Mario Valadez, now 67, hadn’t intended to stop working yet. Starting as a busboy at 16, he had moved from one Los Angeles-area dining establishment to another, eventually working his way up to restaurant manager. When he lost a position in January 2020, he thought it would be a temporary pause.
Then covid hit. The longer Valadez was out of work, the less he wanted to return to 12-hour days in the stressful environment of the restaurant industry. When the economy reopened and potential employers began to reach out, he surprised himself by saying no. “I talked to my wife, I talked to my sons, and they told me, ‘Don’t work. You work too much,’” Valadez told me. Instead, he filed for Social Security.
And that’s how Valadez came to take part in the Great Retirement of the baby boomers — a workplace exodus with the power to upend both the workplace and the U.S. economy.
Goldman Sachs estimated last fall that more than half of those who had left the workforce during the covid era’s Great Resignation were over 55. An analysis released by the Federal Reserve Bank of St. Louis found workforce exits are higher among baby boomers than pre-covid trends would indicate, with a report last month finding women — many of whom work in public-facing positions and are between the ages of 65 and 74 — among the groups leading the way.
Employers are dependent on the outsize baby boomer cohort, whose exit is contributing to growing shortages of workers everywhere, from nursing to school bus drivers to the service industry. It’s not just 22-year-old baristas who have had it with working conditions. Those understaffed stores? Retailers became increasingly reliant on older workers in the wake of the Great Recession. Many are now making an exit.
This is a significant reversal. In the years leading up to the pandemic, many Americans said they wanted to work well past the traditional retirement age. In 2013, a solid 10 percent told Gallup they would “never” exit the workforce. Sure, some of this was driven by financial necessity — Americans, famously, do not have enough money set aside for their senior years — but it also reflected an obsession with work as a way of finding meaning in life.
By refusing to go gentle into the good retirement night, baby boomers were doing the economy a favor. Their continued presence in the workforce helped compensate for everything from reduced immigration to the falling birthrate.
Their sudden exit, on the other hand, raises a host of gnarly issues. It’s potentially inflationary because employers competing for scarcer labor will have to pay higher wages, so they will raise the prices of their products. This could contribute to a wage-price spiral, where rising prices lead empowered workers to demand raises to keep up, fueling even more inflation.
It could also turn into an economic drag. Long before covid, there were fears the baby boomer retirements would stress the finances of Social Security. And the new retirees — many currently flush with outsize gains in the stock and housing markets — could find themselves in a more difficult economic position than they expect if those assets decline significantly in value.
All this provides yet another reason for American employers to improve labor conditions — for older workers and for everyone else. The American workplace is often harsh and takes more than it gives back. There’s no mandated paid sick leave or vacation time. Age discrimination is rife. The vast majority of us are at-will employees, which means we can be let go at any time. The mass layoffs and remote commuting of the covid period, it seems, finally gave Americans reasons to decide they no longer wanted to take part in it.
Many older employees, however, say they would like to stay connected to their jobs in retirement, but worry that they won’t be able to do so. In a recent survey conducted by the Harris Poll for Express Employment Professionals, a staffing agency, a vast majority of respondents expressed interest in semiretirement, where they could either work a flexible schedule or reduced hours or consult — but only one in five of their employers offered up such an option.
Let me be clear. The boomers are going to retire at some point anyway. But it would be better for all of us in the immediate future if we could entice them to do it on a gradual basis. Valadez provides an example. When he found he needed more money than his Social Security check provided, he took a part-time position selling organic fruit at farmers markets. The gig is pleasant, and if he wants to take time off to see his mom in Mexico, no one complains.
He doesn’t rule out the possibility of returning to restaurant work. But it would need to be in a place with enough staff — something not common in the covid era. And he doesn’t want to put in any more monster workweeks. Now, “I can spend more time with the family, with the friends, go to visit my mom, my brothers, my sisters,” Valadez told me. “I start enjoying life.”