There are more people aged 65 and over in the U.S. than under 5 for the first time ever. Here is what that could mean.
People are living longer and having fewer children in developed countries, presenting new challenges and opportunities around the globe. In fact, there will be more older adults than children in our country in less than two decades. The cause is largely twofold: the large contingent of baby boomers is graying while fertility rates have stagnated or headed downward. And the U.S. is not alone.
Why Are Populations Shrinking?
Generally, women in developed nations are having fewer babies. International migration and slightly higher fertility rates have allowed the U.S. to remain younger, but not for long. Immigration is slowing and Americans are having fewer babies. Add a longer life expectancy to the mix and you can see why the country is aging faster.
Another factor pushing the population to skew older is the massive generation of post-war children who are aging into their 60s and beyond. The baby boomers pumped up the number of children when they were young, swelled the workforce as they entered adulthood, and are having a corollary effect on retirees as 10,000 per day turn 65. By 2030, every boomer will have crossed this age-limit Rubicon and older Americans will make up 21 percent of the population, versus 15 percent today.
This has huge implications for both older adults and the aging industry. Social programs will be impacted as the 3.5 working adults for every person eligible for Social Security today dwindles to 2.5 working adults by 2060. Additionally, health care is bound to be affected along with the caregiving spectrum, from aging in place to assisted living and hospice. Supporting the elderly is more expensive than caring for children, and eldercare is a major worry.
Japan Provides a Model
As the oldest society on earth, Japan’s government has had to make radical changes to accommodate its singular population. In 2000, the country’s leaders introduced extremely generous long-term care insurance to supplement its national pension plan. There is also an emphasis on cutting-edge medical technologies with the hope of slashing future health care costs while energizing a new industry.
On the caregiving front, the country has been ahead of most in organizing a private transit network to bring patients to medical appointments and implementing electronic health records. One hospital issues ID cards with digital information containing the patient’s name, medical history, allergies and illnesses. Emergency responders or doctors can quickly scan these IDs.
Another way the country leads is with robotics. Paro the robotic seal is particularly useful to calm dementia patients, according to Takanori Shibata, chief senior research scientist at Tsukuba’s National Institute of Advanced Industrial Science and Technology.
The humanoid Twenty-One robot, developed at Tokyo’s Waseda University, is able to help older adults get out of bed, retrieve jars from the refrigerator and deliver trays of food. But with a $215,000 price tag, it’s not in wide use.
Worldwide, economists worry that an aging population will open the door to depressed productivity, lower labor-force participation and stagnant inflation. Indirect effects can include a reduction in home ownership. Investors worry whether the new global economy will be able to generate an adequate amount of productivity and growth to make up for the demographic trends. Still, more hopeful opinions persist.
There is “no negative relationship between population aging and slower growth of gross domestic product per capita,” according to Daron Acemoglu, a Massachusetts Institute of Technology economist. His research in 2017 found that rapidly aging countries have been some of the fastest growers in recent decades, likely due to a quicker adoption of technologies and automation to replace lost labor.
Government and private institutions will have to work in tandem for optimal results over the coming years. Health care will be forced to evolve, and businesses will need to look for opportunities to cater to the booming market of older adults. And perhaps instead of a chicken in every pot, the future will see a seal in every home as the world adapts to grayer heads.
Source: Society of Certified Senior Advisors Blog: Tuesday, January 21, 2020