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Friday, January 24, 2014

Twelve Ways Baby Boomers Will Shape the Nation in the Coming Decades

Baby boomers are a huge group of Americans who have affected the nation’s social, political, and economic life from the day they were born. The birthrate in this country jumped after World War II and stayed high up until the mid-1960s, directly related to both the hordes of soldiers, sailors, and marines returning from their service in World War II, and a booming economy that encouraged family-making and children. The result was a very large number of children born between 1946 and 1964 who, like a pig moving through a python, have had an impact on society at each stage of their lives. Now, as boomers have reached at least the 50-year mark and as the oldest have moved past age 65, boomers will continue to have a dramatic effect on many aspects of American life in the years to come.

Our series on boomers at Gallup.com has looked at boomers’ impact and potential impact on engagement at work, the workforce itself as boomers retire or choose not to, bommers' relationships to banks, and how they may affect America’s politics in the years to come.

There are many other possible ways that boomers will affect our social, cultural, economic, and political scenes in the years to come. There has been no shortage of projection and discussion of these implications, some of which are based on hard facts, and some on speculation. Indeed, just a cursory review of the literature shows that almost every industry has commissioned studies and done research to see how aging boomers are going to affect their line of work -- ranging from the cremation industry (expecting a boom) to the impact on automobile crash rates.

We here at Gallup will continue to be looking into this in the months ahead, and continuing to report on how this demographic “silver tsunami” will change the fabric of our nation.

We certainly know for a fact that boomers will have a major impact on Social Security and Medicare. Actuaries do the projections and tell us that the essential doubling of the senior population will essentially double the number of people drawing both Social Security and Medicare in the years ahead -- barring some unexpected wave of catastrophic illnesses that singles out baby boomers. If there is a point of speculation in this regard, it has to do with how long boomers will live. It will be great news for boomers if new health advances and boomer commitment to staying healthy gives them a longer lifespan than those generations who have come before them. This will, however, not be such great news for working Americans who will havea to support these greying boomers with their tax dollars.

Healthcare will be affected by aging boomers in many ways beyond the draw on Medicare. Gerontology will be a major growth specialty for medical doctors – although, unless pay scales change, it will not have the financial appeal that now attracts the best and brightest young medical students to dermatology and plastic surgery. The pharmaceutical industry will probably shift its focus to drugs that relate to problems associated with an older population -- Alzheimer’s, other forms of dementia, heart issues, hearing and vision problems, and cancer. Hospital use will increase, most likely significantly. Philosophers and others with a stake in the game will be forced to increasingly ponder end-of-life medical decisions, specifically the issue of just the length of time that is justified to keep older, sick people alive. Nursing home use will expand.

Regardless of how long boomers live, we know that the funeral industry will be affected, since all boomers will eventually die. The exact implication of this huge increase in deaths 20 to 40 years from now is not clear, since there is a major financial difference between a full-fledged funeral with burial, and a small service with cremation. Thus, the growth in the funeral industry, to some degree, will depend on boomers’ (and their families’) decisions on how they want to be treated upon their passing.

Religion, as I note in my recent book, is certainly going to be affected by the aging boomer population. Seniors are the most religious of any age group. If boomers follow the pattern of their elders and become more religious as they age, then we will have a generally more religious nation in the future. That this will happen is not a certitude, since boomers may defy previous patterns and not move into a more religious state of being in their later years. But, I conclude in my book that it is probably likely that boomers will become more religious and/or spiritual, and that this will have a very significant impact on the overall religious environment in the U.S.

We assume that boomers, particularly those who retire or who are not working full time, will get the urge to travel. Given their sheer numbers, this predicts a boom in the travel and vacation market. One of the big unknowns here is exactly what type of travel boomers may want to engage in. One of the most likely possibilities is an increase in affinity travel, in which boomers travel with groups of people with whom they share similar interests or backgrounds. A second possibility -- related to the first -- will be the possibility of “traveling while learning,” involving lectures, study groups, and other ways of doing more than just sightseeing and taking thousands of pictures. This follows from an assumption that boomers may have a real interest in expanding their horizons and continuing to learn well into their senior years.

