This recession has led to some very predictable results: unemployment increase and spending cuts by the government, corporations and people themselves. What is alarming as we recover from the recession is the reality that many people have dropped out permanently from the labor force. One such group that needs special attention is the baby boomer generation. Cash strapped companies having laid off people left and right. For younger people, finding a second job is not easy but it happens eventually. The population of 55+ however has suffered the most. Once laid off, this group is at a disadvantage due to the following reasons:
a. Due to many years of experience and knowledge, this age group needs to be paid much higher salaries than newcomers.
b. Most companies look at this age group as a liability as they would probably retire in the coming 2-5 years and hence they do not want to give them higher responsibilities. Companies shy from giving them management responsibilities and other benefits.
What managers and companies do not realize is that in doing so they are creating a multitude of problems for themselves in the medium to long term by looking at only short term solutions. The baby boomer population if employed in proper jobs and given fair opportunities will relieve the economic problems in many ways:
a. The longer this group earns, the more they contribute to the social security system and boost their own pension.
b. This means more spending capacity for this group for a longer period of time.
c. This also means that the younger generation has less of a burden and hence will spend and concentrate more on medium to long term investments.
So which companies should be worried most if the baby boomer generation has fewer options for earning? Ideally healthcare, consumer products, travel and vacation operators and lifestyle solution providers. So if any of these companies are laying off 50+ employees at the drop of a hat: well they are probably laying off a big part of their future as well!
Rachna Dayal : Investment 