2003 Whereas The Baby Boomers Generation example essay topic

During the period of 1946 through 1964, America experienced the largest growth rate ever. According to the U.S. Department of Commerce, Bureau of the Census, this currently equates to approximately 76 million people and 29% of the United States (U.S.) population, ranging from ages 39 through 57 years of age (Baby Boomer Headquarters [BBH], 2003). Some suggest that the increased birth rate during that period was due to women (whose husbands were returning from the war) choosing to bear children that were postponed during the Depression and World War II period, in addition to the booming post-war economy (Macunovich, 2000, p. 2). With this group being such a large portion of the U.S. population, baby boomers, in the past, currently, and will in the future have a profound impact on key macroeconomic areas such as resources, goods and services (consumption), and loanable funds. Labor is the largest component of the resources market and baby boomers for some time have been center stage in this aggregate market. Many parents of baby boomers sent their children to college, encouraging them to be competitive and to succeed in the job market.

Using the basic definition for civilian labor force, baby boomers make up the largest portion of workers, compared to other individual generations, who are in the work force in America today. In fact, they have been credited for the low unemployment rate over the last two decades. According to economist Michael T. Owyang, "On an average unemployment rose during the 1970's as the baby boomers entered the labor force and the median age of the labor force declined. Since 1980, as the baby boomers have entered middle age, the median age of the labor force has risen while the trend unemployment rate has fallen" (Owyang, 2001).

In the U.S., labor account for approximately 70 percent of production cost. Baby boomers represent the labor force in all areas of or nation, from the President of the United States, George W. Bush, to great CEOs like Bill Gates of IBM. Big name baby boomers such as: Paul Allen and Steve Ballmer, CEOs of General Electric and Ford; Ron Howard, Steven Spielberg, Michael Jordan Tom Hanks, Michael Jackson, Rush Limbaugh, Oprah Winfrey, Madonna, and Bruce Springsteen, have been responsible for generating billions of dollars in the economy as their presences and names alone represent money. Not only do their occupations demand enormous income, but they, themselves have also helped generate jobs for others. Whether through an innovative idea, formation of corporations, or in the entertainment industry, they must be credited for having a tremendous impact on the wealth in the economy that is generated by their association.

Additionally, the list of employment areas that are saturated by baby boomers include farming, construction, real estate sales, public administration, management analysts, teachers, professors, dentists, psychologists, crane operators, engineers and authors to name a few. Baby boomers are an essential part of the labor force, and many other occupations exist in part because of them. For example, the day care industry emerged to accommodate married boomers who chose to combine their careers with parenthood. With both parents working, day care facilities and day care workers were in high demand. Other occupational areas that have been directly influenced by baby boomers are in the computer and software industry. Consider how many occupations have been generated because of baby boomer Bill Gates and Microsoft.

Baby boomers will be around for a while too. Even as they age, many plan to work during their retirement years; this will keep them in the work force longer than previous generations. Baby boomers love technology and possess a great deal of computer skills, in addition, "They won't even think of themselves as being senior citizens until after they turn sixty (39 percent) or seventy (42 percent) " (Lamb, Jr., Hair, Jr. &, McDaniel, 2004, p. 65). Already, organizations such as Wal-Mart and McDonalds have recognized and capitalized on this emerging segment of the labor force by hiring older workers. Another reason why baby boomers will be in the labor force longer is that they are aware of the rising issues concerning social security.

The effect in which baby boomers have had on society is often described as an image of a snake that has swallowed a pig. This large segment of society moves together at a slow steady pace. Thus, as baby boomers began to retire, this will cause yet another significant influence on the economy in the form of social security payments. Whereas around 1950 there were 16 workers to every one retiree, those numbers have changed greatly to three workers to every one retiree. These numbers are predicted to change again as more baby boomers retire (Coyle, Jr., 1998).

The aging population of baby boomers will also expand employment opportunities in health care professions that care for the elderly, home health care providers, as well as (and unfortunately) the funeral industry. Today baby boomers are a very large portion of the labor force, helping to maintain a healthy economy, however, in the next 8 to 10 years the effects of their retirements could become a burden. Recently, Mr. Greenspan said, "Early initiatives to address the economic effects of baby-boom retirements could smooth the transition to a new balance between workers and retirees", He feels that, "If we delay, the adjustments could be abrupt and painful" (Associated Press [AP], 2003). Nevertheless, for now basic economics still apply, baby boomers, who are part of households, supply resources in exchange for income, and when people have income, they will consume by purchasing goods and services. Household consumptions are a major portion of the goods and service market. Personal consumption accounts for the largest portion of the Gross Domestic Product.

Karen Axelton of Business Start-Ups magazine wrote: No matter what you " re selling or to whom you " re selling it, if you want to succeed you " ve got to understand the buying habits of the baby boomers -- that massive generation born between 1946 and 1964. "Boomer marketing is the [key to] all marketing in this country for the next 25 year", contends Phil Goodman, founder of the Boomer Marketing & Research Center in San Diego. (Axelton, 1998) Baby boomers continue to demand attention that is impossible to be ignored. They have driven the direction of consumer purchases for the last 57 years. As their parents were experiencing the effects of a great economy, nothing was too good for the baby boomer. Beginning at their infant stage, baby boomers added to the goods and services market in the form of consumption.

