Sunday, December 23, 2007

Baby Boomers

AC - Speeches by Management (Project II)
The Technical Speech
December 21, 2007

Imagine it is January 2030. You are so happy because it is your payday. You open your paycheck and were surprised to see a few hundred dollars less. You rush to the pay roll department and tell your payroll manager "Bob... there is something wrong here. You've deducted more for Social Security". Bob turns away from his colorful LCD monitor and tells you "Hey... starting this year, you owe more to Social Security. Haven't you heard about baby boomers? They all have retired. You have to work hard ... to support them". You get disappointed and frustrated.
Yes. In about 22 years, all the baby boomers would have retired. We have to pay more to social security to support them. What are these baby boomers going to do with that money? Well, they are going to spend it. That is good for the economy ... isn't it?
In the next 6 minutes, you are going to learn more details on "Who baby boomers are", "When are they going to retire", "What is the impact of their retirement"?
Who are baby boomers?
The baby boom generation is a demographic term for the population born between 1946 and 1964 - right after the Second World War. Baby boom is the reflection of the sudden removal of social and economic pressures that kept people from starting families.
U.S. census estimates that the group that holds the “boomer” title is made up of about 80 million individuals. Does anyone know the total US population? It is 300 million. About 1/4 of them are baby boomers.
When are boomers going to retire?
Casey-Kirschling — the nation's first boomer was born in Philadelphia on Jan. 1, 1946. Casey-Kirschling won't bankrupt the Social Security system by her early retirement at 62. But the 80 million Americans who could qualify for Social Security during the next 22 years are sure to bankrupt the system. The first wave of 3.2 million baby boomers turns 62 next year at the rate of 365 an hour. This means 3.2 million boomers are eligible for retirement next year.
The Boomers' Impact
The imbalance between workers and beneficiaries didn't happen overnight. In 1945, a decade after Social Security was created, there were 42 workers paying into the system for each retiree. Today, there are 3 paying for one retiree. By 2030, "Every couple will have their own retiree to support"
As millions of baby boomers approach retirement, the program's annual cash surplus will shrink and disappear. Social Security will not be able to pay full benefits from its payroll and other tax revenues. It will need to consume the general revenue dollars to meet its obligations--money that now pays for everything from environmental programs to highway construction to defense. Eventually, the government has to either slash benefits or cut down on the spending to accommodate Social Security.
When more and more boomers reach retiring age, the number of younger workers, those aged 25-44, will actually decrease. There will be a shortage of qualified workers especially for service jobs.
Optimist's View
Well ... Though there a number of factors to worry about... there is also something good about the retirement of baby boomers.
A sharp rise in the number of wealthy older people will likely have an impact on the demand for several types of consumer goods or services, such as health care, travel and luxury products. The next decade or two will probably be boom times for philanthropy. Colleges and other nonprofit organizations looking for large donations may want to turn up the heat on fund-raising efforts that target this older group.
Baby boomers presently make up a lion's share of the political, cultural, industrial, and academic leadership class in the United States. Baby Boomers are definitely going to make a dent in our earnings. At the same time, they are also leading a consumer and workforce revolution that is changing the way we do business. Though boomers retiring in the next few years would cause more burdens to the economy, it would also increase the consumer spending to a great extent.