Final answer:
The retirement of the baby boomer generation is likely to cause a labor shortage and may lead to increased wages in some sectors. It will also put additional pressure on social programs like Social Security and could change the standard of living for Americans. The dependency ratio will shift as fewer workers will need to support more retirees.
Step-by-step explanation:
As the baby boomer generation reaches retirement age, significant changes are expected in the US job market. A substantial number of employees will leave the workforce, leading to a potential labor shortage in various sectors. This exodus could also create a knowledge gap, with a large amount of institutional knowledge and expertise being lost as seasoned professionals retire.
The increase in the retiree to worker ratio could result in increased wages due to supply and demand dynamics. Fewer workers available for a given number of jobs can push wages up as employers compete to attract the necessary talent to fill vacant positions. However, this should be visualized with caution, as the exact impact on wages can vary by industry and geographic location.
Furthermore, the burden on social programs such as Social Security, pensions, and Medicare is expected to increase. With more retirees drawing benefits and fewer workers contributing to these systems, the pressure to reform and shore up these programs grows. The overall dependency ratio will also change, with a higher number of retirees supported by a relatively smaller working-age population, possibly affecting the standard of living for the average American.