Report Finds New York’s Baby Boomers Are An Economic Boon, Not A Burden

For many years, economists and lawmakers have warned of the looming economic drain upon the United States baby boomers would become once they reached retirement age as the largest generation to date to be dependent on entitlement programs like Social Security and Medicare. However, at a forum this morning entitled “Boomtown”, co-hosted by City & State and AARP New York, Jody Holtzman, senior vice president of thought leadership at AARP, disputed this notion as “fear mongering.”

“It’s only in Washington [D.C.] ... that addressing the unmet needs of over 100 million people is an unaffordable financial burden. In the private sector, serving the unmet needs of over 100 million people is called an opportunity,” Holtzman said. “The lie that we can’t afford people over 50 is just ridiculous.”

Today’s forum on the importance of baby boomers to New York’s economy and the necessity of creating the conditions that will keep them from moving elsewhere in their retirement years coincided with the release of a new report by AARP New York entitled “State of the 50+ in New York State”. Among the panelists were key representatives from AARP’s national office, as well as local thought leaders like Stephen Acquario, the New York State Association of Counties’ executive director, and Gary Fitzgerald, president of the Iroquois Healthcare Alliance. New York State Comptroller Tom DiNapoli gave the forum’s keynote remarks.

In 2010 the U.S. Census Bureau found that one in seven people living in New York were age 65 or older and projected that by 2035 that number will rise to nearly one in five. Despite the hefty size of this demographic, AARP New York’s report found that rather than adversely affecting the state’s fiscal well-being boomers actually are a key source of economic growth and prosperity. New Yorkers age 50 and older account for $3.1 trillion in consumer spending and another $1.6 trillion in healthcare spending. Moreover, they generate tens of millions of jobs, trillions of dollars in salaries and wages and contribute $1.75 trillion in federal, state and local taxes. They are also critical engines of entrepreneurship; New Yorkers 45 to 65 years of age create more business start-ups than their fellow residents who are in their 20s.

Though New York benefits immensely from baby boomers’ contributions to the state both from an economic and societal standpoint it is in grave danger of losing this population to other parts of the country. AARP’s survey found that 60 percent of people 50 and older said they are “extremely” to “somewhat likely” to leave the state once they retire.

“This is really troublesome, because [of] … how important those dollars are to the state’s economy and to the state’s future,” said forum panelist Dr. Debra Whitman, the executive vice president for policy, strategy and international affairs for AARP. “That’s bad news for New York State.”

The main concerns New Yorkers age 50 and older have about remaining in the state are housing affordability, property taxes, utility prices and healthcare affordability, according to AARP’s report. Additionally, as these costs rise, it is all the more difficult for people of this age group to save enough of a nest egg to retire. More than a quarter of the respondents to AARP’s survey said they are not confident they will ever be able to afford to retire and more than half say their retirement will be delayed.

“Because we’re getting so little action in the U.S. Capitol on this issue, we really need to see the states take up this mantra of helping their active workers save for their futures.” Whitman said.

As an extra incentive for politicians to take action, Whitman pointed out that it is in lawmakers’ self-interest to pay attention to the needs of the over-50 population. In the 2010 gubernatorial election, 52 percent of New Yorkers age 50 and older turned up at the polls—a rate nearly twice that of their 18-49 counterparts.

“Older people vote,” Whitman said. “This is important for politicians and for the entire state to understand what it really is these voters are interested in.”