Workforce: Older, Smaller

As we discuss in our chapters on social welfare policy and economic policy, changes in the age and employment status of the population will have major consequences. USA Today reports:

The share of the population that is working fell to its lowest level last year since women started entering the workforce in large numbers three decades ago, a USA TODAY analysis finds.

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.

“What’s wrong with the economy may be speeding up trends that are already happening,” says Marc Goldwein, policy director of the Committee for a Responsible Federal Budget, a non-partisan group favoring smaller deficits.

For example, job troubles appear to have slowed a trend of people working later in life, putting more pressure on Social Security, he says.

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The aging of 77 million Baby Boomers born from 1946 through 1964 from children to workers to retirees is changing the relationship between workers and dependents.

Retirees generally are more costly to support than children.

The average public school education costs $10,000 a year. The average retiree gets $25,000 a year in benefits — $13,000 in Social Security and Medicare benefits of $12,000.

In all, taxpayers will spend about $125,000 educating a child and $500,000 caring for a senior, in today’s dollars at current life expectancies, according to federal education and retirement program data. The costs are paid differently, too. State and local governments, through sales and property taxes, pay most education expenses. The federal government, though income taxes, pays most retiree costs.