COLUMN-How an aging population could be tonic for the economy
(The opinions expressed here are those of the author, a columnist for Reuters.)
By Mark Miller
CHICAGO May 29 (Reuters) - Economists worry about something called the economic dependency ratio - the number of people over age 65 to 100 working-age people. The U.S. Census Bureau projects that the ratio will jump sharply in the years ahead as the population gets grayer - from 22 in 2010 to 35 in 2030.
The total dependency ratio, which also includes children, won't rise nearly that quickly, but politicians and policymakers often marshal the elderly dependence figures to conjure all manner of economic doomsday forecasts - soaring budget deficits, the collapse of Social Security and Medicare. You'd think we're headed for block-to-block intergenerational warfare raging in our streets.
Those scenarios aren't likely to occur, but there are reasons for concern. We do face a retirement security crisis prompted by low saving rates and the decline of traditional pensions. Healthcare costs could start to soar again. Demand for long-term support and services may explode.
But what if we could change the math? Paul Irving argues that we can - and must - view aging as a huge potential opportunity in a fascinating new volume called "The Upside of Aging: How Long Life is Changing the World of Health, Work, Innovation, Policy and Purpose" (Wiley, April 2014).
Irving is president of the Milken Institute, the nonpartisan think tank focused on public health, medical research, economics and financial markets. The book is a compilation of essays by Irving and other experts on the tie-ins between aging and health, social entrepreneurship, labor markets, technology and marketing.
Irving acknowledges the downside of an aging population here in the U.S. and globally. "It's not that aging doesn't pose some major challenges to overcome," he says. "So often the framing is negative, but there are some very positive potential outcomes of an aging society."
That starts by viewing rising longevity as a gift, not a problem. Average life expectancy in 2030 will be 10 years greater than it was in 1980, Irving notes. That is an opportunity for people to have longer productive working lives, and it should drive economic growth as new products and services are launched to serve an older population.
Surveys show many older Americans intend to work longer. Gallup reports that the average age when people say they retired has risen from 57 to 61 in the past two decades. Forty-nine percent of working baby boomers say they don't expect to retire until they are 66 or older. Ten percent predict they will never retire.
The "encore career" movement - marrying work with social purpose - also has gained some traction, although it has flourished primarily among white-collar professionals. Irving is an example; in his late fifties he resigned as partner and chief executive officer of Manatt, Phelps & Phillips, a prominent law firm based in Los Angeles. "I was looking for a way to focus on doing things for the common good," he says.
He spent a year in Harvard University's Advanced Leadership Initiative, which trains leaders for new roles in the social sector, and then joined the Milken Institute.
Irving says workers of all kinds need the chance he had. "It's critically important to encourage and enable people at all levels of the economic pyramid to continue to work. It might be that someone does a physical job that becomes very difficult to do in his fifties, so we should make it easy for that person to be retrained and find new opportunities."
Changing attitudes won't be simple or quick. Ageism and age discrimination in the workplace need to be addressed, and we need new pathways in the world of higher education to encourage lifelong learning and career retraining.
"We need to change our ideas about traditional retirement - it should be retired," Irving says. "It's bad for your wealth, and bad for your health."
Irving compares the challenge to the struggle to change societal views on race or gender equality. "Changing the culture is a complex process, and it often takes a long time," he says. In his book, experts in psychology, gerontology, high-tech innovation, labor, education, urban planning and more tackle the issue.
He also worries that we're not moving fast enough. "Aging is catching up with us at a very fast pace, but we don't have a system yet that actively embraces the possibilities. We need to move much more quickly."