The first batch of Baby Boomers turned 65 last year, which has caused some to consider what the labour market and the productivity of employees will look like when the elder statesmen of the workforce retire.
Bank of America economists Ethan Harris and Gustavo Reis believe that the decline in work productivity witnessed in the 1970s was due to the entrance of the Baby Boomers into the job market. With an excess of young and unexperienced workers landing their first jobs, BofA believes that this combination led to a lack of performance while at work. The assertion is logical, as building up skills and getting familiar with a job takes decades to master.
With the Baby Boomers set to exit in a big way, a similar situation could arise in the coming years. With a rash of younger workers seeking employment combined with the Baby Boomer’s retirement, declining productivity could become an issue for prospective employers.
From Bank of America’s note to clients:
“By 1969, Baby Boomers made up the entire youth labour force and the entrance of these new workers into the labour market was at least partly responsible for the decline in productivity witnessed during the 1970s, in our view. Now that these workers have built up a lifetime of skills and are planning to exit, albeit with some delay, they will be replaced with younger, less productive workers.”
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