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Red Flags: Why Xi's China Is in Jeopardy by George Magnus
3D printing, 9 dash line, Admiral Zheng, Asian financial crisis, autonomous vehicles, balance sheet recession, banking crisis, Bretton Woods, BRICs, British Empire, business process, capital controls, carbon footprint, Carmen Reinhart, cloud computing, colonial exploitation, corporate governance, crony capitalism, currency manipulation / currency intervention, currency peg, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, financial deregulation, financial innovation, financial repression, fixed income, floating exchange rates, full employment, Gini coefficient, global reserve currency, high net worth, hiring and firing, Hyman Minsky, income inequality, industrial robot, Internet of things, invention of movable type, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, labour market flexibility, labour mobility, land reform, Malacca Straits, means of production, megacity, money market fund, moral hazard, non-tariff barriers, Northern Rock, offshore financial centre, old age dependency ratio, open economy, peer-to-peer lending, pension reform, price mechanism, purchasing power parity, regulatory arbitrage, rent-seeking, reserve currency, rising living standards, risk tolerance, smart cities, South China Sea, sovereign wealth fund, special drawing rights, special economic zone, speech recognition, The Wealth of Nations by Adam Smith, total factor productivity, trade route, urban planning, Washington Consensus, women in the workforce, working-age population, zero-sum game
Those aged over sixty, numbering around 209 million in 2015 (just over 15 per cent of the population) will increase to 294 million by 2025 (21 per cent of the population), and 490 million (36.5 per cent) by 2050. By then, there will be nearly three times as many older citizens as children. The old-age dependency ratio, which is the number of over-65-year-olds as a proportion of the WAP, is predicted to rise from 13 per cent today, to over 20 per cent in 2025 and 47 per cent by 2050. Put another way, the 7.7 workers who support each older citizen today will be just 2.1 workers by 2050. China’s old-age dependency ratio will still be less than that of Japan and South Korea by then but significantly higher than the US (37 per cent), let alone India (20 per cent). It is an intriguing question as to why China is ageing so rapidly, especially in relation to other emerging and developing nations.
In the next few years, successful economic rebalancing will have to entail a willingness to accept four important things: markedly slower economic growth; an active and sustained campaign to reduce leverage in the economy and the financial system; a focus on reducing income inequality and strengthening the social safety net; and the adoption of economic incentives and regulations to move the economy’s balance away from investment and towards consumption and new service-producing industries. Support for the consumer sector could be strengthened by creating new jobs in services and building up the social security and healthcare coverage safety nets. Such policies would most likely help to lower household savings, accelerating a change that will probably happen anyway over time as China ages. The working-age population is now in decline, and the old-age dependency ratio is predicted to double between 2017 and 2030. Social benefits should rise and be extended to all working people and their families. The growth in services should be actively encouraged, both in megacities such as Beijing or Shanghai, which are already well -served, but also and importantly in other cities, especially those inland, which are not.28 Modern service industries, which remain relatively closed, could be deregulated and opened up, for example in a wide range of communication, professional, business, entertainment and information services.
A booming WAP is unequivocally positive for the economy but only if people are productively employed, and fairly paid. Eventually, though, the older members of the WAP reach the retirement or pensionable age, and spearhead a substantial withdrawal of ageing workers from the labour force. Some may be able to leave the labour force gradually in a phased retirement, but others may have to leave on a cliff-edge basis, that is from Friday to Monday. The old-age dependency ratio rises. In most advanced countries, the fertility rate has receded below the ‘magic number’ of 2.07 children, which is the replacement rate at which the population size is stable. The WAP is growing only slowly, or is falling. Old-age dependency is going up. The demographic dividend is banked. With the passage of years, we will have progressively fewer working-age people to support each older citizen, and the adverse economic and financial consequences referred to earlier start to manifest themselves.
