Aging populations alter how business is done everywhere. The globalization of the economy is accelerating because the world is rapidly aging, and at the same time the pace of global aging is quickened by the speed and scope of globalization. These intertwined dynamics also bear on the international competition for wealth and power. The high costs of keeping our aging population healthy and out of poverty has caused the United States and other rich democracies to lose their economic and political footing. Countries on the rise amass wealth and geopolitical clout by refusing to bear those costs. Older countries lose work to younger countries.
How do globalization and an aging population affect the American workplace?
According to the Economic Policy Institute, 2.3 million American jobs were lost to China alone between 2001 and 2007. Keep in mind that these results predate the recent recession and the even more difficult times that have resulted for older workers. The ranks of the unemployed who are 55 and older grew 331 percent over the decade that ended last December. U.S. unemployment levels for workers over 50 are now at their all-time highs, nearly double what they were three years ago. AARP’s Public Policy Institute reports that from December 2007 to February 2010 the number of workers 55 and older who gave up looking for work rose more than fivefold, to 287,000 from 53,000. Far more people have retired early than anyone predicted. In 2009, there were 465,000 more applications for Social Security and disability benefits than there were the year before, as employers made it clear to older workers that they were not wanted. This increase was nearly 50 percent greater than what the Social Security Administration expected.
In the United States, the transformation of older workers into a giant contingent work force is just getting started. This year, as Baby Boomers begin to hit 65, the “elder share” of the U.S. population begins a sharp climb. From 2010 to 2030, the number of Americans between 25 and 64 will climb by 16 million, but two-thirds of the increase will consist of people 55 and 64.
According to the AARP Public Policy Institute, 21 percent of workers over 65 are part time, compared with 16 percent for the overall work force. Self-employment is also climbing among older workers, and Americans over 50 are the most active group of entrepreneurs, often out of necessity. This partly explains an apparent contradiction: at the same time that unemployment among older workers is at a peak, the percentage of older people with jobs is also near a high, because more people must work to make ends meet.
There are also sobering geopolitical consequences to consider. It now looks as if global power rests on how willing a country is to neglect its older citizens. Faults in the welfare states of the West are highlighted by the world debt crisis. Fiscal woes driven by age-related expenses plague every level of government in the United States. Here in the United States, for example, health care costs for workers who are between 50 and 65 are, on average, almost two times what they are for their peers in their 30s and 40s. When the median age of workers climbs in the United States, so does the cost of insurance for these employees and their employers.
Source: The New York Times Magazine, October 17, 2010
