old age dependency ratio

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The Precariat: The New Dangerous Class by Guy Standing

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8-hour work day, banking crisis, barriers to entry, basic income, Bertrand Russell: In Praise of Idleness, call centre, Cass Sunstein, centre right, collective bargaining, corporate governance, crony capitalism, deindustrialization, deskilling, fear of failure, full employment, hiring and firing, Honoré de Balzac, housing crisis, illegal immigration, immigration reform, income inequality, labour market flexibility, labour mobility, land reform, libertarian paternalism, low skilled workers, lump of labour, marginal employment, Mark Zuckerberg, mass immigration, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, old age dependency ratio, pensions crisis, placebo effect, post-industrial society, precariat, presumed consent, quantitative easing, remote working, rent-seeking, Richard Thaler, rising living standards, Ronald Coase, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, The Market for Lemons, The Nature of the Firm, The Spirit Level, Tobin tax, transaction costs, universal basic income, unpaid internship, winner-take-all economy, working poor, working-age population, young professional

According to the IMF, the cost of the financial shock will be dwarfed by the cost of the ‘ageing crisis’. Its calculation is based on current pension fund pressures, a continuation of the current pattern of labour force participation and a rising ‘old-age dependency’ ratio – the number aged 15–64 divided by the number aged 65 and over. In the European Union, this ratio will fall from four to two in 2040. So, whereas today the contributions of four workers are required to support one pensioner, that will fall to just two. The challenge is even greater, since not everybody aged 15–64 is in the labour force. Taking WHO ENTERS THE PRECARIAT? 81 that into account, the old-age dependency ratio is set to fall from just under 3 to just under 1.5. Roughly speaking, every three people in the labour force will be expected to support two people over the age of 65, if they were all in pensioned retirement.