Fully Grown: Why a Stagnant Economy Is a Sign of Success by Dietrich Vollrath
"Robert Solow", active measures, additive manufacturing, American Legislative Exchange Council, barriers to entry, business cycle, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, creative destruction, Deng Xiaoping, endogenous growth, falling living standards, hiring and firing, income inequality, intangible asset, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, labor-force participation, light touch regulation, low skilled workers, manufacturing employment, old age dependency ratio, patent troll, Peter Thiel, profit maximization, rising living standards, Robert Gordon, Second Machine Age, secular stagnation, self-driving car, Silicon Valley, The Rise and Fall of American Growth, total factor productivity, women in the workforce, working-age population
The effect of the baby boom is visible around 1960, as the number of kids exploded to equal almost 80% of the working-age population. At the same time, the old-age dependency ratio, which is the number of people 65 and older as a percentage of the working-age population, was less than 20%. From 1960 to almost 2010, as fertility declined so did the youth dependency ratio. It is now around 45%, almost half its peak in 1960. And for much of that same period, the old-age dependency ratio also stayed constant at around 20%. This means that the ratio of workers to total population rose throughout the twentieth century and into the twenty-first. But as the figure shows, we then entered a period of profound change as the baby boom generation entered retirement. By 2030 the old-age dependency ratio will approach 40%, whereas the youth dependency ratio is not projected to fall much at all.
By 2030 the old-age dependency ratio will approach 40%, whereas the youth dependency ratio is not projected to fall much at all. This means that the proportion of workers to total population, which had already begun to drop because of the rise in the old-age dependency ratio in the early 2000s, will continue to fall. Figure 5.3. Dependency ratios over time Note: Data is from the Organisation for Economic Co-operation and Development population statistics database. Youth dependency is the ratio of people age 0–20 to the working-age population, 20–64. Old-age dependency is the ratio of those age 65 and older to the working-age population, 20–64. I attributed this all to a decline in fertility, but of course changes to mortality rates have played a role as well. In 1960, life expectancy in the United States was roughly age 70, but by 2015 it had reached age 79. Life expectancy works a lot like total fertility rate, in that it captures a snapshot of the mortality rates acting on people of different ages in a given year.
The Precariat: The New Dangerous Class by Guy Standing
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, Panopticon Jeremy Bentham, 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
Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan
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 pandemic, 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, longitudinal study, low skilled workers, low-wage service sector, Malacca Straits, mass immigration, microcredit, Nelson Mandela, 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, 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.
This Chair Rocks: A Manifiesto Against Ageism by Ashton Applewhite
affirmative action, Affordable Care Act / Obamacare, Airbnb, Albert Einstein, Atul Gawande, Buckminster Fuller, clean water, cognitive dissonance, crowdsourcing, desegregation, Downton Abbey, fixed income, follow your passion, ghettoisation, Google Hangouts, hiring and firing, income inequality, informal economy, Internet of things, invention of the printing press, job satisfaction, labor-force participation, life extension, longitudinal study, Mark Zuckerberg, Naomi Klein, obamacare, old age dependency ratio, RAND corporation, Ronald Reagan, Rosa Parks, sensible shoes, Silicon Valley, Skype, smart cities, Snapchat, stem cell, the built environment, urban decay, urban planning, white picket fence, women in the workforce
Pitting the generations against each other also obscures the key fact that income inequality does not discriminate by age. The wealthiest “one percent” consists of people of all ages, just like the ninety-nine. As leading economists have been arguing for years, growing wealth disparity within different age cohorts (not between them) underlies the shrinking prospects of ordinary Americans. Much of the intergenerational angst centers on the loaded term “old age dependency ratio”: the ratio of people over sixty-five to those aged fifteen–sixty-four, typically framed as the ratio of “dependents” to those of “working age.” With the number of people over sixty-five growing and the number in the workforce shrinking, the reasoning is that outnumbered youngers—often referred to as Gen Xers, millennials, and their as-yet-un-nicknamed offspring—will be left to shoulder enormous burdens.
CHAPTER SIX NOT DONE YET – THE WORKPLACE Older Americans are damned if we work and damned if we don’t. If we stay on the job, we’re criticized for taking jobs away from younger people. (Economists call that the “fixed lump of labor” fallacy.) If we step off the treadmill, we’re branded “greedy geezers” for sucking up more than our share of resources, letting younger workers support them, and leaving nothing in the pot for the next generation’s “golden years.” (The “old age dependency ratio” rears its ugly head again.) And we’re damned if we’re laid off, because experience is a liability in an ageist world. Younger workers encounter discrimination as well. Millennials are criticized for having “no work ethic” and “needing their hands held,” and recent graduates with no track records face higher unemployment rates than older workers. But once out of a job, workers like Arynita Armstrong have a much harder time finding another one.
