Changes in demographics, which are statistical data associated with particular groups and population, arguably produce a significant impact on both socio-economic aspects of society. One such demographic change that is sending a ripple effect countrywide and globally is the shift in aging figures. Ideally, such population changes often create myriad issues for policymakers, including how to create a suitable retirement age to absorb the young and still ensure the elderly are not retired too early (Restrepo & Rozental, 1994). Most importantly, changes in the demographics of the elderly can create other problems, such as unsuitable pension commitments as well as high healthcare costs. All these concerns can significantly destabilize and damage the high living standards, better health cover, pension covers, and many others. This paper explores the current aging demographics changes and how these changes affect society.
For the past one century, perhaps due to better healthcare outcomes, improved living standards, and better economic times, it is estimated that the population of the elderly (those aged 65 years and above) has grown at an unprecedented rate. Presently, it is estimated that approximately 8.5% (roughly 617 million people) of the globe’s population is aged 65 years and above. A new report titled “An Aging World” released in 2015 by the U.S. Census Bureau forecasts the figure to shift close to 17 percent (nearly 1.6 billion people) of the total world’s population by 2050. The report also predicts a similar trend in the U.S., which is expected to record rise from the current 48 million to roughly 88 million people by 2050. Globally, the number of the “oldest people” (those aged 80 years and above) was as well expected to triple from 126.5 million in 2015 to roughly 446.6 million in 20150 (National Institute of Health, 2016). The increase in the number of the elderly is predicted by experts to cause a ripple-down socio-economic effect on society.
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The first potential effect is a decline in the working-age population. A population that is quickly aging implies that there are fewer individuals (those deemed as having the right-working age) in the economy, a factor that can create a supply shortage of skilled and qualified employees, making it more challenging for companies to meet all their labor requirements. Consequently, a country that cannot hire the right personnel in the required numbers faces a wide range of adverse effects, including increased labor costs, higher cost of productivity, declining productivity, as well as lack of international competitiveness. In some occasions, these labor shortages might push wage prices up; thereby possibly causing a bigger problem in wage inflation.
An increase in the number of the elderly also means a potential rise in healthcare costs. Today, countries like the U.S. and China, who have some of the incredible numbers of the elderly persons, are spending significant amounts of money and insurance to ensure these populations lead more comfortable and healthier lives. For example, Forbes lead journalist Howard Gleckman writes that the U.S. federal government is planning to spend approximately half of its budget on the elderly in by 2029, which will come from primarily Medicare and Social Security. During last year’s financial year, the country spent approximately 40% percent ($1.5 trillion).
Lastly, although an increase in the number of the elderly in society can create several social and economic problems, including reducing the working-age population and increasing healthcare costs, healthcare experts believe its benefit somehow can improve specific sectors of society. In most instances, this rise marks a treacherous journey of social and economic reforms, including the development of new healthcare reforms and interventions and the creation of better economic policies. Governments must design better ways to navigate through this broad range of issues that are likely to occur due to this demographic change.
References
Gleckman, H. (2019). The federal government will spend half of its budget on older adults in ten years. Forbes. Retrieved from https://www.forbes.com/
National Institute of Health. (2016). Worlds older population grows dramatically. Retrieved from https://www.nih.gov/news-events/news-releases/worlds-older-population-grows-dramatically
Restrepo, H. E., & Rozental, M. (1994). The social impact on aging populations: Some significant issues. Social Science & Medicine, 39 (9), 1323-1336.