(Maltby) 138 Canada 79, 114 capital funds 176–7 Capitalism and Freedom (Friedman) 156 care work 61, 86, 125–6 careers, leisure 129 cash transfers 177 see also conditional cash transfers (CCTs) CCTs (conditional cash transfer schemes) 140 Cerasa, Claudio 149 Channel 4, call centre programme (UK) 16 charities 53 children, care for 125 China 28 and contractualisation 37 criminalisation 88 deliberative democracy 181 education 73 immigrants to Italy 4–5 invasion of privacy 135 migrants 96, 106–9, 109–10 old agers 83 191 192 INDEX China 28 (Continued) Shenzhen 133, 137 and time 115 wages 43 youth 76 see also Chindia China Plus One 28 Chindia 26, 27–9, 83 see also China Chrysler Group LLC 43 circulants 90, 92 Citizens United vs Federal Election Commission (US) 152–3 civil rights 14, 94 class, social 6–8, 66–7 Coase, Ronald 29 Cohen, Daniel 57, 66, 69 collaborative bargaining 168 collective attention deficit syndrome 127 commodification of companies 29–31 of education 67–72 and globalisation 26 labour 161–2 of management 40 of politics 148–53 re- 41–2 conditional cash transfers (CCTs) 140 see also cash transfers conditionality 140, 175 and basic income 172–3 and workfare 143–5, 166–7 connectivity, and youth 127 contract status 35, 36, 37, 44, 51, 61 contractors, independent/ dependent 15–16 contractualisation 37 counselling for stress 126 Crawford, Matthew 70 credit 44 crime 5, 129–30 criminalisation 14, 145, 146 crystallised intelligence 85 cultural rights 14 de Tocqueville, Alexis 145 de-industrialisation 5, 37–8 debt, and youth 73–4 Delfanti, Alessandro 78 deliberative democracy 180–1, 182 denizens 14, 93–102, 105, 113, 117, 157–8 Denmark 150 dependent/independent contractors 15–16 deskilling 17, 33, 40, 124 developing countries 12, 27, 60, 65, 105–9 disabled people 86–7, 89, 170 discrimination age 84–5 disability 81 gender 60, 123 genetic profiling 136–7 and migrants 99, 101–2 disengagement, political 24 distance working 38, 53 dole (UK) 45 Duncan Smith, Iain 143 Durkeim, Emile 20 economic security 157, 171, 173–6 The Economist 17–18, 33, 52, 137 economy, shadow 56–7 education 10, 67–73, 135–6, 159–60 Ehrenreich, Barbara 21, 170–1 elites 7, 22, 24, 40, 50 criminality 152 and democracy 181 ethics 165 Italian 148 and the Tea Party (US) 151 empathy 22–3, 137 employment agencies 33 employment security 10b, 11, 17, 36, 51, 117 Endarkenment 70 Enlightenment 24, 70 enterprise benefits 11, 12 environmental issues 167 environmental refugees 93 Esping-Andersen, G. 41 ethics 23–4, 121–2, 165 ethnic minorities 86 EuroMayDay 1, 2, 3, 167 European Union (EU) 2, 39, 146, 147 and migrants 97, 103, 105 and pensions 80 see also individual countries export processing zones 105–6 Facebook 127, 134, 135 failed occupationality 21 INDEX family 27, 44, 60, 65, 126 fear, used for control 32 fictitious decommodification 41 financial capital 171, 176–7 financial sector jobs 39–40 financial shock 2008-9 see Great Recession Financial Times 44, 55, 121, 155 firing workers 31–2 Fishkin, James 180 Fletcher, Bill 170–1 flexibility 18 labour 23–4, 31–6, 53, 60, 61, 65 labour market 6, 120–1, 170 Ford Motor Company 42, 43 Foucault, Michel 88, 133 Foxconn 28–9, 43, 105, 137 see also Shenzhen France criminalisation 88 de-industrialisation 38 education 69 leisure 129 migrants 95, 97, 101–2, 114 neo-fascism 149 and old agers 85 pensions 79 shadow economy 56 Telecom 11 youth 65–6 fraternity 12, 22, 155 freedom 155, 167–70, 172 freelance see temporary employment freeter unions 9 Friedman, Milton 39, 156 functional flexibility 36–8, 52 furloughs 36, 50 gays 63–4 General Motors (GM) 42, 43, 54 genetic profiling 136 Germany 9 