The Fourth Revolution: The Global Race to Reinvent the State by John Micklethwait, Adrian Wooldridge
Admiral Zheng, affirmative action, Affordable Care Act / Obamacare, Asian financial crisis, assortative mating, banking crisis, barriers to entry, battle of ideas, Berlin Wall, Bernie Madoff, Boris Johnson, Bretton Woods, British Empire, cashless society, central bank independence, Chelsea Manning, circulation of elites, Clayton Christensen, Corn Laws, corporate governance, credit crunch, crony capitalism, Deng Xiaoping, Detroit bankruptcy, disintermediation, Edward Snowden, Etonian, failed state, Francis Fukuyama: the end of history, full employment, Gunnar Myrdal, income inequality, Khan Academy, Kickstarter, knowledge economy, Kodak vs Instagram, labor-force participation, laissez-faire capitalism, land reform, liberal capitalism, Martin Wolf, means of production, minimum wage unemployment, mittelstand, mobile money, Mont Pelerin Society, Nelson Mandela, night-watchman state, Norman Macrae, obamacare, oil shale / tar sands, old age dependency ratio, open economy, Parag Khanna, Peace of Westphalia, pension reform, pensions crisis, personalized medicine, Peter Thiel, plutocrats, Plutocrats, popular capitalism, profit maximization, rent control, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Coase, Ronald Reagan, school choice, school vouchers, Silicon Valley, Skype, special economic zone, too big to fail, total factor productivity, War on Poverty, Washington Consensus, Winter of Discontent, working-age population, zero-sum game
The numbers for many cities are even worse: San Bernardino in California and Detroit in Michigan both filed for bankruptcy because of these off-balance sheet obligations. And who will pay for all this? In “old Europe,” for instance, the working-age population peaked in 2012 at 308 million—and is set to decline to 265 million by 2060. These will have to support ever more old people: The old-age dependency ratio (the number of over-sixty-fives as a proportion of the number of twenty-to-sixty-four-year-olds) will rise from 28 percent to 58 percent—and that is assuming that the EU lets in more than a million young immigrants a year.9 Across the Atlantic, America continues to tax itself like a small-government country and spend like a big-government one while hiding its true liabilities by using tactics that would have made Bernie Madoff blush.
., 162 welfare state and, 77–78 Emanuel, Rahm, 216 emerging world: agriculture in, 238 as failing to grasp technological change, 18 innovation in, 17 lack of public confidence in, 13 local government in, 217 need for reform in, 14 urban population shift in, 218 “End of History, The” (Fukuyama), 262 Energetically Autonomous Tactical Robot (EATR), 182 Enlightenment, 42 entitlement reform, 95, 217, 234, 241–46 beneficiaries’ responsibilities and, 245 conditionality in, 17, 206, 244 disability insurance and, 244 globalization and, 245 information revolution and, 245 in Latin America, 17, 206, 244 means testing and, 243, 245 transparency and, 244–45 entitlements, 9, 10, 15, 16, 79, 100, 127, 141, 222, 228 aging population and, 124, 183–84, 232, 241–42 middle class and, 11, 17 pensions as, 79, 184, 243 as unfunded liabilities, 245–46, 264, 265 universal benefits in, 124, 141, 243–44 equality: capitalism and, 262–63 liberal state and, 69 of opportunity vs. result, 79, 228 sexual, 169 welfare state and, 68–69, 74, 79, 222 Western state and, 221 Equality (Tawney), 69 Erdogan, Recep Tayyip, 13, 254 Estonia, 121, 210 Euclid, 31, 33 eugenics, 67–68, 78, 169 euro, 99, 100, 258 euro crisis, 12, 100, 126, 130, 258–59 Europe: age of conquest in, 36–37, 39 compulsory sterilization in, 78 contest for secular supremacy in, 38–39 democracy’s failures in, 258–59 dysfunctional political systems in, 126 economic crisis in, 126 Enlightenment in, 42 government bloat in, 98–99 mercantilist policies in, 40 national consolidation in, 38–39 old-age dependency