The corner office once filled by a seasoned executive now sits empty. Down the hall, a bustling customer service team is suddenly short two people, while across town, a construction site misses its foreman. In boardrooms and break rooms alike, a quiet but profound shift is taking place. The American workforce is not only aging out—it’s not being replaced fast enough. This isn't just a demographic shift; it's a looming financial imbalance that touches everything from productivity and tax revenue to retirement savings and child care affordability.
Across dinner tables, many young adults now talk more about budgeting apps and side hustles than about baby names and future plans for a growing family. And it’s no mystery why. Financial insecurity is making it increasingly hard to plan for children, let alone raise them. The cost of living is up, wages haven’t kept pace, and inflation, especially in areas like housing and health care, has made long-term planning more complicated. The dream of a suburban home with kids and a golden retriever feels more like a nostalgic story than a financial goal.
The data backs up the feeling. The U.S. population over 65 continues to grow quickly, while the population under 18 is quietly shrinking. It might not sound alarming at first—after all, an older population can be a sign of better health care and longer life spans. But when those older adults retire, and fewer young workers are around to fill their roles, the economy feels the squeeze. Baby boomers, born between 1946 and 1964, are leaving the workforce in massive numbers. And when they go, they take with them decades of knowledge, experience, and economic contribution.
Imagine a hospital where seasoned nurses, burned out or ready for retirement, leave before replacements are fully trained. Or think of a manufacturing plant that can’t find skilled technicians fast enough to replace retiring experts. These gaps don't just delay projects—they drag down productivity, stall innovation, and eventually drive up the costs of services for consumers. For investors and economists, this spells a troubling forecast: lower GDP growth, tighter labor markets, and ultimately a more fragile economy.
This workforce gap is made worse by declining fertility rates. In 2012, the average American aged 29 to 39 expected to have 2.3 children. By 2023, that number had dropped to 1.8. That might not seem like a huge change, but for a country to maintain its population size and support an aging generation, each couple needs to average about 2.1 children. Falling short of that has consequences, especially for long-term labor supply and financial sustainability.
The most common reason cited by young people for putting off parenthood? Money. Raising a child in America now costs well over $250,000 from birth to age 18—and that's before college. Child care alone is a major financial strain. In May 2025, child care costs rose another 3.5 percent, according to the most recent consumer spending data. In cities like Boston and San Francisco, monthly day care expenses can rival a mortgage payment. For a young couple already paying off student loans and coping with high rent, it's a cost many just can’t justify.
Even more telling is how this affordability crisis affects day-to-day life. A young marketing professional in Chicago recently shared that she and her husband, both working full-time, had to take alternating shifts just to care for their two-year-old daughter. After running the numbers, they realized that hiring help would cost more than one of their salaries. They’re delaying having a second child indefinitely. Multiply that decision by millions of similar ones across the country, and it becomes clear why labor economists are sounding the alarm.
But it's not just parents feeling the squeeze. Retirees are also being impacted financially. Many baby boomers exited the workforce earlier than expected during the pandemic and never returned, either due to health concerns or simply rethinking their priorities. But without enough young workers to support payroll taxes and economic growth, programs like Social Security and Medicare will face added pressure. A smaller labor pool supporting a larger retired population is a difficult financial equation to balance, and one that will likely lead to policy shifts in tax strategy or retirement benefits.
At the same time, employers are scrambling to find talent. High-paying roles in health care, technology, and skilled trades are going unfilled, not because people aren’t willing to work, but because the qualified workers just aren’t there. Companies are responding by offering higher salaries, signing bonuses, and flexible working arrangements. But money alone isn’t solving the issue. In many cases, the labor simply doesn’t exist. It’s hard to hire a plumber, nurse, or data analyst when the talent pool itself is shrinking.
This shortage also reverberates into real estate and urban planning. Cities that once built new schools and housing developments to accommodate young families are now facing different challenges. In places like Vermont and Maine, there are already more residents over 65 than under 18. Small towns are closing elementary schools due to declining enrollment, while retirement communities expand. This reversal in demographic patterns reshapes the local economy and the kind of public investments communities prioritize.
There’s also a cultural side to all this. In past generations, having a large family was more common—and often a source of pride. Today, that notion has shifted. In a fast-paced, gig-driven economy, the idea of having multiple children can feel overwhelming. A young software engineer in Austin recently shared that he and his partner view having children as “financially irresponsible” given the instability of the tech market, rising housing costs, and uncertain climate policy. Their story isn’t unusual—it reflects a broader sentiment that the future feels too uncertain to plan for a family.
For policymakers and economists, these personal choices have national implications. When fewer people enter the labor force, tax revenue shrinks. When fewer people spend on child-related goods, industries like retail, education, and pediatric health services feel the pinch. And when older adults retire without a strong financial base or social support system, the burden often shifts to already-stretched public programs.
Some might suggest that immigration could be the answer—and in part, it is. Immigrants have long filled essential roles in the American economy, from farming to engineering. But immigration alone can’t offset the long-term demographic changes already in motion. It’s a piece of the puzzle, not the whole solution. What’s needed is a broader rethink of the financial incentives around work, family planning, and retirement.
At the end of the day, this isn’t just a numbers issue—it’s a deeply human one. People make decisions about work, family, and the future based on the realities they live every day. When child care costs more than rent, when retirement feels insecure, and when wages can’t keep up with inflation, it’s no wonder the country is facing a shrinking workforce. The question isn’t whether we’ll feel the consequences—it’s whether we can adapt in time to soften the impact.