Boomers may lead next start-up boom

Boomers may lead next start-up boom

August 31, 2005

Report finds seniors increasingly opting for
self-employment

07:05 AM CDT on Friday, August 26, 2005

By DANIELLE DiMARTINO and VICTOR GODINEZ / The Dallas
Morning News

Maybe it's not such a bad thing seniors are rejoining the
workforce in droves.

At least that's the take on a new report out of
outplacement firm Challenger, Gray & Christmas, which
tracks layoff activity and hiring trends.

The country, it would seem, is standing at the precipice of
another explosion in start-up activity, the likes of which
haven't been seen since the dot-com revolution of the early
1990s.

"This time around, however, the burst in entrepreneurial
activity will not be led by 20-somethings," the report
suggested, "but by baby boomers and would-be retirees in
their 40s, 50s, 60s, and even 70s, who are better educated,
healthier and more tech-savvy than their predecessors."

By all appearances, the wave of boomer entrepreneurship has
already started.

Of the 3,000 job seekers interviewed for the Challenger
report, 13 percent opted to start their own businesses in
the second quarter.

The number is up 10 percent from the same period last year.

Of that slice, 87 percent were over 40 years old.

Using previously unpublished data from the Bureau of Labor
Statistics, the Challenger report revealed that the number
of those 55 to 64 categorized as self-employed in
non-agricultural industries has increased 29 percent in the
last five years. The number 65 and older has increased 18
percent.

"All told," the report said, "the boomer-and-older now
account for 54 percent of self-employed workers."

Part of the aging entrepreneur phenomenon can be explained
by simple demographics, said Dr. Mike Davis, a lecturer at
the Cox School of Business at Southern Methodist University
in Dallas.

"Everybody is older than they used to be," Dr. Davis said.
"And I mean that seriously. The population is aging."

But the data in the Challenger report suggest
self-employment is rising faster among the 40-and-up
generation than actuarial tables alone would predict, he
said.

"That's clearly outpacing the change in the population,"
Dr. Davis said.

Some boomers clearly are working out of necessity.

"For many, imploding pension plans and a volatile stock
market have diminished retirement savings," the report
said. "To make matters worse, many aging workers suddenly
found themselves out of work due to corporate downsizing."

A survey by U.S. News & World Report revealed that more
than half of 45-to-54-year-olds have less than $50,000
saved for retirement.

"I think this notion of age 65 retirement, that was for a
previous generation," Dr. Davis said. "People are not going
to be retiring at 65 when they plan to live to 90."