de-industrialisation 38 disengagement with jobs 24 migrants 91, 95, 100–1, 114 pensions 79 shadow economy 56 temporary employment 15, 35 wages 40 and women 62 youth and apprenticeships 72–3 193 Glen Beck’s Common Sense (Beck) 151 Global Transformation 26, 27–31, 91, 115 globalisation 5–7, 27–31, 116, 148 and commodification 26 and criminalisation 87–8 and temporary employment 34 Google Street View 134 Gorz, Andre 7 grants, leisure 180–2 Great Recession 4, 49–51, 63, 176 and education 71 and migrants 102 and old agers 82 and pensions 80 and youth 77–8 Greece 52, 56, 117, 181 grinners/groaners 59, 83–4 Habermas, Jürgen 179 Haidt, J. 23 Hamburg (Germany) 3 happiness 140–1, 162 Hardt, M. 130 Hayek, Friedrich 39 health 51, 70, 120, 126 Hitachi 84 Hobsbawm, Eric 3 hormones 136 hot desking 53 Howker, Ed 65 Human Rights Watch 106 Hungary 149 Hurst, Erik 128 Hyatt Hotels 32 IBM 38, 137 identity 9 digital 134–5 work-based 12, 15–16, 23, 158–9, 163 Ignatieff, Michael 88 illegal migrants 96–8 In Praise of Idleness (Russell) 141, 161 income security 10b, 30, 40, 44 independent/dependent contractors 15–16 India 50, 83, 112, 140 see also Chindia individuality 3, 19, 122 informal status 6–7, 57, 60, 96, 119 inshored/offshored labour 30, 36, 37 194 INDEX International Herald Tribune 21 internet 18, 127, 139, 180, 181 surveillance 134–5, 138 interns 16, 36, 75–6 invasion of privacy 133–5, 167 Ireland 52–3, 77 isolation of workers 38 Italy education 69 neo-fascism 148–9 pensions 79 Prato 4–5 and the public sector 52, 53 shadow economy 56 and temporary employment 34 youth 64 Japan 2, 30 and Chinese migrants 110 commodification of companies 30 and migrants 102, 103 multiple job holding 119–20 neo-fascism 152 pensions 80 salariat 17 subsidies 84 and temporary employment 15, 32–3, 34–5, 41 and youth 66, 74, 76, 77 job security 10b, 11, 36–8 Kellaway, Lucy 83–4 Keynes, John Maynard 161 Kierkegaard, Søren 155 Klein, Naomi 148 knowledge 32, 117, 124–5, 171 labour 13, 115, 161–2 labour brokers 33–4, 49, 110, 111, 167, 168 labour flexibility 23–4, 31–45 labour intensification 119–20 labour market flexibility 6 labour security 10–11, 10b, 31 Laos 112 lay-offs see furloughs Lee Changshik 21 legal knowledge 124–5 legal processing 50 Legal Services Act of 2007 (UK) (Tesco Law) 40 leisure 13, 128–30 see also play lesbians 63–4 Liberal Republic, The 181 Lloyds Banking Group 50–1 localism 181–2 long-term migrants 100–2 loyalty 53, 58, 74–5 McDonald’s 33 McNealy, Scott 69 Malik, Shiv 65 Maltby, Lewis 138 Manafort, Paul 152 management, commodification of 40 Mandelson, Peter, Baron 68 Maroni, Roberto 97 marriage 64–5, 92 Martin, Paul 141 Marx, Karl 161 masculinity, role models for youth 63–5 Massachusetts Institute of Technology 68–9 Mayhew, Les 81 Mead, Lawrence 143 mergers, triangular 30 Mexico 91 Middle East 109 migrants 2, 13–14, 25, 90–3, 145–6 and basic income 172 and conditionality 144 denizens 93–102, 157–8 government organised 109–13 internal 105–9 and queuing systems 103–5 and recession 102–3 Mill, John Stuart 160 Morris, William 160, 161 Morrison, Catriona 127 multinational corporations 28, 92 multitasking 19, 126–7 National Broadband Plan 134 near-sourcing/shoring 36 Negri, A. 130 neo-fascism 25, 147–53, 159, 175, 183 Netherlands 39, 79, 114, 149–50 New Thought Movement 21 New York Times 69, 119 News from Nowhere (Morris) 161 Niemöller, Martin 182 INDEX non-refoulement 93 Nudge (Sunstein/Thaler) 138–9 nudging 138–40, 155–6, 165, 167, 172, 178, 182 numerical flexibility 31–6 Obama, Barack 73, 138–9, 147, 148 Observer, The 20 occupations associations of 169–70 dismantling of 38–40 freedom in 162–4 obsolescence