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The myth of "disaster" from ageing populations is the fallacy that growth must be unending

In an editorial piece in
"The Australian" newspaper, Bernard Salt explained that over the next 50 years, the Australian tax base (the segment of population who contribute to tax) will be eroded, as more people retire and our low birth rate.

Mr Salt said all metropolitan plans developed in the previous five years had to be rethought: in the state of Victoria, Melbourne 2030 has been recast as Melbourne @ 5 Million; Adelaide in South Australia has a new 30-year plan; and southeast Queensland has a new regional plan. “Indeed, I would say that recruiting workers (and students who turn into workers) from overseas must remain one of this nation's growth industries over the next 20 years.”

(Global population growth 1950 to predicted in 2050)
Has Mr Salt taken into consideration the social, ecological, cultural impacts of this continuing, socially engineered, population growth?
It’s just pure extrapolation without understanding the exponential nature of growth.

Our population is estimated to reach 35.4 million in 40 years, a dramatic revision from the 28.5 million projected only two years ago. However, with our rate of growth, the “over” 35 million is an understatement! According to calculations by the Centre for Population and Urban Research that Bob Birrell heads, net immigration of 180,000 a year and a fertility rate of 2.0 would be required for the population to reach 35 million in 2051. However, our immigration rate is well over this rate, plus we have hidden numbers students applying for PR, and New Zealanders living here.

Figures from the Australian Bureau of Statistics reveal that the population grew by 2.06% in the year to March this year, the fastest growth in the that period since figures were started in the their current form back in 1981.

All in all more than 502,000 people arrived here under varying migration schemes, such as family reunions, business and work visas of varying types. This is a doubling rate of 35 years!

By contrast, Japan's population started falling three years ago and is projected to keep doing so at an accelerating rate, contracting by one-fourth to 95 million by the middle of this century.

To offset the loss of funds involved in a larger base of people exiting the workplace, and to pay for services needed for the older population Mr Salt believes that governments will look at expanding migration.

Data from the Australian Institute of Health and Welfare shows the proportion of Australian people aged 65 will almost double between 2006 and 2036, from 13 per cent to 25 per cent. For all the growth, the proportion of the aged will still be higher than it is now?

Immigration at present is running at the highest levels since the post-war immigration boom.

The most rapidly expanding elderly age group, however, is the over-85s. Their numbers will triple from 333,000 in 2006 to about 1.1 million in 2036, up from 1.6 per cent to 4.2 per cent of the total population. During the same period, the number of centenarians is projected to increase more than five-fold, from less than 5000 to more than 25,000.

The Federal Government has been increasingly concerned about ''longevity risk'' in the retirement income system - the risk that self-funded retirees may run out of money if they live longer than they expect.

Other reforms to tackle longevity risk are being considered by the Government's tax reform panel, headed by the Treasury Secretary, Ken Henry. To help prepare the economy for the changes, the Government announced in the budget that the pension age would rise from 65 to 67 between 2017 and 2023.

Australian National University demographer Peter McDonald said the recent increase in the birthrate in Australia, up from 1.79 to 1.93 in the past two years, was “encouraging”.
"The lower the birthrate, the more migrants you need," Professor McDonald said. "If we had birthrates like those in Germany or Italy we would need to look at greater numbers of migrants."

Adding more people will never keep our population young. Adding more people to “replace” or “compensate” for our dangerous ageing population is surely a way to blow-out our numbers!

We cannot just superimpose earlier conditions on today’s. Australia has changed since the 1950s and we have environmental, resource and climate change challenges now that didn’t exist before. Extrapolating the benefits of adding more people is dangerous under the stresses we are facing of today.

--------------------overseas----------------

Japan, known for its low-fat staple of fish and rice, will have the most centenarians in 2050 – 627,000, or nearly 1% of its total population, according to census estimates. Japan pays special respect to the elderly and has created a thriving industry in robotics – from dogs and nurses to feeding machines – to cater to its rapidly ageing population. Japan has one of the world's oldest populations, with many young people putting off starting a family because of the burden on their lifestyles and careers.

Italy, Greece, Monaco and Singapore, aided by their temperate climates, also will have sizable shares of centenarians, most notably among women.
Italy - But with the country’s plummeting birth rate and ageing population, many parts of the economy would find it hard to survive without foreign workers. Last year a government report on immigrant relations showed that 42% of Italians recognise that immigrants are essential to the economy

Populations in the Gulf are getting older and increasing in size, with a big bulge in the number of teen-agers who will be entering the work force within the next 10 years. These trends are making its harder and more costly for governments to provide high-quality healthcare and schooling. The Gulf has one of the world’s highest rates of obesity; 27 per cent of all men and 40 per cent of all women are clinically obese. The older people become, the fatter they get – though this seems to conflict with the ob-gen argument that we need to get fat to avoid starvation. On this view, an ageing population means a fatter population in the United States, China, Japan, and much of Europe.

