Tuesday, September 02, 2008

Still Laboring

The day after Labor Day….

U.S. workers of all stripes - while collar, blue collar and the new “green collar” folks - go back to offices, assembly lines and computers today. The celebration of work and employment is over and done.

For those who are dragging today, it would be worse. Your efforts could still be going entirely to pay taxes. Since the combined federal, state and local taxes eat up 40% of the average workers pay I estimate that U.S. citizens must work through mid-June before they begin earning for themselves.

Taxes are not the only weight on the shoulders of U.S. labor. There are a number of older workers who returned to the job this morning. The average retirement age is around 63 years. The number is expected to get higher as more and more seniors opt or are forced to stay working by inadequate retirement benefits. An AARP estimates 27% of workers are over 45 years of age. In a recent AARP survey 32% of respondent between the ages of 55 years and 64 years said they planned to delay retirement.

It is not just economic necessity. Some respondents cite continued good health, intellectual stimulation and companionship as among the reasons they are staying in the work force.

This is all very fascinating, but may not seem like it will make a difference for investors. On the contrary, I believe investors should recalibrate expectations for the impact of the Aging Boomer Population. If Boomers remain employed longer than we had originally anticipated, all many of industries will be impacted.

The travel industry could be over-built. Vacation and resort communities could be in the same boat. On the flip side, some industries may be shifting too early to the preferences of the next generations. For example, the various broadcast and print media may be wrong to count out the purchasing preferences of the employed Boomer.

The workforce the day after Labor Day looks very much like last year…just with a few more gray hairs.

No comments: