Like a menacing “X” on the map of human history, transecting demographic trend lines show that, for the first time ever, the world’s elderly population is growing at a faster rate than its proportion of youngsters. A 2013 United Nations “World Population Aging” report concluded that at current rates, people 60 years and older will outnumber children younger than 15 by 2047, in part because people are living longer and fewer are being born.
Longer, healthier lives for more people would seem to be a human success story. But for years, demographers and government policymakers have been wringing their hands about a gathering “silver tsunami” that they warn could drag the world into a downward spiral: fewer workers, more old people requiring more care, higher healthcare costs, increased government outlays for social security and pensions, diminishing tax dollars to pay those obligations due to shrinking labor pools, stagnating economies, spreading poverty and global economic collapse.
HEALTHIER AND GREENER: GRAY IS GOOD
Faced with the inevitable, governments and businesses are rethinking old notions of aging. Maybe, new ideas suggest, being older is a good thing. After all, isn’t knowledge, experience, wisdom and skill worth something?
Laura Carstensen, director of the Stanford Center on Longevity in Stanford, California, said elders are not only more knowledgeable than their younger counterparts, but also more emotionally stable. Knowledge and stability are valuable resources for employers, particularly in knowledge economies.
A 2014 survey conducted by the Transamerica Center for Retirement Studies, meanwhile, found that 87% of the employers surveyed said older workers are a “valuable resource for training and mentoring”; 86% said they represent an “important source of institutional knowledge.” Employers said they would support flexible work schedules and other incentives to retain valuable employees, who would otherwise retire, for longer.
The National Academy of Engineering (NAE) in the United States found that many US companies are already active in retaining older workers. The NAE found an increase in policies aimed at extending the productive working lives of experienced employees, particularly in technical fields. The NAE also cited the new discipline of “human factors engineering,” which engineers and designers use to accommodate theunique needs of older workers when developing tools and processes for increased productivity. Such accommodations range from larger text displays to ergonomically redesigned manual switches that are easier for older, less nimble hands to manipulate.
WHERE GOING GRAY IS HARDEST
The aging trend hasn’t hit most of the world’s poorest regions. Isolated and increasingly urbanized “youth bulges” are growing in Pakistan, Afghanistan, Saudi Arabia, Yemen and Iraq while unemployment contributes to unrest. Sub-Saharan Africa cities are swelling with young people who abandon outlying rural areas, leaving the elderly to farm. And that means that even in developing nations, experts are concerned about aging.
“There is a real potential for investing in older populations to enhance prospects for development, but it’s not really mainstream thinking,” said Isabella Aboderin, head of aging and development programs for the African Population and Research Center in Nairobi, Kenya. For example, she said, 70% to 80% of the elderly in sub-Saharan Africa stay in rural areas, while young people move to growing cities.
“Small-holder farmers are mostly older; the people who remain doing the farming are mostly older,” Aboderin said. “The agricultural sector needs to be revitalized, for food security. Older adults are strategically important if you want to begin to change things.”
Governments are beginning to recognize the challenge, she said. In 2016, for example, the African Union adopted its first protocols on the rights of older people. If ratified by at least 15 member states, those rights become legally binding.
FEWER WORKERS, HIGHER PRODUCTIVITY
In developed countries, evidence of aging’s effects on the workforce is already evident. The aerospace and aviation industry in North America, for example, which powers many of the region’s defense programs, will lose about one-third of its workers to retirement in the next few years, according to industry officials, who have warned US Congressional lawmakers that action is needed.
“It’s about qualified people. They (aerospace manufacturers) don’t have enough of them,” said aerospace consultant Eliot Norman of US-based law firm Williams Mullen. Skilled workers are aging out of the industry at the same time that manufacturers have back orders sufficient to keep their plants humming for 12 to 15 years. And it’s not just the US: Petroleum, chemicals, mining, defense and aerospace in Europe started feeling the pinch more than a decade ago, according to a IBM economics report on aging workforce dating back to 2005.
Some countries are looking to immigration to replace aging workers. Others want to bring more women into the labor force, important because women live longer than men. China, whose over-65 population is expected to equal the total US population by 2050, scrapped its one-child policy in October 2015 and now allows couples to have two children.
Falling employee headcounts in Germany, Italy, Japan and Russia mirror the aging trends in those countries. China and South Korea will soon follow, according to new research from the McKinsey Global Institute (MGI), the business and economic research arm of global management consulting firm McKinsey & Company.
The twin engines of expanding employment and rising productivity powered world economic growth over the past 50 years, MGI researchers say. Growing workforces are over due to population trends, but productivity can still climb. “The question is, how much more are we going to have to get out of productivity if we’re going to keep up the growth rates that we’ve had?” said James Manyika, a director at MGI. It’s a daunting challenge: productivity growth over the next 50 years must be 80% higher than the past 50 years to maintain global GDP at current levels. “That’s an extraordinarily high number.”
For 20 years, MGI has studied agriculture, manufacturing and automotive, food processing, retail and healthcare to understand how productivity might be increased. “We found opportunities to speed up productivity growth to 4% a year, which is more than enough to fully counter the demographic slowdown,” said Jaana Remes, a partner with MGI. Existing best practices and ongoing improvements are already increasing productivity. The rest must come through upgrades in capital and technology, long-term investment goals and non-protectionist economic policies, Reemes said.
No wonder gray has suddenly become good; for the first time in history, the world actually needs the experience, inventiveness and labor of its elderly population to maintain its standard of living. ◆
See why older populations are good for the economy:
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