ratio in, 14–15 postwar era in, 78 public spending in, 99–100 revolutions of 1848 in, 54 technocratic bent in, 76–77, 259 transnational cooperation in, 76 wars of religion in, 34, 38 welfare state in, 75 European Atomic Energy Community, 76 European Central Bank, 258–59 European Coal and Steel Community, 76 European Commission, 254 European Economic Community, 76 European parliament, 258 European Union, 13, 16, 17, 76, 99, 108, 109, 258–59, 260 Extraordinary Black Book, The (Wade), 49 Exxon, 154 Fabians, 8, 21, 67, 72, 73, 96, 134, 169, 220 Facebook, 190–91 Falklands War, 94 Farrell, Diana, 132 fascism, 8, 71, 77, 252 Fatal Conceit: Errors of Socialism, The (Hayek), 134 Federal Communications Commission, 73 Federalist Papers, 5, 265 Federal Register, 117 Ferdinand II, King of Aragon, 37 filibusters, 256 financial crisis of 2007–8, 100, 164, 263 financial-services industry, 239 Finer, Samuel, 27, 276 Finland, 210 innovation in, 220 1990s financial crisis in, 176 fiscal crisis, as incentive for change, 198 Fisher, Antony, 81–82, 90, 92, 280 “flexicurity,” 173, 176 Ford, Henry, 189, 191, 201 fossil fuels, government subsidies for, 239 Foster, William, 58 Founding Fathers, 108 democracy and, 226, 250, 265 liberal state and, 44–45, 222 Fourteenth Amendment, 120 Fourth Revolution, 5 Asian-state competition as impetus for, 17, 163–64, 247 decentralization and, 216–19 democratic reform and, 249–70 diversity and, 214–16 entitlement reform and, see entitlement reform failure of current model as impetus for, 14–17 freedom and, 247, 248, 268, 270 government efficiency in, 233 ideological foundation of, 21, 28, 221–23, 232 information revolution and, 245, 246–47 infrastructure and, 232 innovation and, 219–20 monetary and fiscal reform in, 266–67 pluralism in, 211–14 as postbureaucratic, 211 pragmatism and, 18–19, 232–33 privatization and, 234–37 security and, 232 small government as principle of, 232, 264–69 subsidy-cutting and, 237–41 technology and, 18, 19–20, 233, 266–67 France, 43, 78 deficit spending in, 14 expanded bureaucracy in, 60 government bloat in, 12 pension age in, 16 public spending in, 75, 99–100 ruling elite of, 194 state capitalism in, 235 Francis I, King of France, 37 Fraser Institute, 174 fraternity, welfare state and, 74, 79 Frederick the Great, King of Prussia, 38 freedom: balance between security and, 230–31 as central tenet of Western state, 8, 23, 46, 68–69, 222, 256 core elements of, 223–24 democracy as threat to, 226, 250–51 diminished concept of, 225–27, 228–29 Fourth Revolution and, 247, 248, 268, 270 Hobbes and, 33 as ideological basis of liberal state, 69, 223–26 Mill and, 47–48, 55, 222, 224, 228, 250, 256, 268 necessary constraints on, 223 welfare state as threat to, 22, 74, 222, 265 see also rights Freedom House, 143, 252 free markets, 49, 59, 142 Friedman as evangelist for, 84, 86 Thatcher and, 93 free trade, 50, 54, 57 Mill’s espousal of, 55 French Revolution, 6, 44, 45–46, 249 Friedman, Milton, 81–87, 89, 93, 106, 128, 171, 280 background of, 82 big government as target of, 82, 84–85, 88 as free-market evangelist, 84, 86 Nobel Prize of, 82, 86, 91 Reagan and, 86 “Road to Hell” lecture of, 84 single currency opposed by, 99 Thatcher-Reagan revolution and, 8, 28, 97, 100 Friedman, Thomas, 163 Friedrich, Carl, 265 Fukuyama, Francis, 142, 143, 256, 262 Future of Freedom, The (Zakaria), 143 G20 countries, 15 Galbraith, John Kenneth, 85, 86 Galtieri, Leopoldo, 94 Galton, Francis, 68 Gardels, Nathan, 124 Gaskell, Elizabeth, 57 Gates, Bill, 97 Gazprom, 152, 153, 154 Geely, 150 General Electric (GE), 205, 243 General Motors (GM), 189, 190, 191, 233 General Theory of Employment, Interest and Money, The (Keynes), 70 Geometry (Euclid), 31 George III, King of England, 11, 41 Germany, Federal Republic of (West Germany), 75, 78, 232, 265 Germany, Imperial, 6, 60–61 Germany, Nazi, 71, 232 Germany, unified, 12, 22, 173, 186, 212 gerrymandering, 13, 106, 113, 125, 256–57, 264, 267 see