What Will Save Us from the Great Depression?

World War II pulled us out of the Great Depression. What will save us from the Great Recession? Maybe the baby-boom generation. If that giant bulge of humanity retired en masse, it would clear the decks for the younger generation--much like the Black Death cleared the way for the Renaissance by greatly reducing the supply of labor in the Middle Ages and driving up wages. Unfortunately, boomers do not seem to have retirement in mind. According to a new analysis of the retirement intentions of workers aged 50 or older, the Employee Benefit Research Institute finds most regard retirement as a distant dream. The largest share of workers (31 percent) say they will never retire or do not know when they will retire. Another 27 percent say they will stay in the labor force until age 70 at least. Overall, the age at which at least 50 percent of boomers expect to retire lies somewhere between 70 and 75. That's a long time to wait.

Even before the Great Recession clobbered us, the Bureau of Labor Statistics employment projections showed that two out of three job openings for the coming decade would be due to replacement (i.e. retirement of existing workers) rather than economic growth (new jobs). The economic slowdown of the Great Recession means an even larger share of job openings now depend on the retirement decisions of the baby-boom generation.

Source: Employee Benefit Research Institute, Retirement Age Expectations of Older Americans between 2006 and 2010, Notes, December 2011