Many people over the age of 65 are not employees who are driving up production in the private sector, with the majority of those who are still working being employed in low wage, low skill jobs. As baby boomers retire at a rapid rate, businesses will have to work diligently to replace their well tenured employees with young blood. However, generation X has approximately 20 million less members than the baby boomers, revealing an immense labor shortage. Additionally, private pensions will be exhausted, burdened beyond what current actuarial tables suggest due to the increasing life span of pensioners. Small businesses in rural areas will also be affected. The U.S. Census Bureau predicts that by the end of the century, the majority of older persons in America will live in urban areas. This poses a particularly difficult challenge for small businesses in rural areas, many of which generate two thirds of jobs in their communities. As a larger percentage of the population becomes older, less people will be seeking work, potentially leading to a labor shortage. Small businesses have capital constraints that inhibit their ability offer competitive wages, but will have to continually increase compensation in order to attract workers. However, these increases in wages will not produce higher levels of productivity, leading to inflation and an overall decline in U.S. aggregate
Many people over the age of 65 are not employees who are driving up production in the private sector, with the majority of those who are still working being employed in low wage, low skill jobs. As baby boomers retire at a rapid rate, businesses will have to work diligently to replace their well tenured employees with young blood. However, generation X has approximately 20 million less members than the baby boomers, revealing an immense labor shortage. Additionally, private pensions will be exhausted, burdened beyond what current actuarial tables suggest due to the increasing life span of pensioners. Small businesses in rural areas will also be affected. The U.S. Census Bureau predicts that by the end of the century, the majority of older persons in America will live in urban areas. This poses a particularly difficult challenge for small businesses in rural areas, many of which generate two thirds of jobs in their communities. As a larger percentage of the population becomes older, less people will be seeking work, potentially leading to a labor shortage. Small businesses have capital constraints that inhibit their ability offer competitive wages, but will have to continually increase compensation in order to attract workers. However, these increases in wages will not produce higher levels of productivity, leading to inflation and an overall decline in U.S. aggregate