in 124 offshored/inshored labour 30, 36, 37 old agers 59, 79– 86, 89 old-age dependency ratio 80–1 Organisation for Economic Co-operation and Development (OECD) 27 origins of the precariat 1–5 outsourcing 29, 30, 33, 36, 37, 49 Paine, Thomas 173 panopticon society 132–40, 142–3 Parent Motivators (UK) 139–40 part-time employment 15, 35–6, 51, 61, 82 Pasona 33 paternalism 17, 29, 137, 153, 178, 182 nudging 138–40, 155–6, 165, 167, 172, 178, 182 pensions 42, 51, 52, 76–7, 79–81, 84–6 PepsiCo 137 personal deportment skills 123 Philippines 109 Phoenix, University of 71 Pigou, Arthur 117, 125 play 13, 115, 117, 128, 141 pleasure 141 Polanyi, K. 163, 169 political engagement/disengagement 24, 147 Portugal 52, 56 positive thinking 21, 86 Prato (Italy) 4–5 precariat (definition) 6, 7–13 precariato 9 precariatisation 16–18 precarity traps 48–9, 73–5, 114, 129, 144, 178 pride 22 prisoners 112, 146 privacy, invasion of 133–5, 167 private benefits 11 productivity, and old age 85 proficians 7–8, 15, 164 proletariat 7 protectionism 27, 54 public sector 51–4 qualifications 95 queuing systems 103–5 racism 97–8, 101, 114, 149 Randstad 49 re-commodification 41–2 recession see Great Recession refugees 92, 93, 96 regulation 23, 26, 39–40, 84, 171 Reimagining Socialism (Ehrenreich/ Fletcher) 170–1 remote working 38, 53 rentier economies 27, 176 representation security 10b, 31 retirement 42, 80–3 rights 14, 94, 145, 163, 164–5, 169 see also denizens risk management 178 Robin Hood gang 3 role models for youth 63–5 Roma 97, 149 Rossington, John 100 Rothman, David 88 Russell, Bertrand 141, 161 Russell, Lucie 64 Russia 88, 115 salariat 7, 8, 14, 17, 32 Santelli, Rick 150 Sarkozy, Nicolas 69, 97, 149 Sarrazin, Thilo 101 Schachar, Ayelet 177 Schneider, Friedrich 56 Schwarzenegger, Arnold 71 seasonal migrants 98–100 security, economic 157, 171, 173–6 self-employment 15–16, 66, 82 self-esteem 21 self-exploitation 20, 122–3 self-production 11 self-regulation 23, 39 self-service 125 services 37–8, 63 195 196 INDEX Sex, Drugs and Chocolate: The Science of Pleasure (Martin) 141 sex services 63 sexism, reverse 123 shadow economy 56–7, 91 Shenzhen (China) 133, 137 see also Foxconn Shop Class as Soulcraft (Crawford) 70 short-time compensation schemes 55–6 side-jobs 119–20 skill reproduction security 10b skills 157, 176 development of 30, 31, 40 personal deportment 123 tertiary 121–4 Skirbekk, Vegard 85 Smarsh 138 Smile or Die (Ehrenreich) 21 Smith, Adam 71 snowball theory 78 social class 6–8, 66–7 social factory 38, 118, 132 social income 11–12, 40–5, 51, 66 social insurance 22, 104 social memory 12, 23, 129 social mobility 23, 57–8, 175 social networking sites 137 see also Facebook social rights 14 social worth 21 sousveillance 134, 135 South Africa, and migrants 91, 98 South Korea 15, 55, 61, 75 space, public 171, 179–80 Spain BBVA 50 migrants 94 and migrants 102 pensions 79 and the public sector 53 shadow economy 55–6 temporary employment 35 Speenhamland system 55, 143 staffing agencies 33–4, 49, 110, 111, 167, 168 state benefits 11, 12 status 8, 21, 32–3, 94 status discord 10 status frustration 10, 21, 63, 67, 77, 78, 79, 89, 114, 123, 160 stress 19, 126, 141, 141–3 subsidies 44, 54–6, 83–6, 176 suicide, work-related 11, 29, 58, 105 Summers, Larry 148 Sun Microsystems 69 Sunstein, Cass 138–9 surveillance 132–6, 153, 167 see also sousveillance Suzuki, Kensuke 152 Sweden 68, 110–11, 135, 149 symbols 3 Taking of Rome, The (Cerasa) 149 taxes 26 and citizenship 177 France 85 and subsidies 54–5 Tobin 177 United States (US) 180–1 Tea Party movement 150–1 technology and the brain 18 internet 180, 181 surveillance 132–6 teleworking 38 temporary agencies 33–4, 49, 110, 111, 167, 168 temporary employment 14–15, 49 associations for 170 Japan 9 and numerical flexibility 32–6 and old agers 82 and the public sector 51 and youth 65 tertiarisation 37–8 tertiary skill 121–4 tertiary time 116, 119 tertiary workplace 116 Tesco Law (UK) 40 Thailand, migrants 106 Thaler, Richard 138–9 therapy state 141–3, 153 Thompson, E.P. 115 time 115–16, 163, 171, 178 labour intensification 119–20 tertiary 116, 119 use of 38 work-for-labour 120–1 titles of jobs 17–18 Tobin taxes 177 Tomkins, Richard 70 towns, company 137 INDEX toy-factory incident 108–9 trade unions 1, 2, 5, 10b, 26, 31, 168 and migration 91 public sector 51 and youth 77–8 see also yellow unions training 121–4 triangular mergers 30 triangulation 34 Trumka, Richard 78 trust relationships 8–9, 22 Twitter 127 Ukraine 152 undocumented migrants 96–8 unemployment 145 benefits 45–8, 99, 104 insurance for 175 voluntary 122 youth after recession 77 uniforms, to distinguish employment status 32–3 unions freeter 9 yellow 33 see also trade United Kingdom (UK) 102–3 benefit system 173 Channel 4 call centre programme 16 company loyalty 74–5 conditionality 143–5, 166–7 criminalisation 88 de-industrialisation 38 disabled people 170 and education 67, 70, 71 financial shock (2008-9) 49–51, 71 labour intensification 119 Legal Services Act (2007) (Tesco Law) 40 leisure 129 migrants 91, 95, 99, 103–5, 114, 146 neo-fascism 150 paternalism 139–40 pensions 43, 80 and the public sector 53 public spaces 179 and regulation of occupational bodies 39 shadow economy 56 and social mobility 56–8 and subsidies 55 197 temporary employment 15, 34, 35 as a therapy state 142 women 61–2, 162 workplace discipline 138 youth 64, 76 United States (US) care for children 125 criminalisation 88 education 69, 70–1, 73, 135–6 ethnic minorities 86 financial shock (2008-9) 49–50 migrants 90–1, 93, 94, 97, 103, 114 neo-fascism 150–1, 152–3 old agers 82–3, 85 pensions 42, 52, 80 public sector 52 regulation of occupational bodies 39 social mobility in 57–8 subsidies 55, 56 taxes 180–1 temporary employment 34, 35 volunteer work 163 wages and benefits 42 women 62, 63 youth 75, 77 universalism 155, 157, 162, 180 University of the People 69 University of Phoenix 71 unpaid furloughs 36 unpaid leave 50 uptitling 17–18 utilitarianism 88, 132, 141, 154 value of support 11 Vietnam 28, 111–12 voluntary unemployment 122 volunteer work 86, 163–4 voting 146, 147, 181 Wacquant, L. 132 wages 8, 11 and benefits 41–2 family 60 flexibility 40–5, 66 individualised 60 and migrants 103 and temporary workers 32, 33 Vietnam 28 see also basic income Waiting for Superman (documentary) 69 Wall Street Journal 35, 163 198 INDEX Walmart 33, 107 Wandering Tribe 73 Weber, Max 7 welfare claimants 245 welfare systems 44 Wen Jiabao 105 Whitehead, Alfred North 160 Williams, Rob 62 wiretapping 135 women 60–5 and care work 125–6 CCTs (conditional cash transfer schemes) 140 labour commodification 161 and migration 92 multiple jobholding 119–20 reverse sexism 123 work 115, 117, 160–1 and identity 158–9 and labour 13 right to 145, 163, 164–5 security 10b work-for-labour 120–1, 178 work-for-reproduction 124–7 work–life balance 118 worker cooperatives 168–70 workfare 143–5, 166–7 working class 7, 8 workplace 116, 122, 130, 131 discipline 136–8 tertiary 116 Yanukovich, Victor 152 yellow unions 33 youth 59, 65–7, 89, 156 commodification of education 67–72 connectivity 127 and criminality 129–30 generational tension 76–7 and old agers 85 precarity traps 73–5 prospects for the future 78–9 and role models 63–5 streaming education 72–3 zero-hour contracts 36