In Indian context the older population has been rapidly increasing. It is said that while it took France 120 years for the population of the elderly to double, it took India just 25 years to achieve this phenomenon. India’s elderly population increased from 12 million in 1901 to 19 million in 1951 and 77 million in 2001. According to an estimate by 2021, India’s elderly population will cross 137 million. Presently India has the second largest aged population in the world. Nearly 90 per cent of the total workforce in India is employed in the informal sector. Thus, social security offered by pension schemes is available to only 10 per cent of the working population retiring from the organised sector.

----------solutions?------------

It is true that the only way our leaders are able to combat an ageing population - bar introducing state-sanctioned euthanasia for the over 85s - is to have a faster-growing population of young people. Australia has no comprehensive plan to deal with its growing population. Decisions on migration are made at one level of government - federal - in isolation from the states, which are responsible for actually housing, educating and caring for the new inhabitants. This solution that has been in the news of late; an increase in immigration.

Australia is perceived to have one of the largest countries in the world, yet we have one of the smallest populations. In this plan, the government intends to use this excess space, to open the doors to a controlled form of immigration, in which only younger people are allowed. They hope this may counter the effects of an ageing population, through stimulating the economy with greater activity and productivity.

The employment challenge of ageing populations cannot be solved by perpetual population growth, because perpetual population growth is not possible in a finite world.

Today's young people will always grow into the elderly of the future, and therefore today's workforce into the dependants of the future.

Definitions of economic dependency focus too narrowly on the proportion of older and elderly people in a population, while the contribution of dependent children and other economically inactive groups has been ignored.

Impossibly large numbers of additional births or settling migrants would be needed to maintain the dependency ratios enjoyed by growing populations.

Population Trust POPULATION POLICY: EUROPE

• Welcome the projected stabilisation of EU population in 2025 and gradual decrease over the period 2025-2050. The world has no choice but to welcome ageing populations as the better educated nations reduce their natural population. Climate change implications should mean that less people means less greenhouse gas emissions and thus easier to scale up renewable energy sources.

Improve the health, education and training of the working-age population. Improved diets would avoid Western diseases and obesity, and thus the costs to the health care system.

• Improve the education and training of young people - the future workforce. Our massive HECS fees and having our universities and tertiary education system globalised should stop. Concentrate training on our own youth, not those from overseas.

• Create more flexible jobs to enable groups such as working mothers, the disabled and older people to join the workforce. Retirement should be more flexible, a phasing out system, not just a cut-off point. A chronological age is not the best indicator of readiness for retirement.

Raise state and corporate pension ages in line with life expectancy and personal health and well-being levels.

• Encourage and enable people to save more for retirement.

One-quarter of Japanese men are still working after they have turned 75. "The biggest thing that Japan has that we don't have is a much stronger participation in the workforce," Professor McCallum, Victoria University's deputy vice-chancellor, said. In Japan, older men step down from senior positions and take lower-level jobs to make way for younger generations.

Special attention should also be devoted to the development of annuity markets and other instruments which help the retirees in the pay-out phase.

An important part of the myth of disaster from ageing populations is the fallacy that growth must be unending. This has been promoted by pressure groups that benefit from population growth through escalating values of real estate, mass markets, demands for building, and, in supporting immigration, importing cheap docile labour for unpleasant jobs, and already-skilled personnel that have not cost the reception country any expense in education and training.

However, there is less recognition that growth has downsides. Past civilisations have grown beyond the resources available to them, and collapsed.

There is no easy solution to the economic impacts of an ageing population. However, we need to stabilize our numbers, not replace older people through adding more people! We all must share the pain until we reduce our numbers to a sustainable level.

The alternative, an overloaded Australia and the implications of the erosion of our ecosystems, destruction of our wildlife habitats, loss of arable land, the threats of water and food shortages, and climate change, all need to be taken into consideration.

Biological systems can grow until they consume their natural resources, and then find equilibrium with other species. Nothing can grow forever on finite ecosystems, and economists should take a lesson from biological communities, not just extrapolate the benefits of a growing population and ignore the many facets and implications of infinite growth.

Comments

Tony Boys's picture

Hi Vivienne,

I thoroughly agree with the main drift of your article. What you say about Japan is also largely true, though you paint a slightly more utopian picture from the one I see here at ground zero. One thing is that we are looking forward to seeing what the new government's position on population is going to be. The LDP for a long time has pushed the policy that population decline is a BAD THING and forced the Ministry of Health, Labour and Welfare to implement population growth policies such as subsidies for larger families (though much of the population sees this as a rather feeble King Canute trying to reverse the 'tide' of lower birthrates). Given the prognosis on global food and energy problems it is absolutely crucial that the Japanese grasp firmly the notion that population decline is a GOOD THING. As it is practically everywhere now.

