More and more people live to be 100 years old. Is the world ready?
The situation is bleaker in China (life expectancy: 78), which is faced with a shrinking population. One reason: It costs more to raise a child in parts of China than it does in the United States, a reality that pushes families and working women to choose not to have children (despite a range of government incentives to encourage them). . The not-so-distant ramifications: A labor shortage could jeopardize economic growth and undermine Beijing’s ability to tax its younger, working population to raise enough funds to support the world’s largest retiree population.
The rating agency S&P Global sees warning signs around the world, such as in China and France. Lower birth rates, struggling public finances and rising interest rates combined with longer life expectancies are creating a “global aging crisis”.
Unless countries embark on serious “policy measures to curb age-related spending,” two Standard & Poor’s analysts Samuel Tilleray and Marko Mrsnik wrote in a note this week, a potential avalanche of longevity-driven junk ratings will follow, and the costs for the future raise generations.
“Just over half of the 81 sovereigns we analyzed would have credit metrics by 2060 that we associate with speculative sovereign ratings (‘BB+’ or below).”
Welcome to the “longevity economics”
At the World Economic Forum, organizers tried their best to change the grim Malthusian narrative of aging. Gone was the talk of time bombs or a “silver tsunami,” replaced by high-level discussions of what the forum is calling “longevity economics.” A central theme: If we are to live longer, we must adjust some life goals and also work longer.
Darryl White, CEO of Canadian bank BMO, said society needs to think about a different kind of lifehack. For starters, we need to abandon the school-work-retire system. Life is “nonlinear,” he told a panel on superaging.
“I might decide that I want to start working earlier. I could decide that I want to retire later. I might decide that I want to have various signings for my career as I reinvent myself.”
Upskilling and reskilling are important to this strategy, an investment commitment that must be shared by workers, employers and governments. The upside: The WEF projects that improving access to reskilling and lifelong learning would increase workplace productivity and add $8.3 trillion ($11.9 trillion) to global gross domestic product by 2030.
Giving workers the opportunity and resources to work well past retirement age is good for society and business, said Lynda Gratton, professor of management practice at London Business School and co-author of The Hundred-Year Life: Living and Working in an age of longevity.”
“We know that people’s social capital deteriorates when they stop working in their early 60s. Your networks are deteriorating. They’re not that cognitively active,” she told DealBook. Also, staying longer at work would help their personal finances, which would take some of the strain off the pension system.
Ageism, she said, is becoming more pervasive in the corporate world, and it could hamper corporate productivity. “I want companies to be held accountable for age discrimination just as they are for any other form of discrimination,” she said.
“I want companies to have to report how many people they have in different age groups, so we can get a sense of, ‘Are you hiring people in their 60s and 70s?'” She said such a move would put management under pressure To hire from a broader talent pool. And companies would see the benefits of building multi-generational jobs.
“An enormous burden for the young generation”
Young people who are struggling to get started in their careers may also wish to have such data reported. Noura Berrouba, President of the National Council of Swedish Youth Organisations, told the WEF panel that age discrimination affects job prospects for both young and old alike.
“If we’re being honest, the flexing of our demographic curve is going to be a huge drain on the younger generation,” she said.
She proposed more progressive tax policies, fairer wages and tighter scrutiny of corporate governance to ensure enough money goes into the collective pot to fund more people who receive a Social Security check.
Governments have constantly made changes to national pension policies in recent years. The minimum retirement age is 62.5 on average across OECD countries, but will rise to 64 in the coming years as a number of countries, including Denmark, the Netherlands and Sweden, raise the minimum retirement age in line with rising life expectancy.
Hervé Boulhol, the OECD’s senior economist specializing in pensions, resents the idea of an aging time bomb threatening the world’s largest economies. However, he sees a risk if politics and business do not address the issue. “Yes, the clock is ticking,” he said.
This article originally appeared in The New York Times.
https://www.smh.com.au/business/the-economy/more-people-are-living-to-100-is-the-world-ready-20230122-p5cek4.html?ref=rss&utm_medium=rss&utm_source=rss_business More and more people live to be 100 years old. Is the world ready?