Home > Uncategorized > Contrary to what the NYT tells you, the problem in an aging society is distribution

Contrary to what the NYT tells you, the problem in an aging society is distribution

from Dean Baker

The New York Times had a major article reporting on how many people in South Korea, Hong Kong, and Japan are being forced to work well into their seventies because they lack sufficient income to retire. The piece presents this as a problem of aging societies, which will soon hit the United States and other rich countries with declining birth rates and limited immigration.

While the plight of the older workers discussed in the article is a real problem, the cause is not the aging of the population. The reason these people don’t have adequate income to retire is a political decision about the distribution of income.

If the issue was simply that too few people were working in these aging societies, we should expect to see slower per capita growth than in countries where aging is less of a problem. That is not the case. The figure below shows real per capita income in these three countries from 2014, along with projections to 2027, as well as France, which has maintained a relatively high birth rate.

Source: International Monetary Fund.

As can be seen, both Korea and Hong Kong have been seeing more rapid per capita GDP growth than France and are projected to continue to do so, with Japan’s growth rate virtually identical over this period. Korea is projected to maintain a 2.4 percent growth rate, while Hong Kong is projected to have a 1.4 percent annual growth rate. By comparison, France is projected to have a 0.94 percent growth rate, only slightly higher than Japan’s 0.9 percent rate.

The conventional story of a country facing problems due to aging would be that it stops seeing per capita income growth, and could even see declines, as the ratio of workers to total population falls. Two of the three countries highlighted are sustaining considerably more rapid per capita growth than a country that is less affected by an aging population. In the third case, the growth is essentially identical.

This means that the reason older people are unable to retire in these countries is not the aging of the population, but the political decision to not provide adequate support for the elderly population. In short, the problem is political, not demographics.

  1. January 10, 2023 at 6:04 pm

    It’s a shame that nobody is complaining of the opposite problem: the unsustainable population growth in the many countries that are already depleted of resources (including in wealthy and dangerously overcrowded ones like the UK), that is already driving the unrest that is forcing massed attempts at migration and causing even more unrest. This is going to result in the complete breakdown of human society over the whole world in the near future, if the UN does not try to get countries to make an emergency switch to sustainably optimum populations with degrowth until the balance is struck and nobody is forced to migrate.
    They won’t even try: of course.
    The media will not even mention the causes of migration: let alone make constructive suggestions of how to address them.
    :(

    • January 10, 2023 at 9:47 pm

      Usefully, the Overpopulation Project has chosen this day to furnish me with this up to date account of what prospects there might be of each country achieving sustainable population/economies. Some look to have better prospects than imagined, but that won’t help if they are plunged into war over desperate migration attempts from the other states. :/

      https://overpopulation-project.com/the-great-multiplier/#comment-11110

    • VERA MARTINS DA SILVA
      January 11, 2023 at 1:22 pm

      Ok…I agree…if you observe the increasing population in the African countries…you will see that immigration is the only solution for them…

  2. January 11, 2023 at 2:52 am

    Can a government provide the necessary support so that nobody has to work?

    How many years should one be expected to work when the average life expectancy is in the mid 80s?

    If I’m living in a country where the population is declining, how is such a generous system viable?

    Sure, you can say, find ways to stop the decline in population, but that problem has to be solved first.

    What am I missing?

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