also rotten boroughs Gillray, James, 227 Gladstone, William, 7 economizing by, 51–52, 224 small government as principle of, 51–52, 60 tax policy of, 51 globalization, 10, 191, 193 democracy and, 262 entitlement reform and, 245 government and, 10, 96, 200–207 health care and, 200–201 national determination and, 259–60, 262 Glorious Revolution (1688), 43 GOATs (Government of All the Talents), 215 Godolphin, Sidney, 31 Golden Dawn party, 259 Goldman Sachs, 120 Goldwater, Barry, 80, 86 Google, 189–90, 191, 233 Gore, Al, 95, 131, 198 government: anti-innovation bias of, 194–95, 212, 219 bloat in, 9–11, 18–19, 89–90, 98, 177, 222–23, 227, 229–30, 231, 233 centralization bias of, 192–93, 212, 216 challenges to reform in, 196–98 coercive power of, 198 efficiency of, 18–21, 37, 89, 187, 198–99, 213, 233, 247, 255 entrenched workforce of, 193–94 globalization and, 200–207 in-house bias of, 192, 212 local, 216–19, 267 public contempt for, 106, 112, 227–28, 230, 233, 251, 261 sunset clauses and, 118, 246, 266 technology and, 200, 207–11 uniformity bias of, 193–94, 212, 214 volunteerism and, 216 Government Accountability Office, 235 Grace Commission, 198 Gray, Vincent, 210 Great Britain: asylum seekers in, 54 as capitalist state, 50–54 commercial empire of, 39–40 deficit of, 177 education reform in, 58–59, 79, 212, 214–15 falling crime rate in, 181 fiscal reform in, 130–31 government bloat in, 89–90 health-care spending in, 90 landed artistocracy of, 48, 49 liberal revolution in, 46 low public confidence in, 11 national pride in, 61–62 patronage vs. meritocracy in, 50, 52–53, 222 postwar era in, 78 power of Anglican Church in, 48 public spending in, 9, 75 wars of, 6 “winter of discontent” in, 93 Great Depression, 69–70, 85 Great Exhibition of 1851, 54 Great Society, 77, 192 Great Western Railway, 65 Greece, 16 economy of, 120, 259 public-sector employees in, 115 public spending in, 99 Green, T.H., 61 Green River Formation, 236 Grenville family, 49–50 Grillo, Beppe, 12, 227 gross domestic product (GDP), unreliability of, 121 Grote, George, 54 Guangdong, China, 217 Gunpowder Plot (1605), 31 Hagel, Chuck, 256 Hall, Joseph, 35 Halsey, A.H., 88 Hamilton, Alexander, 5, 150 Hamilton, James, 120 happiness, right to, 48, 49 Hard Times (Dickens), 58 Havel, Václav, 252 Hayek, Friedrich, 10, 83, 85–86, 92, 93, 134, 170 Health and Social Security Department, British, 89 health care, 7, 9, 90, 98, 213 aging population and, 15, 183, 242 in China, 164 cost of, 110, 121, 205, 242–43 cost/outcome disparities in, 195 globalization and, 200–201 government domination of, 10 in India, 17, 18, 200–206 labor productivity in, 200 mass production in, 201–3 Obamacare and, 20, 98, 117, 199, 208, 217 role of doctors in, 203–5, 243 single-payer systems in, 205, 233, 243 special interest groups and, 200 in Sweden, 171–73 technology and, 183, 208–9 healthcare.gov, 199 health insurance, 141 health registries, 172, 183, 209 Heath, Edward, 92–93 Hegel, G.W.F., 45, 60–61 71 Helsinki, 220 Heritage Foundation, 92 Hewlett, Bill, 105 Higgins, David, 215 Hilton, Steve, 132 History of the Peloponnesian War (Thucydides), 250 Hitler, Adolf, 71 Hobbes, Thomas, 6, 8, 9, 21, 27–28, 29, 40, 44, 63, 135–36, 181, 219, 268 background of, 30–31 as controversial thinker, 31–32 on human nature, 29–30, 44–45 individual liberty and, 33 as materialist, 33 as royalist, 6, 18, 31–32 social contract and, 32, 34, 42, 222 Hogarth, William, 227 Hollande, François, 12, 16, 153, 184, 194 Holocaust, 78 Homestead Act (U.S., 1862), 62 House of Cards (TV show), 227 House of Commons, 127 House of Representatives, U.S., 97, 127 Howard, Philip, 118, 132, 195 Hu Jintao, 2 Huldai, Ron, 216 Hume, David, 43 Hungary, 254 Huntington, Samuel, 41–42 Hurun Report, 161 Iceland, 261 India, 8, 35, 36 China contrasted with, 146, 153 democracy in, 136, 146 economic stagnation in, 147 education in, 147 health care in, 17, 18, 200–206 infant mortality rate in, 201 lack of public confidence in, 