The legal industry could prosper in the coming years as boomers’ net worth and wealth become of more and more interest to their heirs. Certainly many boomers have complied with the admonition of financial advisers to create a will to guide those who are in charge after their demise, but the potential for contentious scrambling for the “wealth of the boomers” looms large in the years ahead, and the legal industry will certainly be poised to help as needed.

We know that boomers will have more time on their hands in the years ahead than they did when most were working or raising families, and we estimate there is a good probability that boomers will become more religious. All of this could add up to a boomer boom in available time, labor, and talent to focus on charity and volunteer work.

And, along the same lines, boomers will have more time available to get involved in advocacy and to work to promote causes and special interests. Available time equals a higher probability for being able to protest and become an advocate. We could well see the new phenomenon of “boomer protests” in the years ahead, particularly since a segment of boomers grew to adulthood in a culture in which protests were frequent occurrences on campuses across the land. Plus, feeling fervently about a cause or an issue often provides an individual with meaning and a sense of importance and purpose in life, all of which are sentiments that boomers may be craving in their senior years. So, we may have an activist class of boomers just looking for causes and ways to express themselves.

Boomers have to live somewhere, and the housing industry is acutely aware of the potential implications of any decisions boomers make en masse to shift their preferred type of housing. One possible negative would be if boomers sell their larger houses, now that they have retired and their families are gone, creating a flooded market for traditional suburban homes. The upside is the fact of life that boomers will have to move somewhere, and that somewhere could be new and inventive types of active living and retirement communities that are likely to continue to spring up across the country, particularly in warmer climates. There may also be a continuing growth in the market for smaller homes, townhouses, and apartments in attractive urban, big city, and university town locations -- locales that offer boomers the types of entertainment, education, and healthcare opportunities they want.

A lot has been written about how unprepared boomers are for retirement, which means that, in many ways, there will be a ripe market for financial advice for boomers. Many boomers do in fact have a lot saved up, opening up a very large market for investment management and advice. So, the financial advice industry may prosper in the years ahead, as boomers look for ways to manage their money and extract enough out of it to supplement their pensions (if they are lucky enough to have them) and their Social Security.

Some may assume that boomers will spend less as they age. The data certainly indicate, at this point, that older people spend less. The biggest spending age group is those aged 30 to 49, based on an analysis of our Gallup 2013 spending data. A group that is all boomers, those aged 50 to 64 years, spent $93 a day on average in 2013, while those 65 and older last year -- mostly not boomers -- spent $78. Millennials, those aged 18 to 29 years, spent just $73 on average. But when we isolate younger seniors who are 65 to 74 years, we find an average spending of $87, not too far behind those aged 50 to 64. So, in the shorter term of the next 10 years, I wouldn’t think there would be too big of a diminution in spending as boomers age. What boomers decide to spend money on will be the key question, of course. Dining out may be one prosperous category, as well as the travel issues I have discussed elsewhere.

My colleagues, Jeff Jones and Lydia Saad, and I this week analyzed the partisan, political identification of boomers and what may happen to that partisan identification in the weeks ahead. Clearly, politics will be affected as boomers age past 65, and one possible outcome is that the nation will become more Democratic as boomers replace the more Republican seniors of today. Generally speaking, senior citizens are a powerful group of voters because they have high voter turnout rates. The raw number of senior citizens will basically double in the years ahead. Thus, we will have a very, very powerful group of voters whose concerns will be extremely important to elected officials. The facile conclusion may be that aging boomers will be, for the most part, monolithically focused on issues of importance just to them -- namely the two entitlement programs of Social Security and Medicare. But there may be a charitable element to boomers’ policy focus in their aging years, one that is concerned with those younger than they are or that is concerned about the adaptability of the social system and culture as a whole. We just don’t know.

All in all, it’s a brave new world ahead for boomers as they age past 65, and also for the U.S. as a nation. We at Gallup will be attempting to help figure out exactly what that brave new world will be and how all of this plays out in determining the economic, cultural, social, moral, and political ethos in which we will be living in the years ahead.

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