pages: 482 words: 117,962

Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

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Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, creative destruction, demographic transition, Deng Xiaoping, endogenous growth, failed state, Fall of the Berlin Wall, Gini coefficient, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, Lao Tzu, life extension, low skilled workers, low-wage service sector, Malacca Straits, mass immigration, microcredit, Network effects, new economy, New Urbanism, old age dependency ratio, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, selection bias, Silicon Valley, Silicon Valley startup, Skype, spice trade, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, women in the workforce, working-age population

Many developing countries will echo these demographic trends. The number of elderly (60+) exceeded the number of children (0-14) in Europe around the turn of the century, and East Asia is expected to experience a similar transition before 2050. China is forecasted to see a 250 percent increase in its old-age dependency ratios between 2005 and 2050.92 Population aging and falling fertility in rapidly growing countries like China could lay the foundation for a global competition for scarce labor. TABLE 7.3 TOTAL IMMIGRATION NECESSARY TO MAINTAIN CONSTANT 2000 OLD-AGE DEPENDENCY RATIOS INTO 2050. Source: United Nations. 2000. Replacement Migration: Is It a Solution to Declining and Aging Populations? New York: United Nations. Absolute changes in labor demand will depend on the extent to which new technologies substitute for workers, but low-skilled work in the service sector and high-skilled work in knowledge-based sectors will resist such change.

Sub-Saharan African international medical graduates in the U.S. and Canada Table 6.4. Indicators of downward assimilation among second-generation young adults in the U.S Table 7.1. Estimates of wage ratios for migrant workers in the U.S. (comparing home wages with U.S. wages) Table 7.2. Largest cities in the world by 2025, population estimates (millions) Table 7.3. Total immigration necessary to maintain constant 2000 old-age dependency ratios into 2050 Acknowledgments This book has been written during our time at the James Martin 21st Century School at the University of Oxford. The School has provided an extraordinary, rich intellectual home, and engagement with our colleagues from across the University has provided a wonderfully vibrant environment in which to think. We have been most fortunate to be able to draw on the Oxford Martin School's International Migration Institute and its successive directors, Professors Stephen Castles and Robin Cohen, who have been tremendously generous intellectually and in offering up their precious time to comment on the entire manuscript.


pages: 344 words: 94,332

The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott

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3D printing, Airbnb, assortative mating, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, creative destruction, crowdsourcing, delayed gratification, diversification, Downton Abbey, Erik Brynjolfsson, falling living standards, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, gender pay gap, gig economy, Google Glasses, indoor plumbing, information retrieval, intangible asset, Isaac Newton, job satisfaction, low skilled workers, Lyft, Network effects, New Economic Geography, old age dependency ratio, pattern recognition, pension reform, Peter Thiel, Ray Kurzweil, Richard Florida, Richard Thaler, Second Machine Age, sharing economy, side project, Silicon Valley, smart cities, Stephen Hawking, Steve Jobs, The Future of Employment, women in the workforce, young professional

In countries such as Japan, which has long life expectancy and where the birth rate has fallen very dramatically, the problem is already acute. In Figure 2.2 we show the extent of the problem among the richer nations. The old age dependency ratio (the number of people of retirement age as a percentage of those of employment age) is set to at least double in many countries. Japan is particularly badly affected. Back in 1960, Japan had ten workers for every pensioner and the dependency ratio was 10 per cent. Under a Pay As You Go pension scheme this meant that ten workers effectively split the cost of one pension between them. In 2050 the projection is that the dependency ratio will reach 70 per cent, which means seven pensioners for every ten workers. Figure 2.2 Old age dependency ratio Source: http://www.oecd.org/edu/ceri/SpotlightAgeing.pdf As a result of these trends, it is clear that Pay As You Go schemes in their current form are no longer sustainable.

