2/17/2007

Working Past 65

In a recent article "Economic growth means working longer" by Heather Scoffield it points out that in the next few decades people will have to work longer in order to maintain economic growth. Alan Greenspan the former US Federal Reserve chairman spoke of this topic to a group of businessmen in Toronto. This article mentions that we are at the cutting edge of technology and because of this; it is hard to have big growth because of technology. The next place to look for economic growth is to have more workers working. This is not a possibility because the baby boomers are in the workforce right now and the population growth is dwindling. The only answer to maintain economic growth is to work longer. Is Greenspan being a little pessimistic or is this something that the younger generations should start to look forward to? Are those of us entering the workforce going to be working until we are 70 or 80 years old? People are starting to live longer, why not work longer? This to me seems a little pessimistic. I believe that we as a human race will always find ways to be more productive. Technology, although we are right on the cutting edge, will still continue to improve and to help maintain this economic growth. That will be supplemented by more efficiency in the work environment due to learning curves and the struggle for people to get more for less. I think people may choose to work longer and this will be part of the economic growth, but I do not think it will be a consequence.

6 comments:

Kate said...

Where did the age of 65 for retirement come from? Was it a scientific age where a person becomes useless or was it an age where individuals were able to be inducted into the club, “I’ve worked for long enough”? Without jest, there must be assumptions that were made when setting the age for retirement that were not correct. It could be a decline in the birth rate or an increase in the average lifespan or the unexpected arrival of technology. Never the less, there should be some adjustments to the assumptions.

The wall that we seem to be hitting now is the puppy pattern. Once a puppy is allowed to sleep in the house, a change to sleeping outside will bring pain to the owner. The puppy will wine, bark and paw at the door incessantly. Even if the assumptions are looked at and the retirement age is adjusted, will we be willing to wait it out and not open the door?

TR said...

As we can see people are already working longer. I don't think that people working longer is pessimistic. I feel that it is a greater opportunity. If I retire at an early age I am therefore contributing nothing to the world. If I stay and work as long as I want I am making a contribution. This alone is a positive thing. I also think that we should be expected to work longer, because we are living longer. It only makes sense. The generations before us worked to a younger age, but also died at a much younger age. If we expect to help out the retired now there is no way that we can continue to retire early.

mason said...

I don't necessarily agree with TR on this one. Just because someone is retired does not mean that they are not contributing to society or the economy. Retirement is what many people prepare for all of their lives. We make a retirement plan by putting money away, paying of debts, housing, and investing. If any thing, technology has made it easier to retire and still contribute to society. This is what stock and shareholders are for. The whole idea of retirement is to enjoy what you have created and accomplished in life. I can't wait until the day I retire. If it happens to come earlier, even better. This is why I am planning and working hard now, I want to create such opportunities for me and my family

mason said...

It should be "paying off debts", not "paying of debts". Sorry.

Dr. Tufte said...

Good catch, Mason!

I did a paper on this at the UCESP conference here at SUU in the Fall (hooray for me ;)> ).

Generally, you have to save or accumulate wealth proportional to about 1/3 of your income each year in order to retire: 40 years of work and 20 years of retirement.

The problem is that we're a lot surer of the 40 than of the 20.

What if your retirment is a lot longer than you were planning? Here's the rub: longevities are increasing very quickly. This means that for most of us our working lifetime is increasing rather quickly as well.

I hate to admit it, but I'm (kind of) planning on working until I'm in my early 70s.

Jacob said...

I definitely agree with Mason on this one TR. I am hoping to retire early. My motive is so that I can contribute more to society. I know many retired people that are significantly contributing to society. I also agree with Bend, that our society will likely continue to develop technologies that will enable economic growth and also allow people to retire at younger ages. That is an interesting article.