Baseball’s MVPs are typically younger than 30 and rarely over 35. Office workers and salespeople tend to be most productive in their early to mid-40s. Most Nobel prize winners in physics and chemistry did their innovative work before they were 50. Academic studies even imply that businesses with younger workers have a higher return on their assets.
In an excellent course on “Modern Economic Issues” from the Teaching Company, when Dr. Robert Whaples discusses aging in Lecture 13, he suggests that we have more to worry about than soaring health care spending and Social Security programs. An aging population could diminish productivity and innovation.
By 2050, close to 27% of the U.S. population will probably be older than 65 and the median age will be 41. Older than we are, Europe and Japan will have a median age that is close to 50 in 2050.
Should we be concerned? One researcher suggests that we might “coax more output from the workers we already have, through more physical capital, improved technology, or better resource management.”
The Economic Lesson
All of this returns us to economic growth. To sustain and better our standard of living, we need economic growth. Our yardstick for measuring economic growth is the Gross Domestic Product (GDP). The GDP is equal to the value of the goods and services that we produce in the U.S. each year. Its four components are 1) gross investment (primarily business spending), 2) consumer spending, 3) government spending, 4) exports minus imports.