During the Great Depression and World War II many Americans delayed marrying and having children because of the poor economy. The number of marriages and births soared after the war. Many older couples who had delayed having children began having them when the war ended. This increase in births among both younger and older American couples created the Baby Boom Generation. This large group of people born in the U.S. from 1946 to 1964 amounted to 76 million children. Those born during this time make up approximately 36% of today’s population (Deutsch). What impact has this had on the economy? Read on to see how the baby boom generation has affected the economy and what will happen as they retire.
This generation has had a huge impact on the economy due to its sheer size. At first there was a crunch at hospital maternity wards. When the boomers reached school age, schools became overcrowded, forcing towns to build additions. By the time they were entering senior high the cities and towns were expanding. New office buildings, hotels, apartment complexes and stores were springing up everywhere. When they reached college age, American Higher Education had to expand. Large enrollments along with inflation pushed college costs higher. When they started families of their own and became homeowners it drove real estate prices up. As they passed through the life cycle, these shortages soon became surpluses. An example being the collapse of the real estate market in the late1980’s (Sullivan). We can expect a large demand for retirement housing, elder care and finally the funeral industry as the Boomers continue their life cycle.
Marketers have followed the boom generation for decades, producing items that appealed to them as children, teens and young adults. With more money in their pockets than time on their hands, today’s baby boomers are dining out at an all time high. Now it is people over the age of 40 who have the resources to purchase big-ticket items. Today the engine that is driving our economy and our stock market is due to the lopsided demographics present right now. The coming of age of discretionary spending is allowing people to buy that SUV, boat, computer, etc that would have been put off in the past (Income). The economy is sensitive to the Boomer generation’s desire for a luxury lifestyle. As they look toward retiremen...
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...grams for children, while a new state agency was created to represent the needs and concerns of older citizens.” (Sullivan).
The baby boom generation has had a profound effect on the American economy at each stage of their life starting with the demand created for goods, then filling the labor market. Now we’ll have to wait and see if their retirement will cause the doom predicted by some or create the marketplace godsend predicted by others.
Buchner, Gail. “Demographics is Not Destiny”. Journal of Financial Planning. Institute
of Certified Financial Planners 1999.
Deutsche, Alex. Topical Study #51. 10 Oct. 2001 www.yardenicom/topical.asp
Generation Gap to Create Jobs Turnaround. Sydney Morning Herald 4. 10 Oct. 2001
Jackson, Gerard. “Will the Baby Boomers Cure Unemployment?” TNA News with
Commentary. 9 Apr 2001.
Peterson, Peter G. “Gray Down: How the Coming of Age Wave Will Transform
America and the World”. 1999: 189-90.
Sullivan, Teresa A. “Baby Boom Generation”. Discovery Channel School. 2 Oct. 2001.
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