There is one absolute certainty about the future of ageism. We are going to hear a lot more about it. When ageism was first defined by American Robert Butler in 1969, there were under twenty million Americans over the age of sixty five. Today there are close to fifty five million. By 2060 they are forecast to reach ninety five million people. There will be five times as many people passed nominal pensionable age. There will be a much larger group of people to “rage against the dying of the light” (Newsletter #025) and promote ageism.
Populations around the world are plateauing and declining. Those over sixty fives will be a bigger percentage of the total. In the US today they are already nearly seventeen percent of the population. In Japan they are close to thirty percent. The Third Agers are an increasing part of those numbers. Physically and mentally they are active. They have spending power. All of which will influence the “ageing stereotype”.
The Nature of Ageism Will Change
Over the last twenty to thirty years a lot of the focus within “ageism” has been on employment. For the older generation that has meant a focus on maintaining employment from 55 to 65. The current legislative and policy initiatives are having an impact on workplace ageism. The removal of the compulsory retirement age in many countries has helped reset expectations. So too has the disappearance of “early retirement schemes”. With them went the sense of retirement entitlement that comes with age. The biggest pressure will however come from the raw demographics.
Where did the Workforce Go?
The latest population forecasts for China show a decline. The population (without immigration) has peaked in the last three years. The forecast shows a precipitous decline. By 2100 the total population is forecast to decline by half. So too has the working population. Huge declines are forecast in the number of people of working age between twenty and sixty four. The numbers will return to a level last seen in the nineteen fifties (Newsletter #038).
The same is happening all over the developed world. How can economic growth be maintained without a workforce?
Working Age Population Forecast Declines by Country
Source (Vollset, et al., 2020)
Magnus in his book on the macroeconomics of ageing, argues that there are two places that governments can look. (This of course assumes that attempts to increase fertility fail). Increasing workforce participation in the existing population and immigration.
Let’s look first at immigration. To have a real impact on the declines in the working population the level of immigration will have to rise. According to Magnus, UK and Danish immigration would have to double. For the other Western European countries immigration would have to increase between five and twelve times. Socially and politically these levels of immigration are not viable. For example, Spain would have to see immigrants at forty percent of the population, so severe is the drop in birthrate.
Increasing labour participation implies getting more of the population into work. There has been a structural shift since 2000 in most developed countries. Before then between seventy and eighty percent of men between fifteen and sixty four worked. The rates for women are much more variable. They range from seventy three percent in the USA and fifty eight percent in the EU15.
Male participation levels were ten percent lower in the fifty five to sixty four age group. This has been a focus for ageist activists. There is huge variation across countries. The European Central Bank estimates that the effective male retirement age for the EU was as low as sixty one in 2000. For women between 1980 and 2000 it fell to just under sixty.
From 2000 onwards the situation changed dramatically in the Eurozone. Ninety eight percent of the increase in the overall labour supply since then has come from those people between fifty five and seventy four.
In Europe the participation levels of men between fifty five and fifty nine have risen to the same levels as the forty five to forty nine year olds in 2000. When men choose to leave the workforce has also changed. In 1999 twenty percent left between the ages of fifty five to fifty nine. In 2019 that figure stood at seven percent. In 1999 thirty eight percent of men stopped work between sixty and sixty four. That number is now thirty percent. The pattern is the same for women. People are “retiring” much later. In fact they are now retiring after the state pensionable age.
The pensionable age does not necessarily reflect when people will retire. In 1920 the normal age when people stopped work was seventy to seventy four. It dropped as low as sixty for OECD countries in 1995 even though state pensionable age was 65. As people stay healthier longer they are being encouraged to work longer. Unfortunately in places like Japan this will have little effect on the working age population. The normal pensionable is sixty five, for many years most men and women have worked to seventy.
The pressure will be on for older people to work. Many will want to work. The focus on workforce ageism will decline. The battle to keep people in work until their retirement age is being won.
As the Third and Fourth Agers continue to consume then ageism may find a new focus there. The everyday discomforts of consuming may become more and more annoying to a larger and “young at heart” group. They may forget to be satisfied and start to agitate. Consuming is part of being independent. If we cannot consume we may feel older. Feeling older is not good for our life expectancy.