This is part of the Globe and Mail's week-long series on baby boomers and how their spending, investing, health and lifestyle decisions could affect Canada's economy in the next fifteen years. Is Canada ready for the boom?
For more, visit tgam.ca/boomershift and on Twitter at #GlobeBoomers
The sharing economy is already taking shape, and no one needs to share more than the baby boomers. Cash-strapped in their senior years, they will eagerly share every kind of resource, from transportation through to housing. In need of work but not quite as in demand as they would like in the labour market, they will share jobs. And, as has been the case throughout their lives, their actions will create trends that will shape the larger economy.
We hear a lot about the sharing economy, although its definition is somewhat blurry. In its most basic form, it simply means renting or having part ownership of something, rather than full ownership. So, if you have ever ridden in a taxi or stayed in a hotel, you have been part of it. More recently, companies such as Uber and Airbnb – enterprises that use technology enabling peer-to-peer transactions – have fast-tracked it and increased its influence.
Aging boomers and the sharing economy go together like peanut butter and jelly (another trend boomers took mainstream). You can see that if you think about the boomers' defining characteristic as a generation. It's not that they are cutting-edge or cool – but that they are broke. According to 2013 research by the BMO Wealth Institute, Canadian baby boomers (who as of the 2011 census made up about 30 per cent of all Canadians, and all of whom will be over 65 by 2031) are on average more than $400,000 short of their individual retirement goals. To make up that shortfall, they will either have to work more or find ways to cut expenses. The sharing economy lends itself to both endeavours.
While they are still able to work, boomers will be a big part of a subset of the sharing economy that is sometimes called the "gig economy." Gigs are what they sound like: assignments, contracts or part-time jobs. They can be awesome, as when someone not quite ready for retirement earns a little consulting income. They can also be horrible, as when someone desperate for full-time work in his or her own field is offered part-time work in the service sector instead. The trends are being established now. According to Statistics Canada, the unemployment rate for those over the age of 55 was 5.8 per cent in 2014, but jumped to 8.4 per cent when those who are part-time but would rather be full-time are included.
The next thing to be shared is living space. Remember the Golden Girls, the protagonists of the 1980s television series? They may have been the beginning of a trend that is going to explode. As of 2014, 3.6 million Canadians over 55 – about 35 per cent of that age group – were single, separated, divorced or widowed, rather than married or living common-law. As they age, some of these seniors will have houses they don't want to give up, but on which the taxes and maintenance must be paid. Others will not have houses (having rented since the divorce, perhaps) and be looking for somewhere to live. Inevitably, home sharing will be an extremely viable and increasingly common alternative.
Given how tight they are with their cars, sharing transportation will be a thorny issue for the boomers. Still, given the expense of cars and the fact that health issues will eventually make it difficult for many to drive, the shuttling of seniors will soon become an issue. Public transportation is theoretically an option, except that it's limited outside of metropolitan areas, and many boomers will be concentrated in suburbs. But when boomers want something, they use their political might to get it, and that might mean demanding transit coverage in their communities, something that is going to be prohibitively expensive (cue municipal fiscal crises). More creative transit options will pop up as well. If we are lucky, technology will come to the rescue through something like self-driving cars. In the meantime, taxis, Uber and private ride-sharing services will also proliferate.
Gigs, roommates, rideshares – they may not be so common now, but look for boomers to do what they have always done and take what used to be marginal ideas into the mainstream. And remember, baby boomers know how to share: When they were tiny, they shared space as they spread their blankets on the floors of their crowded kindergarten classes to take their naps. As they grew up, they shared the living space in and around Canada's cities and bid up housing prices in the process.
As they move into their senior years, they will take the sharing economy to new heights, and the implications will be wide.
Linda Nazareth is an economist, author and senior fellow for economics and population change at the Macdonald-Laurier Institute. She is currently working on a book about the sharing economy.