There's a looming threat to the economy that isn't getting much attention. The "Silver Tsunami" is what some are calling it---millions of small businesses owned by baby boomers who are now at or near retirement age. "The Silver Tsunami basically refers to the idea that we're going to see a large amount of business owners retire, and thus the greatest transfer of wealth that we've seen in generations, and it's happening right now," says Franzi Charen with Project Equity, the non-profit group that has done extensive research on the issue.
The research estimates there are some 2.3 million small businesses nationwide owned by baby boomers, employing near 25 million people. While recent studies show some baby boomers are delaying retirement, a mass retirement would have direct consequences. "What's going to happen to these businesses that simply close their doors because of lack of succession planning or other reasons, and what's going to happen to the employees," asks Charen. "For businesses to close for no reason, just because of lack of planning, or because of an emergency, or because someone got old...that doesn't do much for the community and for local economies."
Project Equity recommends that business owners have a succession plan to transfer ownership of the business to their employees as a worker-cooperative. The group argues that is a much better solution than simply shutting down the business or selling it to a larger company that may not have the employees' best interests at heart. "(Transferring to employee ownership) expands the ownership base, and it allows the business owner to retire, and often to retire well," says Charen.