Yesterday, the United States celebrated Labor Day. According to the United State Department of Labor, “Labor Day … constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.” Each year, fewer of those workers are baby boomers, as millions of the cohort have retired in recent years.
With the aging of baby boomers, we see three labor force trends.
Decline in labor force participation by people 55+
Between the fourth quarter of 2007 to the fourth quarter of 2013, about 5.5 million more people retired. Business Insider reported this as a 16% increase. Despite this, the publication notes, “the labor force participation rate for those 55 years of age and over has only been falling for the last year, whereas the total labor force participation rate has been falling for over five years.”
About 76% of those leaving the workforce in 2013 last year represented people over age 55 who say they don’t want jobs, the Labor Department estimates.
“Arithmetically, the Boomers will keep pushing (participation) down done for another 15 years,” said Dean Maki, economist at investment bank Barclays.
Rising 55+ entrepreneurship
Many of the baby boomers who are “retiring” may actually be redefining employment by starting their own ventures. Their age group (born 1946-1964) has had the largest increase in entrepreneurial activity over the last decade, per the Ewing Marion Kauffman Foundation. A 2011 study by Civic Ventures found that 25% of Americans ages 44 to 70 were interested in starting businesses or nonprofit ventures within 5 to 10 years.
Encore careers – a match made in economic heaven?
Boomers are also pursuing new jobs, whether full- or part-time, often called “encore careers.”
Non-profit organization Encore.org reports that boomer interest in encore careers rose 17% between 2011 and 2014.
“More than 25 million Americans 50 to 70 years old are eager to share their skills, passions and expertise in encore careers that address social needs, typically in education, health care, human services and the environment, according to a 2014 study by Encore.org and Penn Schoen Berland. Of this larger group, more than 4.5 million, or 6 percent, are already working for social impact. Another 21 million are ready to join them, nearly six in ten within the next five years.”
Why should boomers want to try a second act, a new chapter in employment? As we noted in a 2012 post called “Re-Thinking Retirement: 6 Lessons For Marketers,” “Work during retirement provides a paycheck … and much more.”
Baby boomers pursue these encore careers for a mix of reasons, primary among them a sense of purpose. Meeting financial needs and/or earning enough to maintain their lifestyle are also important.
Now that the Labor Day cookouts have ended, and we’re all back to work (sigh), marketers should consider what impact these trends will have on boomer lifestyle and purchase decisions. Then apply those insights to your marketing program. You’ll find your own labors become more effective.