The Aging Crisis

What is the scope of the issue? It is projected that by the year 2030 there will be three times the number of people 60 years and above then there is today, in Canada. The rest of the world’s population will experience only a 68% increase.

Causes: Life expectancy has increased, primarily due to improved health care. Other factors include: Healthier lifestyle Reduction in cancer deaths and heart disease. Improved safety in areas like the automobile (tires, speed limits, seat belts, air bags, etc.)

At the same time there has been a world wide reduction in fertility rates. The global average fertility level now stands at 2.7 births per woman; in contrast, in the early l950s, the average number was 5 births per woman. Fertility is now declining in all regions of the world. Growing number of elderly, even in developing world.

Good - leads to more sustainability. Bad - leads to the “double demographic punch”. (More older people and fewer younger people to support them.) Dependency load is reversed. Ages 0 – 15 and 65 + are dependent on the work force 15 – 65. In the past the work force was supporting the 0-15 group, now it has to support the 65+ group. More costs involved in supporting an older population – health care especially. The result or payback for the investment is just death. A young person will go on and be productive.

Other consequences of having an older population: More conservative thinking Economy shifts to cater to them – Music, cars, movies. Senior discounts, all inclusive travel packages etc. Society shifts to cater to them – Old age homes, Wheel chair access, amplified phones, later marriages etc.

Problems in a developing world: Lack of pensions and health care in developing world could lead to a disaster. Shift of people away from families as people move to urban areas. Incomes in urban areas are not large enough to support older people back in villages. Longer life spans don’t equate to healthier life spans. People who live longer consume more health care dollars.

Solutions for Canada? Encourage private savings. Why? Because public pension plans are notoriously poor performers. They are often “flow-through” plans. Paid for with tax revenues and not a real fund of money. More people retired than are paying taxes is a possibility. Governments often “raid’ plans or force them to invest in struggling state companies. The teacher’s pension plan owns a major part of the Maple Leafs.

Hand over government pension plans to private managers. Raise retirement age, eliminate rewards for early retirement, reduce retirement benefits, redesign plans to aid the poor elderly only. This is an interesting one because society is going in the opposite direction with early retirement. Encourage immigration.

The End!