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The Big Changes Ahead for Boomer Workers

Disruptions will be enormous, but so will opportunities

By Richard Eisenberg

Boomers and Gen Xers: Your working world is in for major disruptions between now and 2030, according to a new report from the management consulting firm Bain & Company. “The depth and breadth of changes in the 2020s will set apart this transformation from many previous ones,” said the report, Labor 2030: The Collision of Demographics, Automation and Inequality.

Boomer Workers
Credit: Adobe Stock

But here’s the bigger surprise: Some of those disruptions will make it easier for people in the 50s and 60s to keep working, find jobs and start businesses, the Bain forecasters say. Now that’s a noteworthy trend.

Hanging On to Older Workers

The main reason for the good news, according to the Bain experts, is that the abundance of labor seen since the 1970s — due to boomers and women entering the workforce — is winding down. Bain foresees labor force growth in the U.S. slowing to 0.4 percent a year in the 2020s. With workers in shorter supply, the Bain analysts say, employers will be eager to hang on to the ones they have and entice applicants, including older ones, to join them.

“Baby boomers will remain an important pool of talent through 2030, when the youngest cohort of that generation will only be 66,” the report said. This view echoed what I heard last May when I asked futurists Katherine LY Green, of Green Consulting Group, and John Mahaffie and Jennifer Jarratt, founders of Leading Futurists, what they expected for older workers in the coming decades.

Companies looking to innovate and scale within their businesses “will often find that skill among workers who’ve been around the place awhile,” said Andrew Schwedel, a partner in Bain & Company’s New York Office and head of the firm’s Macro Trends Group, which published the study.

More Flexible Employment for Boomer Workers

“The war for talent” means companies will be innovating like crazy to make compelling offers to workers,” said Schwedel. He anticipates not only more demand for flexible work arrangements from employees and job applicants, but more need for a flexible workforce in general.

To keep older workers, there may be “more opportunities to retool your skills, and maybe even a new generation of employee benefits,” said Schwedel.

Also, the Bain report said, “as competition talent increases, standard employment offers may disappear.” Companies offering an identical package to the three generations of the labor force in the 2020s could “be vulnerable to poaching from employers willing to make more focused offers” with a custom blend of compensation, benefits and hours.

Whither Age Discrimination?

Age discrimination by employers, Schwedel said, won’t disappear, but it will change. “You may not see employers offering older workers traditional employment. We’ll be seeing the rise of more part-timers and independent contractors.”

The ability to work longer will be a huge help to many Americans in their 60s without enough retirement savings to let them live out their longer lives in comfort. Bain’s dire view: as things stand now, only about the top 20 percent of older households are likely to have enough savings to support a traditional retirement. The Schwartz Center for Economic Policy Analysis just came out with an even gloomier report, saying that 40 percent of older workers and their spuses will be “downwardly mobile” in retirement.

Inequality Among Older Americans

One big question, Bain says, is whether people in their 60s will physically be able to keep working.

“If you’re well-educated, and high-income, you will probably manage to keep working into your 70s if you want,” said Schwedel. “But if you’re blue-collar, with less than a high-school education and health problems, you’ll have a tougher time.”

The bottom 40 percent of older households “may see their income and workforce participation decline due to health reasons,” the Bain report said.

What About the Robots?

And those robots we’ve been told will be coming to take our jobs? Automation may be reason to worry for many, but it could possibly spell opportunities for your career, and for your investment portfolio.

Bain believes the rapid spread of automation may eliminate as many as 20 to 25 percent of current jobs — equal to 40 million displaced workers. Hardest hit: workers currently making between $30,000 and $60,000 per year.

“But some people will benefit” from automation, said Schwedel.

The Good News for Entrepreneurs

For example: entrepreneurs. “Automation will make it much easier for a small business to access scale in ways it was hard to do in the past,” said Schwedel. “You can rent from Amazon Web Services, use UPS to do your logistics and hire to run your sales.”


The report also noted that now “entrepreneurs can use social media postings, targeted search engine ads and email newsletters to launch businesses at a fraction of the marketing budget previously required.

Other beneficiaries from automation, said Schwedel, are “people in managerial roles requiring professional expertise and who have the ability to work with new technology and use it to increase productivity — like data scientists.”

Similarly, “if you are a financial adviser, automation will dramatically increase your productivity, it won’t necessarily eliminate your job. The financial adviser industry has not found it economical to serve clients with smaller portfolios, but it will become more economical when technology extends their reach.”

Opportunities for Investors

That could also be good news for the many middle-income Americans who want financial advisers to help manage their money but are often snubbed.

“From a micro standpoint, anything related to automation will generate investment opportunities,” said Schwedel. Bain forecasters see four types in sectors such as energy, health care, aerospace, retail and infrastructure:

1. Core platform providers providing the essential enabling technologies for the next phase of automation. They include “the physical building blocks, such as high-dexterity robotic hands” and the “analytical or control building blocks, such as machine learning systems and the application program interfaces that go with them.”

2. Systems integrators combining the building blocks to create function systems by assembling sophisticated hardware and software components in one integrated package. Think drones that drop off packages.

3. Businesses that figure out how to adapt automated systems to discrete uses. Example: delivering a package to a customer’s house.

4. The collateral infrastructure that enables new automation systems. Bain believes this may be nearly half the total investment that the next phase of automation will require.

Why Higher Taxes May Be Coming

One more thing the Bain forecasters say may be on the horizon: much higher taxes. That’s because there’ll be more older Americans requiring government benefits such as Medicare and Medicaid and fewer younger Americans working and paying taxes.

Tax increases of 15 to 25 percent per U.S. worker by 2030 “could be required to offset changing demographics and inequality,” the Bain report said.

“We’re not prescribing policies,” said Schwedel. “We’re not saying whether taxes should go up or by how much or what type.”

The researchers just believe taxes may go up if trends play out the way they expect: lower economic growth, surging health care costs, rising income inequality, lagging wages, a cyclical downturn in the second half of the decade, a decline in interest rates and major job displacement. An alternative scenario if those trends come true: increased government benefits.

Photograph of Richard Eisenberg
Richard Eisenberg is the former Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and former Managing Editor for the site. He is the author of "How to Avoid a Mid-Life Financial Crisis" and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS MoneyWatch. Read More
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