The “Great Retirement”

We’ve heard a lot about the “Great Resignation,” the trend of people quitting their jobs to pursue better-paying and more meaningful opportunities. So, are older Australians re-assessing the job market future?

According to a recent report by Commsec, it appears more people than expected have retired during the pandemic, which suggests we’re now seeing a “Great Retirement” of Baby Boomers leaving the workforce.

Here’s what the Commsec report had to say…

Before Covid-19 a major reason that Australians weren’t employed or looking for jobs was that they had retired ie they were out of the job market. The proportion of those not in the workforce because they were retired hit a record 39.9% of the total in June 2021 and this has since fallen to 36.4% in September 2021.

If more people are electing to retire, then there are fewer potential workers to fill positions, which may mean the job market tightens more than generally expected, putting upward pressure on wages and prices. That is especially the case if foreign borders stay closed. In other words, The Great Retirement could lead to a tighter job market.

Older Australians may see greater health risks in being in the job market in the Covid era, and still, others may elect to live large given the experience of the past 18 months. At this stage, data still shows that older Australians are active in the job market with record participation levels. However, peak levels may not be far away.

Following the lockdowns, the reopening has led to supply-chain breakdowns and higher prices for goods. This may also lead to similar worker-job breakdowns, with labour shortages driving up wages.

If you combine the “Great Resignation” with the “Great Retirement”, we could be looking at a very different workforce in the future, forcing employers to rethink and restructure their workforce…we have some very interesting times ahead!

Remember, if you need any help or advice, we are just a phone call away.

All the best, Simon.

Source:  Commsec Economic Update & Michael Yardney’s Property Update

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