The problem with grandparents

December 8, 2014

Your grandmother may be causing you economic problems you don’t even know about.

A couple of weeks ago Data Dive featured an Economist video that neatly describes how world demographics are shifting in shape from a pyramid to something more resembling a beehive as family sizes shrink and lifespans lengthen. But in some ways this can feel like an abstraction; people living longer should be a good thing, right?

A new Reuters interactive graphic about aging in the European Union helps elucidate why this is a worry: “As the post-World War II baby boom generation retires, the demographic dividend which has been positive for the last 40 years will turn negative for at least as long, according to projections by Eurostat.”

Retirees don’t contribute as much to the economy as they did when they were employed, and since they’ve stopped working, they stop earning, which means they can’t consume as much, so it’s a double hit. The elderly often rely on their children and the government for help, but with fewer younger people in the population, there simply aren’t enough bodies directly contributing to the economy.

In the United States the problem is less severe, with immigration helping to keep the population younger. Innovation is a wild card that could help grant the economy more efficiency. On the flip side, medical breakthroughs will likely lead to even longer lives, which will only extend the need for support. Insofar as we are all part of a global economy, the drag that aging puts on Europe and the rest of the world will be a global issue for decades to come. Try to break it to grandma gently.

6 comments

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This pro-immigration article is full of errors. It repeats the fallacy that a younger population is good for society.

History shows the opposite is true. One need only consider the nations with the youngest median age today, for example Nigeria, Mexico and India. Then compare those societies with the nations having the oldest median age. Here are the numbers:
http://en.wikipedia.org/wiki/List_of_cou ntries_by_median_age

It’s very clear that nations with the youngest median age have the greatest poverty, crime and corruption. Think Nigeria, Mexico and India. The most advanced nations have the highest median ages. Think Switzerland, Norway, Finland and Japan.

Picture an American husband and a wife running a household, with, let’s say, three children. Assume the family is in debt, working very hard, and struggling to make ends meet. Would having even more children remedy their financial situation? Of course not.

Posted by AdamSmith | Report as abusive

For most of history and before might meant right.

If you had strength of a sort, be it physical, mental or economic your “lot in life” was generally better than that of others. In such societies, those “on top” didn’t have to be polite, compassionate, merciful or display any of the recognized traits of “civilization.

Samuel Colt made the multitudes of those NOT strong “equal”. Majority preference has led to the mirage of an egalitarian democracy in the twentieth century. It has rather naturally followed that those who accumulate useful knowledge generally have skills and experience of increasing advantage as they age. That’s why the elders in most civilized societies control a majority of the wealth.

Today America as well as the rest the world has an exploding “underclass” who demand economic equality without having earned it. It is those with no money, no education, no skills, no property, no job and little chance of accumulating any of these things that are breeding at a rate that would embarrass rodents. By and large these individuals embrace democracy because they think they can vote themselves the “good life” over time.

Unfortunately, governments make nothing. That which they give they must first take from someone else. So it is probably inevitable that governments the world over will increasingly appropriate, by taxation or increasing costs of necessary health care, wealth amassed a little at a time over many, many years so it can be redistributed into the hands of the largest voting block. Can’t have all those “senior citizens” sitting on their own money or spending it on non-essentials like enjoying golf and cruises.

Perhaps the best that can be hoped for is a “Star Trek” economy where the basic needs of everyone breathing are met, and only those who want to work will do so, and then only such professions as they choose and only so long as they wish. We live in interesting times.

Posted by OneOfTheSheep | Report as abusive

It repeats the fallacy that a younger population is good for society.

In fact history shows the opposite is true. One need only consider the nations with the youngest median age, for example Nigeria, Mexico and India. Then compare those societies with the nations having the oldest median age.

It’s very clear that nations with the youngest median age have the greatest poverty, crime and corruption: Think Nigeria, Mexico and India. The most advanced nations have the highest median ages: Think Switzerland, Norway, Finland, Japan, Germany, Britain.

Picture a hypothetical American husband and a wife running a household, with, let’s say three children. Assume they are in debt, working very hard, and struggling to make ends meet. Would having even more children remedy their financial situation? Of course not.

Posted by AdamSmith | Report as abusive

Aside from being snarky and disrespectful, what exactly is your point? That Grandma should join the Hemlock Society?

Posted by StevenPiper | Report as abusive

Somebody finally woke up that this?
On top of this for the working people the take home pay is less and now you suddenly find out that people are not spending enough money i.e. going deeper in debt. The banks are sitting all the money that the Federal Reserve printed for them and stays there.

Putting this in simple words you have (had)a consumers based economy, Money that should be flowing through the system but isn’t. People are or are going broke and now the seniors that brought you all this wonderful life by being careful with their money now no longer have the option to spend their declining savings due to the banks and stock market shenanigans.

Hello rockets scientist you finally woke up?

Posted by cynical175 | Report as abusive

C- opinion, Mr. Corones

For most of history and before might meant right.

If you had strength of a sort, be it physical, mental or economic your “lot in life” was generally better than that of others. In such societies, those “on top” didn’t have to be polite, compassionate, merciful or display any of the recognized traits of “civilization.

Samuel Colt made the multitudes of those NOT strong “equal”. Majority preference has led to the mirage of an egalitarian democracy in the twentieth century. It has rather naturally followed that those who accumulate useful knowledge generally have skills and experience of increasing advantage as they age. That’s why the elders in most civilized societies control a majority of the wealth.

Today America as well as the rest the world has an exploding “underclass” who demand economic equality without having earned it. It is those with no money, no education, no skills, no property, no job and little chance of accumulating any of these things that are breeding at a rate that would embarrass rodents. By and large these individuals embrace democracy because they think they can vote themselves the “good life” over time.

Unfortunately, governments make nothing. That which they give they must first take from someone else. So it is probably inevitable that governments the world over will increasingly appropriate, by taxation or increasing costs of necessary health care, wealth amassed a little at a time over many, many years so it can be redistributed into the hands of the largest voting block. Can’t have all those “senior citizens” sitting on their own money or spending it on non-essentials like enjoying golf and cruises.

Perhaps the best that can be hoped for is a “Star Trek” economy where the basic needs of everyone breathing are met, and only those who want to work will do so, and then only such professions as they choose and only so long as they wish. We live in interesting times.

Posted by OneOfTheSheep | Report as abusive