13 local government in, 217–18 nepotism in, 162–63 Thatcherite reform in, 96 as weak state, 37 Indonesia, 142–43 health insurance in, 141 industry, landed aristocracy as opponent of, 48 Industry and Trade (Marshall), 233 information, access to, 210–11, 214 information revolution, 245, 246–47 information technology (IT), 18, 19–20 infrastructure: Fourth Revolution and, 232 spending on, 122, 232 innovation, 219–20 in business sector, 194 government bias against, 194–95, 212, 219 nation-state and, 37, 39 Institute for Energy Research, 236 Institute of Economic Affairs, 82, 92 Institute of Medicine, 204 Institute of Racial Biology, 78 interest groups, 16–17, 90, 111–15 Interior Department, U.S., 236 International Monetary Fund (IMF), 15, 76, 90 Asian financial crisis and, 142–43 Internet, 191, 260 health care and, 208–9 self-help and, 209 Iran, China and, 152 Iraq, 253 Iraq War, 143, 253 Ireland, 38 public spending in, 99–100 Isabella I, Queen of Castile, 37 Islamic world: antiscientific attitudes in, 41 in sixteenth and seventeenth centuries, 35 Istanbul, 35 Italy, 196, 259 pension reform in, 130 politicians’ pay and benefits in, 115 public spending in, 99–100 voter apathy in, 12 It’s Even Worse Than It Looks (Mann and Ornstein), 125–26, 227 Jackson, Andrew, 55 Jacques, Martin, 163 Jagger, Mick, 90 James I, King of England, 31 James II, King of England, 43 Japan, 15, 17, 36 Jarvis, Howard, 91 Jay, Douglas, 77 Jiang Jiemin, 154 Jiang Zemin, 142 Johnson, Boris, 216–17 Johnson, Lyndon, 77, 80, 87 Joseph, Keith, 92, 93 Juncker, Jean-Claude, 128 Kamarck, Elaine, 131–32 Kangxi, Emperor of China, 40 Kansas, 130 Kant, Immanuel, 224 Kaplan, Robert, 144 Kapoor, Anish, 34 Kennedy, Joseph, 73 Kentucky Fried Chicken, 185 Kerry, John, 96 Keynes, John Maynard, 22, 69–70, 76, 97 pragmatism of, 70–71 Keynesianism, 71, 77, 83, 95 counterrevolution against, 82–84 Khan, Salman, 180 Khan Academy, 180 King, Martin Luther, Jr., 79 Kingsley, Charles, 58 Kirk, Russell, 85 Kissinger, Henry, 133, 136 Kleiner, Morris, 118 Knight, Frank, 84 Knowledge Is Power Program (KIPP), 215 Kocher, Robert, 200 Kotlikoff, Laurence J., 120 Kristol, Irving, 87 Kroc, Ray, 185 Labour Party, British, 68, 69, 70, 77, 93, 94–95, 114 laissez-faire economics, 56, 57, 61, 65–66, 70, 71 Laski, Harold, 68, 134 Latin America: economies of, 8 entitlement reform in, 17, 206, 244 Lazzarini, Sergio, 153 Lee Hsien Loong, 135, 138 Lee Kuan Yew, 4, 17, 53, 133–34, 137, 139–41, 143, 144, 145, 147, 156, 170, 183, 244 authoritarianism of, 137, 138 small-government ideology of, 140, 165 Left, 62, 73, 88, 183 government bloat and, 10–11, 98 government efficiency and, 20, 187, 213 and growth of big government, 10, 98, 131, 175, 185, 228, 230, 231 subsidy-cutting and, 234, 237–38 Lehman Brothers, 14 Lenovo, 150 Le Pen, Marine, 259 Le Roy, Louis, 276 Leviathan, 10 Leviathan (Hobbes), 29, 32, 33, 34, 42 Leviathan, Monumenta 2011 (Kapoor), 34 Liberal Party, British, 68, 70 liberals, liberalism: and debate over size of government, 48, 49, 232 freedom as core tenet of, 69, 223–26, 232 right to happiness as tenet of, 48, 49 role of state as seen by, 21–22, 222–23, 226, 232 see also Left; liberal state liberal state, 6–7, 8, 220, 221 capitalism and, 50–54 competition and, 247 education in, 7, 48, 58–59 equality and, 69 expanded role of government in, 56–62 Founding Fathers and, 44–45, 222 freedom as ideological basis of, 69, 223–26, 232, 268 industrial revolution and, 246–47 meritocracy as principle of, 50, 52–53 protection of rights as primary role of, 45 rights of citizens expanded by, 7, 9, 48, 49, 51 rise of, 27–28, 269 small government as principle of, 48, 49, 51–52, 61, 232 libertarian Right, 82 liberty, see freedom Libya, 253 LifeSpring Hospitals, 202–3 Lincoln, Abraham, 62, 92 Lindahl, Mikael, 176 Lindgren, Astrid, 170 Lisbon, Treaty of (2007), 258 Little Dorrit (Dickens), 50 Liu Xiaobo, 166 Livingston, Ken, 217 Lloyd George, David, 62 lobbies, Congress and, 238–40, 257 Locke, John, 42, 43, 45 social contract and, 42, 222 Logic of Collective Action, The (Olson), 111 London School of Economics, 67, 74 Louis XIV, King of France, 38 Lowe, Robert, 58–59 L.
