The demographics of 2050
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A looming issue/crisis/opportunity (there’s probably a Chinese character for this) is the massive mismatch that’s developing between where the world’s wealth and the world’s workers are going to be located in another generation:
Today’s young countries aren’t the only ones at a critical juncture. The transformation of rich countries has only just begun. If these countries fail to prepare for a shrinking number of workers, they will face a gradual decline in well-being and economic power.
The number of working-age people in South Korea and Italy, two countries that will be among the world’s oldest, is projected to decrease by 13 million and 10 million by 2050, according to U.N. population projections. China is projected to have 200 million fewer residents of working age, a decrease higher than the entire population of most countries.
To cope, experts say, aging rich countries will need to rethink pensions, immigration policies and what life in old age looks like.
Change will not come easy. More than a million people have taken to the streets in France to protest raising the retirement age to 64 from 62, highlighting the difficult politics of adjusting. Immigration fears have fueled support for right-wing candidates across aging countries in the West and East Asia.
“Much of the challenges at the global level are questions of distribution,” Dr. Myrskylä said. “So some places have too many old people. Some places have too many young people. It would of course make enormous sense to open the borders much more. And at the same time we see that’s incredibly difficult with the increasing right-wing populist movements.”
The changes will be amplified in Asian countries, which are aging faster than other world regions, according to the World Bank. A change in age structure that took France more than 100 years and the United States more than 60 took many East and Southeast Asian countries just 20 years.
Not only are Asian countries aging much faster, but some are also becoming old before they become rich. While Japan, South Korea and Singapore have relatively high income levels, China reached its peak working-age population at 20 percent the income level that the United States had at the same point. Vietnam reached the same peak at 14 percent the same level.
Pension systems in lower-income countries are less equipped to handle aging populations than those in richer countries.
In most lower-income countries, workers are not protected by a robust pension system, Mr. O’Keefe said. They rarely contribute a portion of their wages toward retirement plans, as in many wealthy countries.
“That clearly is not a situation that’s going to be sustainable socially in 20 years’ time when you have much higher shares of aged population,” he said. “Countries will have to sort out what model of a pension system they need to provide some kind of adequacy of financial support in an old age.”
Lots of interesting graphs at the link, illustrating how in many rich countries there will be nearly as many old people as traditional working age adults by the middle of the century.
The situation in the US isn’t quite as dire, mainly because of undocumented immigration and the relatively high birth rates of recent immigrants, but it’s still going to be very challenging because of all this Cartesian dualism right wing populism.
Obviously vastly more liberal immigration policies throughout the world are a big part of the answer to all this. Just as obviously, the political structures of rich countries make such policies extremely difficult to enact.