In this video, Zoe Deborah Terner (daughter of managing member Daniel Alan Terner) presents her economic perspective on the extent to which the world should be accommodating for an increasingly older society. Presented in 2017 for Cambridge AICE Global Perspectives. Zoe Deborah Terner is not an employee of Terner Elder Law, P.L. (yet).
Hello, my name is Zoe Terner, candidate number 0041, center number US799, and my group’s question is, “To what extent should the world be accommodating for an increasingly older society,” and I will be examining this issue from the economic perspective.
According to data collected by the United Nations, the number of global citizens over 60 will triple between the years of 2007 and 2050, and those over 80 will quadruple. This means the world can expect 2 billion people over 60, and 400 million people over 80.
Within this older population, 64% of people currently live in less developed regions. By 2050, this number will grow to 80%. This is incredibly problematic given that these regions often don’t have the resources to support a growing dependent population.
This is seen as a triumph of the human lifespan, but brings with it a host of questions that society has never before had to answer.
This project will thusly analyze select aspects of the economic issues. Many gerontology specialists are calling for a complete housing, transport, and infrastructure revolution in cities with a larger elderly population; is this a burden or benefit to the economy? What does economic care look like for the 64% of older people living in less developed regions? And, finally, do elderly people have to compose a dependent population, or would this simply devastate economies? With this in mind, what is their place in the workforce– and what should it be?
The Carillon project in Illinois is a site purchased for $12.1 million which will be composed of housing units specifically for the elderly population of Chicago.
Ruth Fitzgerald, the president of the Joliet/Will Center for Economic Development, says: “It brings the perfect resident to Will County, who has no children but still pays taxes to the school district.” And this has proven to be the case, as it is estimated that Carillon will bring about $20 million tax dollars in total. Additionally, Carillon is expected to have a staff of 300 people, meaning 300 new jobs will be opened for younger citizens in the area. Given this case study, from an economic standpoint, building community—communities which specifically serve the elderly community are tremendously beneficial for the entire area.
However, a development similar to Carillon, Stonegate West, has had to change its marketing strategy from being age-restricted to simply age-targeted, as many of the pricey units simply weren’t selling to those in the correct age-range. Theoretically, projects such as these have the potential to bring in revenue, but could also represent failed government spending if no one actually moves in.
In Japan, Japan has begun to model the American Continuing Care Retirement Community (CCRC) program, in which elderly citizens will relocate to specific communities, like Carillon.
The Japanese government has committed to subsidize these CCRCs in rural areas. This raises the question of if such communities would be as economically beneficial as private, American ones have been. However, the Japanese minister in charge of revitalizing regions has noted that, in the US, many of these facilities are only open to the wealthy, and this will not be the case in Japan.
One such example is called Share Kanazawa, which contains 32 houses for elderly people, as well as boasting facilities like gymnasiums and restaurants. The government believes that by moving these elderly taxpayers to specialized communities, they will grow employment opportunities.
Due to the rapid depopulation Japan has been facing, 8.2 million homes sit empty. This means that the creation of CCRCs could have minimal economic burdens, as the buildings only need to be renovated.
In their early stages, it is still hard to tell if communities such as these will be good investments for the Japanese economy. If the government winds up spending more on the creation of the communities than they make back in taxes and employment opportunities, it may be another sign of the growing dependency crisis.
Naturally, poverty and mortality are linked. According to studies by the Oxford Journals, when the embargo on Cuba was tightened in 1992, people over 65 saw mortality rates increase by 15%. This is an enormous number, given that Cuba is expecting the oldest population in Latin America, with 26% of the population consisting of those over 60 by 2030.
In further studies by the National Statistics Office, it has been found that 71.2% of elderly Cubans rely on retirement benefits or pensions, and 44% feel as though they cannot afford to pay for food.
To combat this, President Castro and the Cuban Parliament have approved a Social Security law which will raise the minimum retirement age by five years, allowing older individuals to work for longer and continue to make a constant income.
Additionally, the benefits of informal sectors, such as agriculture, in rural areas of developing countries can greatly help the elderly population. These jobs essentially have no retirement ages, and are available as long as employees are capable and willing to work.
In such countries, the discussion largely centers around those who don’t participate in the labor force, and the potentially low productivity of those who do, since many developing countries don’t have institutionalized pension plans like the ones that have been proposed by the Cuban government.
As populations are getting older, fertility rates are declining, leaving countries with fewer groups of young people. Funds could then be moved from the education system to healthcare for the elderly. However, is it– it is important to weigh this issue: if youth are the future of the marketplace, is it a bad investment to allocate funds for an elderly population? This is a question that individuals of different generations will have to collaborate on to answer.
In Germany, as people near the retirement age of 65, recent trends have shown that they continue to work. Experts attribute this working phenomenon to a general increase in enjoyment and satisfaction at work, and the need to work longer to economically sustain themselves. Regardless of the cause, this trend of working longer has, to some, made Germany a model for maintaining an economically-productive older population.
However, many fear that by dropping the retirement age to 63, as the government is now proposing they do, the labor force will shrink and older people will be left without anything but insufficient pensions. In fact, many recent articles suggest that Germany’s aging population could be the hindrance that allows Britain’s economy to overcome Germany’s as the largest in Europe.
The potential solution, to many, lies in the 800,000 immigrants who will seek asylum in Germany this year, half of whom will be younger than 25. This influx of educated youth could potentially balance the economic burdens of an aging population.
Dealing with an increasingly older population is a complex issue. Given the above research, and viewing the problem from an economic lens, it becomes apparent that, while some measures to handle this dependency crisis have proven to be effective, some may cause more harm than good.
Thus, in terms of infrastructure, private housing projects may only serve the wealthier elderly community, but give back extraordinary tax dollars to the surrounding community. In terms of offsetting the monetary crisis, this is extremely effective in a way that public projects will not be.
In the workforce, in regions of varying development, raising the minimum retirement age allows older people to work for longer, and continue bringing in revenue for as long as they are capable. Specifically in less developed regions, agricultural careers allow for older people contin– to continue working as well.
However, I do not recommend moving any funds that have been previously allocated for the younger population to the growing group of elderly dependents. Specifically, moving money away from the education system would be a poor investment, as youth will propagate the global marketplace.
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