A new report by AARP and The Economic Intelligence Unit shows that the 50-plus demographic … [+]
The 2018 economic activity for people in the U.S. age 50 and older, estimated at $8.3 trillion, is a driving force in the U.S. economy according to a new AARP report released today. Representing 40 percent of the U.S. economy’s GDP, contributions from the 50-plus cohort are equivalent to the third-largest economy in the world.
Contributions from the U.S. 50-plus population are driving the U.S. economy.
After factoring in unpaid activities such as caring for a family member and volunteering, worth another $745 billion, the overall contribution of the 50-plus population increases to more than $9 trillion–dispelling the myth that older people are a drain to the economy. In 2050 when Gen Zs begin joining the 50-plus cohort, annual projected contributions will have increased 240 percent to $28.2 trillion.
“The Longevity Economy® Outlook: How people age 50 and older are fueling economic growth, stimulating jobs and creating opportunities for all” is the result of a partnership between AARP and The Economist Intelligence Unit. The report is a compelling call to action for business leaders, legislators and anyone who wants to better understand and serve this growing demographic.
“If we look at today’s 50-plus demographic, tomorrow’s 50-plus and the 50-plus of the future, we are talking about a massive increase,” says Dr. Debra Whitman, AARP executive vice president and chief public policy officer.
Dr. Debra Whitman, executive vice president and chief public policy officer, AARP.
“What’s important about this report is that we’ve moved beyond GDP to capture other ways the 50-plus cohort is driving the economy. Volunteering and caregiving, for example, are nontraditional parts of GDP and impact all generations.”
The Longevity Economy report uses a forecasting model from Regional Economic Models, Inc (REMI), and data include spending, workforce and tax contributions as well as the estimated economic value of unpaid activities. The result offers a more holistic representation of economic impact.
Business Leaders’ Call to Action
Looking across 16 industries, the report demonstrates the impact of the 50-plus population on the economy. In 2018 it represented almost two-thirds of all spending on financial services and insurance, 63 percent of total health services spending and contributed nearly $1 trillion in taxes.
Another data-dispelled myth is that older adults are not embracing technology. The AARP report shows that in 2018 the 50-plus population outspent under-50s on tech-related products and services–$140 billion to $136 billion. Yet, less than five percent of marketing and media images showed an older person using technology.
What business leaders across industries should ask themselves:
- “How can I better serve this demographic?”
- “Are my products and services targeting their needs?”
- “Do my marketing efforts include people who look like them?”
- “Does my workplace represent this demographic?”
“We find that marketplaces are not looking at older consumers or providing the products and services they need,” says Dr. Whitman. “This is too big to miss, and if businesses are not paying attention, they won’t be successful in the future economy.”
The AARP founding mission is to empower people to choose how they live as they age–that means they need choices. Using data to dispel societal myths and educate the public on the total economic impact being made by the 50-plus demographic is a start.
“What we hope to achieve with this report is to make sure the 50-plus have an economy that works with them and for them. Employers, manufacturers and the marketplace need to understand this isn’t about the baby boomers retiring–it represents a growth industry that is here to stay.”