When the Money Runs Out: The End of Western Affluence by Stephen D. King

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Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, mass immigration, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

Its financial system can hardly be described as rudimentary, its companies are not facing huge debts and its households, if they wanted to, could 135 4099.indd 135 29/03/13 2:23 PM When the Money Runs Out presumably spend freely. Like Japan, however, Germany’s population is rapidly ageing – and shrinking. In 2010, it had a population of 82 million. The United Nations projects that, by 2075, Germany’s population will have dwindled to 70 million. Meanwhile, its old age dependency ratio – the ratio of those above standard retirement age to those of working age – is rising rapidly: according to the UN, it’s set to jump from 31 per cent in 2010 to a remarkable 55 per cent by 2035. That’s an awful lot of elderly people who will need looking after: and, before they retire, they’re all busily saving to make sure they don’t end up in impoverishment. Money put aside, however, is also money that, ultimately, will eventually be invested.

There is, however, a second schism that, ultimately, may be more problematic because, within our democratic framework, it is so difficult to deal with. We are on the verge of an intergenerational war. Economic stagnation makes it near enough impossible to satisfy the expectations of both the baby boomers – who hope to enjoy a happy, healthy and financially stress-­ free retirement – and younger generations – who, increasingly, are expected to pick up the bill. The debate on ageing is, by now, familiar territory. Old age dependency ratios – the ratio of the elderly relative to those of working age – are set to increase throughout the world, but nowhere more so than in the developed Western world. Based on dependency ratios alone, Germany, Japan and Italy appear to have bigger challenges ahead than the likes of France, Spain, the UK and the US. By 2030, roughly one-­third of the adult population in Germany, Japan and Italy will be elderly, even if not in retirement, while only around one-­quarter will be of similar maturity in the other four countries.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

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Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low skilled workers, market clearing, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

The rich nations really are running out of workers. FUNDED PENSIONS AND HEALTHCARE PROVISION ARE NOT THE ANSWER There is a rather tedious debate that suggests population ageing matters for some countries in the developed world but not for others. Those countries that depend on ‘pay-as-you-go’ pensions and healthcare provision are supposedly more vulnerable, as they rely on current taxpayers to fund the elderly. If the old-age dependency ratio is rapidly rising, the burden on current taxpayers – especially people of working age – threatens to become too painful. Higher tax rates might leave them disinclined to work or tempted to emigrate to countries with more favourable tax regimes, in which case a vicious downward spiral ensues. As the young begin to leave, the nightclubs close and the schools are converted to old people’s homes, encouraging a further youthful exodus.


pages: 327 words: 90,542

The Age of Stagnation by Satyajit Das

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9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, labour mobility, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, Plutocrats, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

The growth in population in poorer parts of South Asia and Africa will not generate a commensurate rise in economic growth because those countries will require support from richer donor nations for the essentials of survival. The world will also be older in the future. By 2035, more than 1.1 billion people, 13 percent of the total population, will be above sixty-five years of age, a doubling of this age group from current levels. The ratio of old people to those of working age (old-age dependency ratio) will grow. By 2035, there will be one person aged over sixty-five for every 3.85 workers aged 25–64, down from 6.25 in 2010. In developed countries the proportion of older people will be higher still. The dependency ratio (per person over sixty-five) in Japan, Germany, and the US will be 1.45, 1.52, and 2.27 respectively, an increase of 50–100 percent. Emerging countries will see the rate double to 4.55 by 2035.


pages: 354 words: 92,470

Grave New World: The End of Globalization, the Return of History by Stephen D. King

9 dash line, Admiral Zheng, air freight, Albert Einstein, Asian financial crisis, bank run, banking crisis, barriers to entry, Berlin Wall, Bernie Sanders, bilateral investment treaty, bitcoin, blockchain, Bonfire of the Vanities, borderless world, Bretton Woods, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, collateralized debt obligation, colonial rule, corporate governance, credit crunch, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, debt deflation, deindustrialization, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Snowden, eurozone crisis, facts on the ground, failed state, Fall of the Berlin Wall, falling living standards, floating exchange rates, Francis Fukuyama: the end of history, full employment, George Akerlof, global supply chain, global value chain, hydraulic fracturing, Hyman Minsky, imperial preference, income inequality, income per capita, incomplete markets, inflation targeting, information asymmetry, Internet of things, invisible hand, joint-stock company, Long Term Capital Management, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, moral hazard, Nixon shock, offshore financial centre, oil shock, old age dependency ratio, paradox of thrift, Peace of Westphalia, Plutocrats, plutocrats, price stability, profit maximization, quantitative easing, race to the bottom, rent-seeking, reserve currency, reshoring, rising living standards, Ronald Reagan, Scramble for Africa, Second Machine Age, Skype, South China Sea, special drawing rights, technology bubble, The Great Moderation, The Market for Lemons, the market place, trade liberalization, trade route, Washington Consensus, WikiLeaks, Yom Kippur War, zero-sum game

