It has contributed to longevity more than any other factor.

As work shifted from manufacturing to services and knowledge – from the shop floor to the offices – jobs became safer. They also caused less “wear and tear” on the body during a person’s work career, so people weren’t compelled to retire around the age of 65 because their bodies were broken down as happened to earlier generations.

The third contributor to longevity – lifestyle – has a bright and dark side. The bright side is that we know unhealthy lifestyle practices – smoking, excessive alcohol, diet, and inactivity – contribute to increased morbidity and shorter life spans. The darker side is, while smoking, and to a lesser extent alcohol consumption, have been on the wane, exercise and diet management in recent times have been going in the wrong direction. Obesity is becoming a major health problem, especially among the older cohorts of Americans who are less inclined to exercise regularly. Unless exercise and weight management begin moving in a positive direction, the gains in longevity will slow down.

Most of the advances in longevity have been due to preventing premature causes of death. There’s little evidence that maximum lifespan has been increased because no one knows what it is. (The bible suggests in Genesis 6 that it’s 120 years.) As the causes of premature death are eliminated, the health status of older people will improve, shortening the duration of morbidity near the end of life. In other words, instead of a long descent of chronic bad health prior to death, punctuated by episodes of acute crises, people will live (more or less healthily) until they die.

It seems safe to say, therefore, that 65 is no longer the demarcation of a major change in a person’s life. Nor does a longer lifespan mean an extended period of life lived in diapers, dependent on three shifts of caregivers to push us around in wheelchairs while warehoused in a nursing home inhabited by zombies. Boomers were a rebellious bunch in their teen years, and I predict they won’t go quietly into retirement. If anything, they will reinvent what retirement means.

For one thing, many people will choose to work past 65 and indeed into their 70s. If you enjoy what you do, why would you stop doing it, assuming that you’re physically able to continue? Conversely, why would a person spend a career doing something that they can’t wait to stop doing so they can do something else?

The more educated people are and the more successful their careers are, the more likely they will continue working for many years beyond 65. After a career with one company, some people leave to start a second career in volunteer work, or consulting, or to start their own business. Colonel Harland Sanders, at age 65, used $105 of his Social Security check to finance the launch of his franchise venture for Kentucky Fried Chicken.

The notion of a golden age of leisure following a career of work is heavily glossed by the values of society in the mid-20th century when work was physically demanding and often as intellectually stimulating as reading the Manhattan telephone directory. In the late 1950s, a third of the jobs were in manufacturing and one-third of those jobs required union membership. But unions won guaranteed pensions and Social Security pitched in a tranche on top of those pensions, making retirement at 65 or earlier an economic no-brainer. The work was awful but the retirement was great.

Research into the post-retirement years, however, paints a darker picture. Today’s retirees held good jobs in service industries and knowledge work. Usually those jobs carried considerable responsibility and were important to the success of their companies. In retirement, these same people watch a mind-numbing 43 hours of television each week. One-third of those recently retired return to some kind of work within two years citing sheer boredom. Health status often declines after retirement due to idleness, loneliness, depression, alcohol consumption, weight gain, and marital stress. The suicide rate spikes among the newly retired. On balance, the golden age has been grossly oversold.

The Genesis story of mankind’s creation has them made in the image of God and put in a garden with instructions to care for it by working in it. From the beginning mankind was made to work and create. He was not created to relax and be served. And because mankind was made in God’s image, it must be God’s nature to work. Indeed, the Genesis story has God resting after He has worked.

The thing that makes vacations and travel and weekend homes fun is that they aren’t the norm. They are exceptions – a break from a routine to which we will return. When the exception becomes the norm it’s no longer an exception. Retirement into perennial vacations and constant travel and permanent stays at weekend homes causes them to lose the attraction they are intended to have.

The baby boomers have changed every institution in society that they’ve touched. I expect them to do the same with retirement by redefining how to live it.

That will be their last hurrah.

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