{"id":1462,"date":"2016-10-19T07:50:00","date_gmt":"2016-10-19T11:50:00","guid":{"rendered":"http:\/\/www.silvercentury.org\/2017\/09\/think-old-people-will-tank-the-economy-thats-just-plain-wrong\/"},"modified":"2018-03-31T16:22:24","modified_gmt":"2018-03-31T20:22:24","slug":"think-old-people-will-tank-the-economy-thats-just-plain-wrong","status":"publish","type":"post","link":"http:\/\/78.142.243.82\/~silvercentury\/2016\/10\/think-old-people-will-tank-the-economy-thats-just-plain-wrong\/","title":{"rendered":"Think Old People Will Tank the Economy? That\u2019s Just Plain Wrong"},"content":{"rendered":"

Many economists agree that, as the number of boomers leaving the workforce swells, younger workers will shoulder ever-greater burdens. Social Security will be bankrupted by all those lazy old people! Medicare exhausted! These dire predictions of economic turmoil are biased, outdated and just plain wrong, and it was great to see an article in the New York Times<\/em>, \u201cDisproving Beliefs About the Economy and Aging<\/a>,\u201d take aim at them.<\/p>\n

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Much of the hand-wringing centers on the loaded term \u201cold age dependency ratio,\u201d which compares the number of people ages 15 to 64 (workers) with people 65 and older (dependents). In recent years, many scholars have criticized this dependency ratio because of its crudeness as a measure and because of its blatant anti-olders ideology. The \u201cold age\u201d modifier starkly separates older Americans from the general population, labeling them economic deadweight the day they hit 65. (The age at the other end of the scale reflects the ratio\u2019s agrarian origins, when young people on farms began their work lives at 15.)<\/p>\n

\u201c\u2026 [the] premise\u2014that the growth in the ratio indicates how greatly baby boomers will burden the rest of society\u2014is shaping some of the most consequential debates in the United States today\u2026\u201d writes Yale Law School professor Lincoln Caplan in the American Scholar<\/em> in a superb article that lays out the public policy implications<\/a>.<\/p>\n

The reality is far more nuanced, to say the least. Americans draw heavily on their own resources in retirement, and many never become wholly dependent on government support. Many people require benefits well before they turn 65, but a growing proportion remain employed long after it, both by choice and by necessity.<\/p>\n

The world is changing. The concept of fixed retirement at a certain age is nearing obsolescence. Far fewer jobs are physically taxing. Healthier and better educated than earlier generations, boomers are staying in the job market longer and expanding the definition of \u201cworking age\u201d in the process, a welcome development. That was true before the economy tanked, at which point four out of five boomers had already declared their intention to keep working and earning in retirement\u2014if it can still be called retirement.<\/p>\n

So it\u2019s great news that the World Bank has developed a long-overdue alternative formula, called the adult dependency ratio, which takes these trends into account. Instead of comparing the ratio of older to younger workers, it compares the ratio of inactive adults to adults who remain economically productive. Over time, this ratio stays more or less constant until it eventually declines during the 2030s, and it depicts a far more reassuring economic forecast.<\/p>\n

This more accurate prediction is enormously important, because it counters the reactionary narrative that a putative \u201cgray tsunami\u201d<\/a> is to blame for what ails the US economy. That alarmism is used to justify further efforts to shrink the welfare state and public assistance programs, even though exactly the opposite is called for if the country is to meet the needs of its older citizens in the years to come. An aging population does indeed pose significant challenges, but it\u2019s no tsunami, it\u2019s not the main cause of the problems facing our economy and it shouldn\u2019t be framed that way.<\/p>\n

Alarmist forecasts also fail to account for the significant, fast-growing and often overlooked \u201clongevity economy,” which in 2012, according to the AARP Journal,<\/em> accounted for 46 percent of US gross domestic product ($7.1 trillion). Americans over 50 control approximately 70 percent of the country\u2019s disposable income. This spending fuels the apparel, health care, education and entertainment industries, among others.<\/p>\n

These statistics capture only part of the economic contribution of older Americans, whose unpaid volunteer work in 2013 was valued at $67 billion<\/em>. And while \u201centrepreneur\u201d might conjure up an image of a kid in that proverbial garage, twice as many successful American entrepreneurs are over age 50 as in their early 20s. More resources have always<\/em> flowed from older generations to younger ones than the reverse.<\/p>\n

Another anti-olders myth is that older workers take jobs away from younger ones. (Economists call it the \u201clump of labor\u201d fallacy.) When jobs are scarce, this is true in the narrowest sense, but people seldom compete for the same jobs across generations. A 2012 Pew Institute study of employment rates over the last 40 years found that rates for younger and older workers are actually positively<\/em> correlated. In other words, as more olders stayed on the job, the employment rate and number of hours worked also improved for younger people. The challenge is to create enough jobs to prevent resentment and envy from affecting relations between generations\u2014to create a world, in the words of historian David Hackett Fischer, \u201cin which the deep eternal differences between age and youth are recognized and respected without being organized into a system of social inequality.\u201d<\/p>\n

That means correcting the inaccurate and unfair presumption that olders don\u2019t carry their weight financially, which the MacArthur Study of Successful Aging calls \u201cwrong and unjust in several ways: the measures of performances are wrong; our society doesn\u2019t count a great deal of productive activity; the playing field is not level; older men and women aren\u2019t given an equal chance for paying jobs; and millions of older people are ready, willing, and able to increase their productivity, paid and voluntary.\u201d<\/p>\n

In the 20th<\/sup> century, the American lifespan increased by an astonishing 30 years. Roles, policies and institutions have yet to catch up. \u201cSocial change takes time, even when it is visibly underway,\u201d as Caplan observes. \u201cBut,\u201d he continues, \u201cchange accelerates when outdated ways of thinking are put aside in favor of useful new ones.\u201d The experience, skills and drive of millions of healthy, well-educated older Americans\u2014their cumulative social capital\u2014represent a vast and unprecedented resource. We can\u2019t let ageism and inertia prevent us from tapping into it in millions of interesting ways.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Many economists agree that, as the number of boomers leaving the workforce swells, younger workers will shoulder ever-greater burdens. Social Security will be bankrupted by all those lazy old people! Medicare exhausted! These dire predictions of economic turmoil are biased,…<\/span><\/p>\n

Read more Think Old People Will Tank the Economy? That\u2019s Just Plain Wrong<\/span> ›<\/span><\/a><\/div>\n

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