By 2015, its population had risen to 60 million. Its share of the global total, however, had fallen dramatically, down to just 0.8 per cent. Again using the UN’s projections, Italy’s population may hold steady through to 2050, but could drop to around 50 million by 2100, a mere 0.4 per cent of the global total. Italy’s story goes beyond mere shrinkage: its population is also ageing. Whereas Nigeria’s old-age dependency ratio will remain very low for much of the twenty-first century (thanks to a rapidly swelling population of working age), Italy’s will be heading a lot higher. In 2015, there were already 35 Italians above the age of 65 for every 100 Italians of working age.19 By 2050, there may be close to 70 Italians in their dotage for every 100 of working age. Put another way, as Italy progresses through the twenty-first century, there will be a growing shortage of Italians engaged in productive activities.


pages: 421 words: 125,417

Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

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agricultural Revolution, air freight, back-to-the-land, British Empire, business process, carbon footprint, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, Edward Glaeser, energy security, failed state, Gini coefficient, Haber-Bosch Process, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, labour mobility, low skilled workers, mass immigration, microcredit, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population

It might not be all bad: an estate and vineyard for all. But it’s also very unlikely to happen in that way. The most widespread concern is that the social security systems of the rich world will go bust as more retirees live longer and have fewer and fewer workers to support them. There is some truth to the message. The ratio of those older than sixty-five to those aged fifteen to sixty-five, called the old-age dependency ratio, will indeed take a big surge in the high-income world, as shown in Figure 8.9. The ratio basically doubles from around 23 percent to around 46 percent, while the child dependency ratio (children under fifteen relative to the fifteen-to-sixty-five cohort) declines slightly. Figure 8.9: Old-Age Dependency and Child Dependency Ratios in the High-Income World from 2000 to 2050 Source: Data from UN Population Division (2007) It is true that these changes will impose stresses on pension systems, but it is simply not true that the costs are likely to be large.


pages: 456 words: 123,534

The Dawn of Innovation: The First American Industrial Revolution by Charles R. Morris

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air freight, British Empire, business process, California gold rush, clean water, colonial exploitation, computer age, Dava Sobel, en.wikipedia.org, glass ceiling, hiring and firing, if you build it, they will come, interchangeable parts, Isaac Newton, Jacquard loom, Jacquard loom, James Hargreaves, James Watt: steam engine, John Harrison: Longitude, joint-stock company, lone genius, manufacturing employment, new economy, New Urbanism, old age dependency ratio, On the Economy of Machinery and Manufactures, purchasing power parity, QWERTY keyboard, refrigerator car, Robert Gordon, spinning jenny, Stephen Hawking, The Wealth of Nations by Adam Smith, trade route, transcontinental railway, traveling salesman

The Chinese will also have learned from watching how the Japanese and Germans deal with their elder booms. The Japanese in particular are seeking technological alternatives to intensive hands-on caretaking of the frail elderly. And if technology disappoints, all richer countries with large populations of dependent elderly will one way or the other increase their immigration rates. CHART 9.2 Old-Age Dependency Ratios, Selected Countries: 2010 and FC2050 The coming shift in the Chinese age structure, then, is likely to be a serious problem only if the country’s economic progress is arrested to the extent that it fails to complete its transition to a wealthy country with a well-established, middle-income, working class. Unfortunately, China appears to be entering a dangerous stage of development fraught with risks to its continued economic success.