The Silver Tsunami Makes Landfall on the Labor Market
By: James Flippin · May 16, 2023 · Reading Time: 3 minutes
The corporate world is witnessing a seismic shift as a wave of baby boomers are beginning to retire.
Though surpassed by millennials in 2020, baby boomers were the largest living generation for decades. Because of this, baby boomers have held a large share of jobs across the economy. Now, as they begin to trade in briefcases for beach bags, companies are grappling with the reality of a shrinking talent pool.
Labor Pains Ahead
According to projections from the Congressional Budget Office, the potential labor force is expected to grow by just 3.6% between 2022 and 2031. This growth rate is a mere fraction of the growth seen in the 1970s, when baby boomers entered the workforce en masse.
The 1960s saw a labor force explosion of 17%, followed by 19% in the 1970s. The forecast for the current decade is comparatively tame. What’s more, the growth rate is expected to decelerate further to 2.9% in the decade to come.
In other words, today’s tight labor market may be due to more than just the Great Resignation. If those projections are correct, employers could face decades-long stagnation in the job market. Even as younger generations come of working age, the labor pool might barely ripple compared to the wave of previous years, leaving companies to face an era of talent scarcity and increased competition for qualified candidates.
The Silver Lining
As this wave of retirement unfolds, the fight for talent will intensify. Companies will need to up their game in terms of benefits and working conditions to attract a sufficient workforce. Younger workers may also find the corporate ladder less crowded, leading to accelerated promotions as their senior counterparts step down.
This competitive landscape may mean a transformation of the labor market for employers and employees alike. And for the younger generation of workers, more opportunity and benefits could soon wash ashore.
Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.