The United States and the world are on the verge of a major demographic shift — one that poses significant challenges to the economy, national security and family life.
Over the next 20 years, the United States’ population will age at an unprecedented rate. In 2030, the country will have 72.1 million people older than 65; more than double the elderly population in 2000.
The coming “gray wave” is not just a domestic phenomenon. There are already more elderly people in the developed world than children, and the developing world will follow in the coming decades, experts say.
The entire globe is aging because of a variety of factors that include declining fertility, longer life expectancy, widespread urbanization, changes in married and family life and the advancing years of the baby boom generation.
While saying that aging is a “triumph of development,” the United Nations warns that global aging presents significant challenges to welfare, pension and health care systems in the developed and developing worlds. Nations that are already facing severe fiscal crises — especially in Western Europe — stand to see their economies further strained in the absence of fundamental reforms.
In the United States, the federal government throughout the next 30 to 40 years will have to spend more on entitlement programs such as Social Security and Medicare because the elderly retired population will vastly outnumber working-age people who pay into the system with their taxes. As it now stands, some estimates have Social Security becoming insolvent by 2033.
“The social programs are absolutely unsustainable,” said Steven W. Mosher, president of the Population Research Institute, a nonprofit research group that battles against the prevailing theories of overpopulation and works to expose human rights abuses in coercive population control programs.
Mosher, who in 1979 became the first American social scientist to visit China, told Our Sunday Visitor that countries like the United States face a “descending spiral” given the current demographic and economic models.
“As the population ages, you have to extract more money from the working population, which gets smaller,” Mosher said. “And what happens when you do that? You put an increased tax burden on young couples, their fertility tanks because now they have less disposable income and the problem gets worse over time.
“The system collapses economically and it collapses demographically,” Mosher said.
For the last several years, the United Nations and other organizations have studied global aging, and the reasons why the average age of the world’s population is growing at an unprecedented rate.
A 2008 report by the National Institute on Aging estimated that the number of people worldwide age 65 and older will grow to 1.3 billion by 2040, doubling from 7 percent to 14 percent of the world’s population.
“The world’s population of people over age 65 is growing rapidly, and with it will come a number of challenges and opportunities,” NIA Director Dr. Richard J. Hodes said in prepared remarks.
The United Nations expects the global elder population to reach 2 billion by 2050, with 3.2 million people having reached their 100th birthday that year, which would be a tenfold increase from the reported 316,600 centenarians worldwide just two years ago.
Currently, Japan is the only country with an older population of more than 30 percent. But by 2050, 64 countries are expected to reach that proportion, according to the United Nations.
Meanwhile, the U.S. Administration on Aging estimates that the United States’ population of people ages 65 and older reach 72.1 million people by 2030; more than twice their number in 2000 and comprising about 19 percent of the country’s population.
The United Nations says global aging is “pervasive,” “profound” and “irreversible.” The United Nations has also said that increased longevity is “one of humanity’s greatest achievements” as people live longer “because of improved nutrition, sanitation, medical advances, health care, education and economic well-being.”
Susan Yoshihara, senior vice president for research and director of the International Organizations Research Group for the Catholic Family and Human Rights Institute (C-FAM), has edited books and written articles on global aging, which she says is unprecedented because there is no historical record of something like it ever happening before.
Yoshihara said global aging will “transform all facets of human life,” from economics to politics, where an older population could shape voting patterns and wield more political power. She added that “never has the viability of civilization been threatened by the accumulation of millions upon millions of individual choices not to reproduce.”
|Susan Yoshihara, senior vice president for research and director of the International Organizations Research Group for the Catholic Family and Human Rights Institute (C-FAM) Thinkstock
“For the last four decades, scholars have told us that a declining population will make the world more secure,” Yoshihara said, referring to academics such as Stanford University professor Paul R. Ehrlich, who wrote the “The Population Bomb” in 1968. Countless readers and fellow academics supported Ehrlich’s thesis that the world’s population would increase to the point of causing mass starvation and societal upheaval without government-sponsored population control programs.
Instead, Yoshihara and a growing number of demographers say the numbers are trending downward, with global aging and depopulation the result of people having fewer children.
“We’re finding the exact opposite has been true,” she told OSV. “Population decline over the next 20 years will make the world a less stable place to live as the great powers lose the human capital they need to run their economies and national defenses. (The countries) will turn inward. There will be fewer workers to fuel their economies and less ingenuity to create new ways to face the challenges of the future.”
Looming fiscal threat
The expected growth of the older population “should not be an excuse not to act but rather seen as a call to action,” the United Nations said in its 2012 report, “Ageing in the Twenty-First Century: A Celebration and a Challenge.”
The United Nations called the aging demographic a “megatrend that is transforming economies and societies around the world,” and called upon national governments to implement fundamental fiscal reforms. The United Nations added that the most serious impacts could be seen in developing countries without safety nets or legal protections in place for older people.
|Some estimates have Social Security becoming insolvent by 2033. Shutterstock
In January, Fitch Ratings, a global rating agency, said the world’s aging population could put many countries at risk of a second fiscal crisis. Without implementing any reforms, countries on average can expect to see their national budgets worsen by 0.6 percent of gross domestic product by 2020, and 4.9 percent of gross domestic product by 2050.
