Revving Up the Economy: The Impact of Older Adults

I was thinking the other day about a Meals on Wheels driver, Mr. Harold, who retired from Senior Citizens, Inc. after 19 years of service. While working nearly two decades for one company is impressive these days, what’s even more impressive is this was Mr. Harold’s second retirement. His first career was as a longshoreman, where he worked for nearly 38 years. When he retired for the second time from SCI in 2021, he was just a few weeks shy of his 90th birthday!

What an example Mr. Harold is for all of us, and what a testament he is to the impact of older adults. Today – with advances in health care – we are living longer, healthier, and more fulfilling lives than previous generations. Just 100 years ago, the average life expectancy was around 61 years; now it’s nearly 78! The United States is in the midst of what is often called a “silver tsunami,” with 10,000 people turning 75 every day.

However, it is no secret that we live in a youth-obsessed culture. Just take a look at a cosmetics counter with its wrinkle serums or the greeting card aisle with cards mocking old age. The image of later life is often viewed through the lens of loss: loss of health, loss of loved ones, loss of work, loss of vitality, and loss of purpose.

In addition, COVID-19 has exposed ageism around the world. Older people have been stereotyped on social media and age has been used as a sole criterion for access to medical care, lifesaving therapies, and physical isolation. In 2021, the World Health Organization (WHO) warned that negative stereotypes about aging not only leads to poorer health and social isolation, but also costs economies billions of dollars.

But it doesn’t have to be that way.

Older adults – the wealthiest age cohort in the world, by the way – earn wages, spend money, generate tax revenue, support social causes, and create demand for goods and services that stimulate job growth. They also represent a large chunk of unpaid activities like caregiving.

In fact, if Americans 50 and older were counted as their own country, they’d constitute the world’s third-largest economy. That’s from a 2019 AARP study that also found that group’s economic impact will triple by the year 2050, increasing spending from $8.7 trillion in 2020 to a projected $15 trillion in 2030.

The AARP study, called the Longevity Economy Outlook, examined national data on how much people age 50 and older spend, earn, and pay in taxes. From that information, the organization projected the profound impact older adults have on the economy, with four key findings:

People over the age of 50 are a growing economic engine. Older adults are not a drain, but a growing demographic that transforms markets. Currently numbering 117 million, they will expand to 157 million by 2050. In 2018, 56 cents of every dollar spent came from someone 50 or older. By 2050, it will be 61 cents. They drive economic growth, innovation, and new value creation.  

Not all value is generated through paid work. The older adult demographic contributes $745 billion worth of unpaid activities and comprises an “invisible workforce.” This includes $604 billion worth of caregiving and $140 billion worth of volunteer and service activities. Without these contributions, the economy would suffer tremendously.

Seniors’ spending and labor support millions of jobs. In 2018, those 50 and older comprised 44 percent of total employment, and their spending and labor supported 88.6 million jobs.

Today’s job market, which is facing a shortage of skilled workers, could offer more opportunities for older job workers in industries where experience counts: financial services, engineering, health care, and others. In addition, 25 percent of all new entrepreneurs in 2018 were between the ages of 55 and 64, up from 15 percent just 20 years earlier.  

The market needs to catch up with this group. The stereotypical grumpy old man snarling at kids to get off of his lawn is just that…a stereotype. In fact, older adults are tech-savvy (they spend more time online than millennials!) and are more active than ever. For example, in 2018, the 50+ crowd spent $140 billion on technology. That number is expected to grow to a whopping $645 billion by 2050. Other potential market opportunities for this age group include health care, luxury and travel, and insurance, particularly as a result of the pandemic. Market innovation – and marketing – is essential to tap into this wealthy and often undervalued resource.

As of April 2021, U.S. households headed by people 55 or older held 69 percent of the country’s total wealth. So-called “senior citizens” have five times the worth of the average American. So why is only 5 percent of advertising focused on them? Let’s reframe the conversation. Instead of a drain of retirees, we actually have a dynamic, experienced workforce. And instead of expensive costs, we have an exploding consumer market that is bolstering our economy.  

Age is a time of continued growth and vibrancy. Instead of shunning it, let’s embrace it and transform our society into one where everyone can age successfully.

Patti Lyons is president of Senior Citizens, Inc., a nonprofit organization in Savannah and coastal Georgia that has been helping people age successfully since 1959. She serves as the chair on the Meals on Wheels America Board and is a governor’s appointee to the Georgia Council on Aging. Learn more at www.seniorcitizensinc.org.

This article appeared in the February 25, 2022 issue of The Skinnie.