Wed 19 Jul 2006
The United States is facing a big economic problem, along with Europe, who has it worse. The problem is simply that as the [tag]population[/tag] grows older there are fewer young people to work and support the economy. There are two separate causes: Americans now have few children, just equal to the replacement rate, and [tag]life expectancy[/tag] for Americans has increased – to 77.6 years up from 66.2 years in 1950. A third factor is the “baby boom” after World War II whose members are reaching retirement age.
This economic problem is substantially one of policy and the expectations of Americans. The policies established in the ’50s assumed that one would retire at 60 or 65 years and have 5 or ten years of retirement. We now have an average life expectancy of 11.6 years after a 65 year retirement instead of the 1.2 year expectancy in 1950.This means that for a 47 year career, the retirement burden was 2.6% in 1950, now it is 24.6%. The math just does not work, unless you factor in the economic progress over the past 50 years. (More accuracy in these calculations would be available if life expectancy at 65 were used. I intend to revise this when I find the data for 1950)
The simple solution is before us: Raise the [tag]retirement age[/tag] by one half year each year for the next ten years. This simple change would completely alleviate the crunch to Social Security and many pension plans.
This would be a very unfair policy, taken alone, as some professions are sufficiently physically demanding that they cannot be continued into old age for strength, health or other reasons. Examples are sports figures, high steel workers, miners, masons, sex workers, etc.
It may be impracticable for people in these professions to transition to other occupations that will produce the same level of income, so alternatives must be established for those who cannot continue in their original occupation.
I suspect that revising policies and expectations to encourage a new philosophy that one will continue full employment through the 60’s and taper off professional activity over time. I believe that it must be much more satisfying to gradually decrease professonal involvement, instead of a sudden retirement with a “banquet and a watch”.
Teachers could decrease class load, office workers could go to half time, swapping off with others, vacations could increase to permit travel, etc. There are hundreds of thousands of folks who go back to work in minimum wage jobs largely to satisfy the need to be productive – even if it is at a small fraction of their previous compensation. Why should we waste the capacity of the wisest group of potential workers.
The argument can be made that many of these folks lack the skills needed to be competitive. This may be true of those who have actually stopped working. This is not the case of someone who is now working and is seeking to continue useful employment, but no longer climbing the corporate ladder.
It is likely that having people extend their work lives will extend their overall life span. Having things to do and a purpose in life is something that keeps one healthy.
No Responses to “ Dealing with an aging population ”
You must be logged in to post a comment.