When the Money Runs Out: The End of Western Affluence by Stephen D. King
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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.
The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott
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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.
The State and the Stork: The Population Debate and Policy Making in US History by Derek S. Hoff
"Robert Solow", affirmative action, Alfred Russel Wallace, back-to-the-land, British Empire, business cycle, clean water, creative destruction, David Ricardo: comparative advantage, demographic transition, desegregation, Edward Glaeser, feminist movement, full employment, garden city movement, George Gilder, Gunnar Myrdal, immigration reform, income inequality, income per capita, invisible hand, Jane Jacobs, John Maynard Keynes: technological unemployment, Joseph Schumpeter, labor-force participation, manufacturing employment, mass immigration, New Economic Geography, new economy, old age dependency ratio, Paul Samuelson, peak oil, pensions crisis, profit motive, Ralph Waldo Emerson, road to serfdom, Ronald Reagan, Scientific racism, secular stagnation, Simon Kuznets, The Chicago School, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, Thorstein Veblen, trickle-down economics, urban planning, urban sprawl, wage slave, War on Poverty, white flight, zero-sum game
After all, the pace of population aging had remained fairly consistent throughout the twentieth century, and Social Security had recently returned to a surplus footing.106 Economist Robert Clark, for example, put the problem this way: “All of our projections indicate that the movement toward zero population growth will require even greater transfers of income to support the elderly, with the Social Security system being forced to bear much of the burden.”107 Leading demographer Nathan Keyfitz worried that older, less free-spending consumers might act as a drag on economic growth, but he observed that the empirical links between aging and economic performance were tenuous.108 Keyfitz was also concerned that a stagnant population would stunt individuals’ labor mobility as older workers clung to their jobs, but he concluded that the system could adjust, with workers becoming “more concerned with pay and the goods they can buy than with rank and title.”109 Several economists emphasized that the fiscal consequences of an increasing old-age dependency ratio would be offset by a reduction in social spending on the young.110 Brian Reddaway, the British Stable Population Keynesian who gained prominence in the 1930s, declared that “one should dismiss the increased pensions bogey as quantitatively negligible, so far as it rests on demographic factors.”111 A notable exception to the prevailing view was conservative Harvard economist Martin Feldstein, who later chaired President Reagan’s Council of Economic Advisers; in the mid 1970s, he unambiguously identified a “social security crisis.”112 Feldstein also claimed that Social Security reduced savings and stunted capital accumulation.113 In the short term, the new anxiety only modestly affected policy.114 The 1977 Social Security amendments addressed the deficit by raising taxes slightly and lowering benefits but kept intact the expansionary trajectory of the program.115 At the end of the 1970s, the Carter administration incorporated a warning about population aging into its budget projections, estimating that current demographic trends augured an increase in the total tax burden from 33 percent of GDP in 1980 to 50 percent in 2030.116 Moreover, the 1970s had exposed a fundamental weakness of Social Security: its tax structure left it vulnerable to economic downturns.
