Friday, October 15, 2010

Book: Global Aging Spurring Globalization, with Younger Countries Poised For Growth

The New York Times Magazine has published an extensive excerpt from a new book by Ted Fishman (Shock of Gray: The Aging of the World's Population and How it Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation) in which he, looking at aging demographics globally, argues that he pace of global aging is quickened by the speed and scope of globalization, that these intertwined dynamics bear on the international competition for wealth and power, and that the high costs of keeping our aging population healthy and out of poverty has caused the United States and other rich democracies to lose their economic and political footing. Thus, "[c]ountries on the rise amass wealth and geopolitical clout by refusing to bear those costs. Older countries lose work to younger countries."

Among the many examples Fishman offers of how countries are differing in their approaches to aging populations he shows what China is doing to lure the world’s production and capital while its work force is young.
In large part, it does this by denying meaningful pensions and health care to its people today. Not only do the vast majority of elderly Chinese have little more than their meager savings, but today’s workers have pensions so measly as to be irrelevant. To keep the cost of manufacturing in China low for the rest of the world, the young Chinese work force is, for now, rarely provided more than token pensions, health care or disability insurance. In aging, developed countries, older workers with long tenure are usually at their peak in terms of pay and the cost of their benefits. Here in the United States, for example, health care costs for workers who are between 50 and 65 are, on average, almost two times what they are for their peers in their 30s and 40s. When the median age of workers climbs in the United States, so does the cost of insurance their employers must buy for them.
However, Fishman also points out that the United States is not in the same boat as many rich countries where aging populations have taken hold. where balization can take hold with remarkable swiftness. Thus, Japan was one of the youngest countries in the world until around 1950, and now may be the world’s oldest. In contrast, the United States, while subject to the same two big trends of longer lives and smaller families, is aging much more slowly due to the arrival of young immigrants, including millions from Latin America.

Fishman also addresses various aspects of the aging workforce. For the United States, he notes one apparent contradiction: that at the same time that unemployment among older workers is at a peak, the percentage of older people with jobs is also near a high, because more people must work to make ends meet. He also points out that there is a transformation starting of older workers into a giant contingent workforce. He also suggests that looking at what is happening in "older" countries can help inform where the United States is heading:
In Japan, retirees from the biggest companies are well provided for, but for many of the rest — workers at smaller companies, the self-employed — the fear of outliving their money is real. One in five elderly Japanese lives in poverty. So the Japanese stay on the job when they can. Since 2006, the number of Japanese still working after the customary retirement age of 60 has risen by more than 11 million. Most are officially retired but are back at their companies, under contract. They typically earn about half their former wages.
Source: New York Times Magazine "As Populations Age, a Chance for Younger Nations" (October 14, 2010)

No comments: