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Baby Boomers, not Millennials, are responsible for the labor shortage

The pandemic spurred many Boomers to retire — some early

… data dispels the “lazy Millennials” meme

The myth seems so simple for those who opposed the pandemic economic response: That money went to lazy Americans who do not want to work.

The difficulty with that myth is that economists have access to data that dispels it.

From the research, the data suggests that many Baby Boomers were forced into early retirement by the pandemic, and consequently, they had to take their money and run.

Worse, they do not want to return to the market.

Here is the data

The story was easily dispelled,

One of the more insidious myths making the rounds this year was that young people didn't want to work because they were getting by just fine on government aid. People had too much money, went the narrative from a handful of politicians and pundits.

Here's the thing: Early retirement — whether forced by the pandemic or made possible otherwise — is having a huge impact on the labor market. And data show that retiring boomers, far more than "lazy" millennials, are the biggest force behind the labor shortage.

People have left the workforce for myriad reasons in the past two years. But among those who have left and are least likely to return, the vast majority are older Americans who accelerated their retirement.

Last month, there were 3.6 million more Americans who had left the labor force and said they didn't want a job compared with November 2019. A whopping 90% of them were over 55.

Allison Morrow, “The data that shows that Boomers are to blame for the labor shortage,” CNN Business, December 18, 2021

Three and a half million left the workforce last month and 90 percent were Boomers? Why do we not hear that story?

Why have/are Boomers leaving the market?

No one reason can be given for this phenomenon, but a number are listed,

There are few reasons why this is the case.

The strong stock market and soaring home prices have given higher-income people, especially Boomers, more options, says ADP Chief Economist Nela Richardson.

The nature of the pandemic means the risks of going to work are higher for older people.

Employers aren't doing enough to lure people out of retirement. They're creating jobs, just not the ones people want.

Key quote: "I can want a 65-inch TV for $50, but it doesn't mean there's a TV shortage, it means I'm not willing to pay enough to get somebody to sell me a TV," says Aaron Sojourner, a labor economist and professor at the University of Minnesota's Carlson School of Management.

Allison Morrow, CNN Business, December 18, 2021

Bringing people out of retirement

Okay, I returned to work this year, part-time, and I am enjoying it because I never have to leave my room. Online jobs are plentiful, and this one is pleasant.

However, businesses are not trying to lure retirees back to work, and that is challenging — unless the company is willing to pay for it,

There are signs emerging that the labor shortage is easing.

First, retired people are starting to come back to work. The "unretirement" rate fell to just over 2% early in the pandemic, but in recent months has ticked up to around 2.6%, according to Nick Bunker, an economist at Indeed. That's still off from the pre-pandemic rate of around 3%.

Bringing people out of retirement might sound cruel, but it's not always the case — some people retired not because they wanted to stop working but because it was too risky to work in a pandemic, or they couldn't find a job in which the benefits outweighed the risks.

Another glimmer of hope for hiring managers: FedEx, which said the labor shortage cost it $470 million in its most recent quarter, says the outlook for staffing is improving.

FedEx said it is getting a good response from its current hiring efforts, given its current pay package and other offerings, such as an app that provides employee-friendly, flexible schedule options. In the last week alone, it got 111,000 applications, the highest in its history, and up from just 52,000 during a week in May of this year.

Allison Morrow, CNN Business, December 18, 2021

So, now you know the truth.

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