Japanese workers, however, are still the world's best when it comes to skill and dedication to excellence. In automobiles, electronic cameras, camcorders and several other export industries, Toyota , Honda, Sony, Mitsubishi, Hitachi , Mitsui, Canon and Nikon are highly regarded, highly competitive, brand names. Australia's production has diminished, and we depend more on exports and overseas skills. By 2055 in Japan, only 1.2 workers will support each senior. Yet the Japanese continue to reject immigration. Maybe the future will show that Japan's refusal to invite immigrants will be beneficial with regards to conservation and climate change costs. Once the baby-boomers pass away, there will be an opportunity for birth and deaths to be more in balance. At the same time, older people deserve better than to be regarded as liabilities and burdens! Our Economy should be our Slave, not our Master.

Incredibly, the Murdoch Newsmedia considers population decline in clearly over-populated Japan as a threat, rather than a potential salvation. Here's Greg Sheridan writing in "Survival rests on social revolution" in the Australian of 3 Sep 09:

The central crisis of Japan today is not economic, much less military. It is demographic. Put simply, the Japanese are disappearing. The demographic projections are naturally a little imprecise, but the consensus figure is that Japan's population will decline by one-quarter by 2050, to just 95 million people. And something not far short of 50 per cent of those people will be aged 60 or older.

...

... At this stage the numerical population decline is small. But this is like a toboggan going down a ski slope. It starts off slow but gathers pace at an ever accelerating rate.

...

To reverse this decline, Japan needs to do three things, each of which would constitute a social revolution.

First, it needs to embrace immigration; second, adopt all policies possible to encourage the birth of children; third, redefine the place of women in Japanese society.

...

Second, Japan must start having children again. The birth dearth in Japan has many deep cultural causes, but it also has many superficial financial causes. Notwithstanding Japan's fiscal dire straits, Hatoyama is surely right to offer a generous baby bonus cum child allowance.

The third policy that Sheridan prescribes is "a fundamental change in the role and status of women in Japan" that would effectively allow them to participate in the workforce in greater numbers.

For years, Australians, who considered themselves politically progressive looked forward to the breaking down of barriers preventing the participation of women in the workforce.

But it has become a double edged sword.

Today, at least two incomes, rather than one, have become necessary for meet the basic living expenses, particularly housing.

On the one hand, many women have gained, through participation in the workforce the equality of status that seemed unachievable, when they were confined to the role of mother and housekeeper, but on the other they find themselves without as much time and energy to care for their children.

So, it is not altogether clear who actually gained from the same feminist revolution that Greg Sheridan is now prescribing for Japan.

Original subject was: "The aged are not disastrous." - JS

The tax base is not contributed to by more children. Nor is it contributed to by the non-aged who are a burden on welfare and justice.

Many of the aged contribute to the tax base.

Most of the aged contribute to society as volunteers and child-carers.

Solutions to the aged who need more medications and care include:

1. The increasingly healthy aged who still contribute, socially and intellectually, not just in material production. Modern methods of production mean that very few workers are really needed to keep the rest of us alive. Old people with super and investments are not even a tax burden.

(And look at the average age of our farmers today, and how may are over 70!) People at 70 are today mostly healthier than most people were at 60 even a few decades ago.

2. Humane solutions to the big problem that we all dread – living death as vegetables, undignified and cared for by uncaring strangers. Heroic and costly medical efforts to keep them alive (e.g. when pneumonia used to be called the old man’s friend, for a quick and relatively easy death) contrast with the lack of medical care across the world for people generally. There are surely ways to prevent voluntary euthanasia not being abused, and criteria for when as in King Lear

‘he hates him who would on the rack of this rough world stretch him out longer.’

At almost 79, I can write more on that angle.

3. The economics of who depends upon who. Childcare is more costly than aged care apart from that ‘Struldbrug’ cohort

4. Importing overseas workers to care for the aged is not kindly for the aged, who need their own culture. The reasons why overseas workers are needed when Australians will not take the jobs need addressing. My daughter and grandson have both worked ‘holiday jobs’ in aged care and their comments on conditions for the workers are relevant. It is hard work and should be paid accordingly and conditions and status need much improvement, for the sake of workers and patients both.

Mr Rudd said earlier this week that Australia needs to boost productivity to cope with an ageing population. An intergenerational report, expected out before Easter, is understood to show that the population will hit 36 million by the middle of the century. Our nation does not have to "hit" 36 million, and exponential arithmetic would tell us, that unless our unsustainable growth rate is stemmed, our population will be closer to 50 million by 2050!
Kevin Rudd warned that an "ageing population" would "drag down" our growth rate over the next 40 years. How disgusting that Kevin Rudd could consider ageing a threat! Older people may not add to the GDP but if they worked most of their lives they have contributed to the economy. Many retirees are self-supporting now. They often care for the elderly and children, and do volunteer work. Nothing grows forever, and people don't value only when they are "growing" family incomes. People are being denigrated to merely economic units in our government's economically-driven growth agenda.
If we hadn't had our post-war immigration levels, 40 plus years ago, we wouldn't have the ageing population we have now. Now Kevin Rudd is doing the same thing, an immigration boost that will mean even more older people in 40 years time. His off-setting of older people by importing young people and "students" will mean that our numbers will continue to blow-out!