Items such as baby food, disposable diapers, and toys were manufactured at a tremendous rate, while at the same time generating hundreds of new or improved items creating fierce competition in these areas of the market. As teenagers, they were the first generation with significant spending power that fueled the growth of massive marketing campaigns which introduced more new products and even terminology targeted at the boomers' in every stage of their the life cycle. Terms like "Hippie" and "pop group" labeled baby boomers and set patterns for different fashions. All around the country, clothing manufactures raced to capitalize on sales from mini-skirts, bell-bottoms, and relaxed fit jeans. "The term "Yuppie" (Young Urban Professional) was coined to describe the high-consumption, low-savings lifestyle of many boomers" (Macunovich, 2000, p. 4). Designer clothing icons such as Izod, Polo, Calvin Klein and Gloria Vanderbilt must also pay homage to the baby boomers that help catapult their products for the last 20 to 30 years.

Still to this day, baby boomers maintain their loyalty to these and many other name brand products. They clearly guided the record sales in the early product life cycle stages of items such as transistor radios, drive-in theaters, fast food processors, video recorders and computers. Since baby boomers do not see themselves as growing old, they consume many of the same items as their teenagers from video games to music. They are not considered as trend followers, however they do influence the purchases of their parents and their children (Axelton, 1998). The success of the enormous sale of sports utility vehicles (SUVs) is another product that owes credit to the baby boomers. In short, if the boomer generation likes a product, others will follow.

Baby boomers are the most affluent generation ever, thus, traveling, vacationing, recreation and entertainment are other areas where baby boomers leave their mark. They stay in more hotels and rent more cars than any other age group. Baby boomers are predicted to inherit $10.4 trillion in wealth transfers known as the "Inheritance Boom... This influx of wealth and additional disposable income present a huge opportunity for me-oriented spending, particularly in the travel industry" (National Tour Association [NTA], 2002, p. 17). Their nostalgic memories of professional sports teams, Disney World and other theme parks, rock and roll and soul music, and fast food continue to help generate billions of dollars in our nation. When it comes to the housing market, baby boomers are still at the top of the list.

They were responsible for the rise in real estate prices during their nesting age and the collapse of the real estate market in the late eighties. The nation can also expect a rise in the demand for retirement housing in the near future, as baby boomers grow older (Kressley, 1998, p. 2). As they move into their retirement years, they will surely present the goods and service market with many new money making issues. An example would be the discontinuous innovations that will be developed specifically due to the aging needs of this large cohort of elderly people. "Baby boomer demographics continue to drive the US economy and, by extension, the global economy... they have the desire, ability and willingness to buy" (Greenwood, 1999). The good and services market also include government expenditures.

Taking into consideration the fact that the government is not a person, this entity has to generate funds from somewhere in order to have expenditures. Almost half of the government's revenue at the federal level comes from personal taxes, and let us not forget taxes that are paid at the state and local levels. Thus, the working population of the 76 million baby boomers have supplied a significant portion of government revenue in the form of taxes. As mention earlier, because so many baby boomers are in the labor force, we should have a surplus of social security. However, since social security is the largest portion of government expenditures, the baby boomers are quickly on their way to collect and this may influence the economy negatively. They will definitely consume a huge portion of social security benefits when they retire, and with so many of them, it would behoove baby boomers to reduce their current consumption and began saving.

Savings from households supply funds to the loanable funds market, which help direct the flow of income between business and households. Baby boomers supply an enormous amount of funds in the loanable funds market, not only through direct savings and investments, but also via interest paid on loans and credit cards purchases. One report indicated the following: [Baby boomers] have been credited by some with fueling the prolonged expansion of the stock market as they search for investment opportunities in their high-earning years. At least one source has suggested that saving by boomers has raised the saving rate about five basis points (.

05 percentage points) per year, and that the aging of the baby boom generation will ultimately add a percentage point to the saving rate. (Gist, Wu &, Ford, 1999, p. 1) In closing, the baby boomer generation brought with it a wave of social and economic challenges, both positive and negative. The increased birth rate was not limited to America, but this boom happened in other countries like Canada, Japan, Australia, Germany, Ireland, and the United Kingdom. Some saw the invention of the birth control pill as a blessing in disguise that slowed down the birth rate in the U.S. beginning around 1965.

If one were to ask Baby Boomer Headquarters what effect do baby boomers have on the economy, they would respond as follows: We are amused when visitors ask what effect the boomers are having on the economy. Folks, in 2003, the economy IS the boomers! We represent the vast majority of the work force. There are 76 million of us; we ARE the economy. The huge growth in the economy in the 90's was due in no small part to 76 million of us working up to our peak earning and spending years. (Baby Boomer Headquarters [BBH], 2003) Whereas the baby boomers generation is still making an impressive impact on the national and global economy, one can't help but wonder what economic effect such a large group holds for the future.

Bibliography

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