Kotlikoff and Scott Burns, The Coming Generational Storm: What You Need to Know about America’s Economic Future (Cambridge, Mass: MIT Press, 2004), 4; and Peter G. Peterson, Gray Dawn: How the Coming Age Wave Will Transform America—and the World (New York: Random House, 1999), 214. 8. Paul Krugman, “America’s Senior Moment,” review of Coming Generational Storm, by Kotlikoff and Burns, New York Review of Books, March 10, 2005, 6–11. 9. The concern in the 1970s with the old-age dependency ratio ironically came close on the heels of Malthusians’ insistence that the young imposed the biggest burden on society. 10. Although apprehension of overseas population growth remained the norm within the American population community in the 1970s, the emphasis on birth control as the primary means of fertility reduction gave way to a broader “developmental” approach that stressed the need for societal reforms, such as enhanced women’s rights.
Growth: From Microorganisms to Megacities by Vaclav Smil
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The ensuing sex disparity prevents large numbers of men from ever marrying, and creates the well-known challenges of unattached lives, more crime- and violence-prone males and more common female abductions. While populations will decline, their old age dependency ratios will grow. Between 1960 and 2015 the ratio rose from 15% to 22% in the US (4.5 workers for every old person), but it soared from just 9% to 43% in Japan, where it could reach (depending on demographic assumptions) at least 60% and as much as 82% (just 1.2 people working for every retiree) by 2050 (UN 2017). And thanks to China’s rapid aging, the 2050 old age dependency ratio may surpass 40% compared to just 13% in 2015, a shift for which the country’s economy is unprepared. But, once again, these aggregates do not tell the whole story because the depopulation process in every nation is characterized by large regional disparities.
And even if most people were willing to work past their normal retirement age, there would still be shortages of labor in health services as well as in occupations that (even if highly mechanized) will always require some demanding physical exertions. And a world dominated by the elderly may not be necessarily more peaceful (Longman 2010). Declining fertility rather than changing mortality is the dominant factor in contemporary population aging (Lee and Zhou 2017) and in a concurrent rise of old age dependency ratios. But forecasts are also complicated by uncertainties associated with aging. For example, forecasts of the western European population above the age of 80 have 95% probability intervals of 5.5–20.7% by 2050 and 5–4.8% by 2100, a surprisingly large difference (Lutz et al. 2008). Japan has been at the leading edge of the massive aging wave that has begun to engulf nearly all affluent nations.
Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King
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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.
No Ordinary Disruption: The Four Global Forces Breaking All the Trends by Richard Dobbs, James Manyika
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Across the European Union (EU), the population is expected to increase by 5 percent until 2040 and then start to shrink.16 In Germany (2014 fertility rate: 1.4), which has long stood out for its weak population growth, the European Commission believes the population could shrink by 19 percent by 2060.17 The country’s working-age population is expected to fall from fifty-four million in 2010 to thirty-six million in 2060.18 Proportion of elderly in global population is increasing rapidly NOTE: Old age dependency ratio = Population aged 65+ over population 15-64 SOURCE: McKinsey Global Institute analysis, UN population data Germany has been able to mask its decline by attracting immigrants from Russia, Turkey, Africa, and elsewhere. But not all countries possess the economic strength or cultural attributes necessary to attract new residents. Many European countries with low fertility rates are already suffering from massive brain drain, as young people leave to seek their fortunes elsewhere.
The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das
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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.
Grave New World: The End of Globalization, the Return of History by Stephen D. King
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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.
Heart of the Machine: Our Future in a World of Artificial Emotional Intelligence by Richard Yonck
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For years, Japan has been one of the leaders in developing such solutions as their population has been aging faster than almost any other country in the world. In 1990, only 12 percent of Japanese were over sixty-five, but in 2010, that number had more than doubled to 23 percent. By 2025, it’s estimated that 30 percent of Japan’s population will be senior citizens.3 As if this weren’t enough, Japan’s dependency ratio is skyrocketing as well. The old-age dependency ratio provides a snapshot of a nation’s population resources and demands and is calculated by dividing the population over the age of sixty-five by the working-age population. In 2010, this ratio was 36.1 percent, or 2.8 workers for each senior. By 2022 this ratio is expected to jump to 50.2 percent, or two workers supporting every senior. (Compare this to the United States in 2015 with a ratio of 22 percent, or 4.5 workers per senior.)
Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs
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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.
The Dawn of Innovation: The First American Industrial Revolution by Charles R. Morris
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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.