Consequently, those countries would experience escalating debt-to-GDP ratios, with the average European Union member’s debt-to-GDP ratio rising by 119.4 percent by 2050, according to Fitch Ratings.
“Without reforms to boost labor productivity and/or participation rates in many other advanced economies, population ageing will cause potential GDP growth to decline over the long-term, exacerbating the fiscal challenge,” said Fitch Ratings, which added that without major pension reforms, the agency expects to take negative rating actions over the coming decade on countries facing the most pressing aging problems.
According to Fitch’s Sovereign Rating Model, Japan, Ireland and Cyprus face the largest jump in aging costs over the next decade, while Luxembourg, Belgium, Malta and Slovenia face the most severe impact over the long term.
However, Fitch said effective reforms are possible, and pointed to recent measures taken in Portugal, Italy and Greece that have “effectively neutralized” the long-term impact of aging on public finances in those countries.
The United States also “has many good options for responding to population aging,” said Roger Ferguson, CEO of TIAA-CREF and co-chairman of a committee that wrote a congressionally mandated report last year for the National Research Council.
“Nonetheless, there is little doubt that there will need to be major changes in the structure of federal programs, particularly those for health. The transition to sustainable policies will be smoother and less costly if steps are taken sooner rather than later,” Ferguson said in prepared remarks.
The National Research Council’s 2012 report, “Aging and the Macroeconomy: Long-Term Implications of an Older Population,” said Social Security, Medicare and Medicaid are on “unsustainable paths” as the combined cost of those programs currently amounts to about 40 percent of all federal spending, and 10 percent of the nation’s gross domestic product.
With longer life expectancy and lower birth rates, those federal programs will have more beneficiaries with fewer workers paying into the system in the coming decades. Taking into account soaring health care costs, the aging population will drive up public health spending and demand an ever-larger and growing share of national resources, according to the National Research Council.
The national response will likely have to include major structural changes to public support programs, more savings during people’s working years and longer working lives, meaning people would no longer retire at age 65.
“Although 65 has conventionally been considered a normal retirement age, it is an increasingly obsolete threshold for defining old age and for setting benefits for the elderly,” Ronald Lee, professor of demography and economics at the University of California, Berkeley, and committee co-chairman, said in prepared remarks.
The National Research Council report also says there is a “substantial potential” for increased labor force participation among the older generation that would boost national output, slow the draw-down on retirement savings and allow workers to save longer.
The report emphasized the need to act now to craft a balanced response on the national level.
“Population aging does not pose an insurmountable challenge provided that sensible policies are implemented with enough lead time to allow peoples, companies and other institutions to respond,” Ferguson said.
Familial, societal challenges
In addition to economics and fiscal policy, global aging is associated with significant cultural and societal impacts.
Family sizes are decreasing, and intergenerational support systems are changing. In times past, extended families cared for the elderly, but the costs of doing so are skyrocketing and urban migration has seen more young adults leave their parents to live and work in cities.
The United Nations’ report also showed how older people’s living arrangements are changing with society. There are increasing numbers of “skipped generation” households consisting of young children and older people, especially in rural areas, because of younger adults migrating to the cities. In rural China, the report estimates that grandparents are taking care of 52 million grandchildren.
The United Nations also expressed concerns about “multiple discrimination” experienced by older persons, especially older women, in areas such as jobs and health care, property rights, income and social security. The report warned that the elderly’s skills and knowledge could be wasted by them being underemployed and underactive, causing the elderly to become a drain on a nation’s resources.
A corresponding cultural trend to global aging, Yoshihara also warns, could be the increasing pressure for euthanasia. Already two states — Washington and Oregon — have legalized assisted suicide, while voters rejected a similar measure in Massachusetts last November. Opponents of euthanasia say it violates human dignity, leads to higher suicide rates and creates expectations that the sick and elderly should commit suicide to spare themselves and loved ones of suffering.
An aging society relies on a compassionate and professional medical community, yet Yoshihara warns of the mental and emotional pressures the elderly might face in the coming years and decades to spare their families the burdens of caring for them.
“It will be our example, our own transformation, that will help others choose healing love over selfish resignation,” Yoshihara told an audience during a September 2011 talk at the annual Human Life Guild Day sponsored by the Diocese of Providence, R.I.
Yoshihara added that the “profound, pervasive and irreversible” effects of an aging society “require not just doing something for the world but being for the world.”
“I wonder, though, when historians and theologians look back on this era of aging, what will they say about our generation?” she asked. “Were we allowed this unprecedented period of old age in order to be the next ‘greatest generation’? Not to fight on the ground but to engage the epic spiritual battles of our time? And when they look back will they say that we missed the opportunity or rose to the challenge?”
Brian Fraga writes from Massachusetts.