Is ‘temp’ the new ‘permanent’?

Are we becoming a nation of contract workers? According to business services firm MBO Partners, there were almost 18 million “independent workers” in the US last year – up 10% from only two years earlier. Is it a continuing reaction (or maybe over-reaction) to the recession? Is there something deeper at work? Could actually be a good thing – for both workers and employers?

Check out this report on It will give you plenty to think about. Many of the themes I’ve been blogging about in this space are play on a large scale:

For Americans who can’t find jobs, the booming demand for temp workers has been a path out of unemployment, but now many fear it’s a dead-end route.

With full-time work hard to find, these workers have built temping into a de facto career, minus vacation, sick days or insurance. The assignments might be temporary — a few months here, a year there — but labor economists warn that companies’ growing hunger for a workforce they can switch on and off could do permanent damage to these workers’ career trajectories and retirement plans.

This subject isn’t going away any time soon.

Oh, no — Boomers moving in with Mom and Dad? It’s actually happening…

Now it’s Boomers! Yes, according to a report in the LA Times, “older people are quietly moving in with their parents at twice the rate of their younger counterparts.” For the seven years 2005-2012, the number of Californians age 50 to 64 who live in their parents’ homes jumped 67.6% to 194,000, according to the UCLA Center for Health Policy Research and the Insight Center for Community Economic Development.

The main reason:  dollars and cents. True, some are moving back to their parents’ homes in order to take care of those parents (who would be in their 80’s or 90’s) but for the most part it’s due to the financial squeeze caused by the Great Recession. Either their nest egg has been wiped out, or they’re unemployed, or both. Long-term unemployment is a big problem: the number of Americans 55 and older who have been out of work for a year or more stands at 617,000 – five times what it was at the start of 2008 when the recession began.

The article lays out the emotional toll this is taking. Boomers, after all, are supposed to be the super-competent generation who take care of everyone else. Says public policy consultant Jenny Chung Mejia, “”It’s unexpected vulnerability at this point in your life. When you’re supposed to be the provider, sort of the rock for yourself and your family and maybe your parents, the table just gets turned on you and the rug gets pulled out from under you.”

When you look at it in percentage terms, it’s a dramatic story. But the absolute numbers give a different spin. The 194,000 California Boomers who have moved back in with their parents compares to 1.6 million Californians age 18-29 who have moved back home.

Even so, it’s a sobering reminder of the financial vulnerability faced by the Boomers, whose retirements are seriously underfunded. Thus, the pressure to keep on working, as opposed to retiring “on schedule” at 65.

You can check out the entire article here.



Meet the “encore” entrepreneurs (you may be in for a surprise)

I’ve written before about the growing trend of Baby Boomers to start their own businesses. It’s an ideal way to handle the economic “triple threat” of today – real or potential job loss, under-funding for retirement, and lousy rate of return on those funds that have been set aside. Now comes evidence that women are outnumbering men as “encore entrepreneurs.”

This interesting report from BBC News cites data from a Kauffman Foundation study to show that the Boomer entrepreneurship trend is growing: in 2012, people aged 55-64 started 23.4% of all new businesses in the US, up from 14.3% in 1996.

But according to data from another source – Babson College – 10% of US women between 55 and 64 had taken steps to start their own business, compared to 7.5% for men.

The BBC story includes several interviews with women who have taken this step. The main reasons are what you’d expect – job loss, income reduction due to the recession, inadequate retirement funds. What’s different this time – compared to people of that same age in previous generations – is the perception that there is still time to turn things around, the willingness to start again, and the presence of a strong entrepreneurial mindset.

That – and a growing amount of support information and services. Books, seminars, consultancies – the trend to Boomer entrepreneurship has fueled an entire mini-industry of people (with real or self-proclaimed expertise) ready to help.

This is just the beginning. And it’s another nail in the coffin of “retirement at 65.”

Gallup Poll: The percentage of Boomers who will not retire at 65 climbs to…

A new Gallup poll, conducted last month, confirms – yet again – that more and more Baby Boomers are not planning to stop working at the “traditional” retirement age of 65.

According to this poll, 39 percent said they expect to retire at age 66 or older, and a further 10 percent said they expect to retire…um, never. Add the two together, and you get 49% – just under half.

Of the others, 24% expect to retire on schedule at 65, and 27% said they’ll retire at 64 or younger.

The trend to working longer is, as we’ve seen, driven by three  factors coming together at the same time: increased longevity (and therefore, the need to have cash for more years), Boomer underfunding (a shockingly high number have saved up less than $50,000), and the lifelong Boomer attitude to work (we like it). I expect the percentage who don’t retire at 65 to keep on climbing.


Watch me on The Zoomer, with Conrad Black and Denise Donlon, tonight at 9 on Vision TV

I’m pleased to be back on the panel again, and the topic is: the workplace. We had a lively discussion, and you’ll recognize many of the issues, from following this blog. Watch The Zoomer tonight (Monday, January 20) on Vision TV, at 9.00 p.m.

If you want more information on the program, visit the web site here. You can also watch my two previous appearances on the show, on October 15 when we discussed “age rage” and the apparent “war of the generations,” and on November 18 when we talked about the state of Zoomers – pensions, aging, and a whole lot more.

I hope you’ll be watching tonight — and let me know your reaction!

Teacher, teacher


If you want a good preview of what longevity is going to do to all our established models – especially financial ones – here’s a lesson from the Ontario Teachers’ Pension Plan.

First, some background. It’s a massive – and very well-run – pension plan. It has over $107 billion    in assets, and posted an impressive 14.3% return in 2010. It owns or has owned some very big and high profile assets, too. For example, a 25% stake in Maple Leaf Foods (now sold), and 66% stake in Maple Leaf Sports and Entertainment, which owns the Toronto Maple Leafs, Toronto Raptors and Toronto FC soccer team (although this asset is apparently on the selling block). In 2010, it increased its commodities assets to $5.2 billion, up from $1.9 billion in 2009.

So we’re not talking about the little leagues here. In fact, it’s the largest single-profession pension plan in Canada, administering the pensions of 295,000 active and retired teachers in Ontario.

And yet it’s facing – in the words of Jim Leech, chief executive of the plan – “systemic funding problems.”

The plan pays out $1.8 billion more each year than it receives from contributions – a gap it projects will increase to $5.3 billion by 2030.

Why the shortfall?

“Our demographics have changed dramatically,” Leech said in an interview that was widely reported in Canadian newspapers.

No kidding. Have a look at these statistics:

  • 20 years ago, there were four active teachers per retiree. Today, the ratio is 1.5:1.
  • 20 years ago, the average teacher worked 29 years and collected pension benefits for 25 years. Today, the average career is 26 years and retirement benefits are paid out for 30 years.
  • Among the retirees are more than 90 people over the age of 10

Yikes. Teachers are collecting retirement benefits for more years than they were working. And as life spans continue to lengthen, that 100+ cohort will only get bigger.

“This is a dynamic that’s hitting every pension plan in the world,” Leech said. Fortunately for Ontario’s teachers, their fund is very strong and Leech and his team have plenty of time to take action. (“We can pay pensions for many, many years even if we didn’t have any other investment returns,” Leech noted, “but we have to think about the 70, 80 year horizon and that’s when you start to say maybe we should do some course corrections today.” )

But what about pension plans that aren’t as strong? (Hint: the entire US Social Security system)

What about benefits that already can’t be paid –  right this minute? (Hint: Europe)

And now people are going to live — shudder — even longer?