Reuters Money

The graying of America prompts debate about nuts-and-bolts issues such as inadequate retirement savings, and the future of Social Security and Medicare. But Ted Fishman is a big picture thinker with a deep understanding of global trends. In his new book, Shock of Gray, he explains how the aging of the world’s population will drive globalization and immigration patterns in the years ahead, and determine the economic destiny of nations – and the news isn’t all bad.

Shock of Gray grew out of themes Fishman — a veteran journalist and former Chicago Mercantile Exchange trader — explored in his first book, New York Times bestseller China Inc.: How the Rise of the Next Superpower Challenges the World.

Q: What do Americans need to understand about the global aging phenomenon?

A: First, populations age differently than people do. People age minute by minute according to the clock. Populations age when people live longer than before and when families are smaller than in the past. America’s baby boom was more robust than in other, more rapidly aging countries, so the sheer number of Americans in later life is big. But the U.S. is aging a little less rapidly than other developed countries, and slower than some developing countries, including China and Mexico. Still, our median age pushes higher every year.

Robust immigration into the U.S. helps America age less quickly than most other aging countries, but the numbers of young immigrants will never be enough to reverse the aging of our population.

Q: What are the implications for the U.S. of having such a lopsided population?

A: It’s a wonderful circumstance overall, since we get to live longer, but we have to adjust to a reality humankind has never faced before. Americans who reach age 60 have a pretty good chance of getting to 95. Our aging country faces a swelling number of dependent elders at the upper reaches of the lifespan. Just as it will be more common for people in their late sixties and seventies to work, it will also be common for those older workers to have living parents to tend to. By the way, our workforce over 50 will grow to three times its current size, but the number of younger workers will stay nearly constant. Virtually all the expansion of the U.S. workforce will be in the upper age range.

It’s also very likely that older Americans will have very small families to look after them when they need it. And often, the families are separated by big geographical distances. Now, many families rely on immigrants to provide care services family members themselves cannot, or will not, take on. This is one way that aging is a kind of global enterprise.

Q: You describe a rolling globalization of the workforce driven by aging. How does that work?

A: The built-in costs of an aging workforce are higher. With an aging workforce, employers find ways to make their workforce more flexible in ways that avoid the age-related costs. Firm-specific knowledge becomes less important, so there are fewer reasons to give raises. And, employers start thinking about where they can automate or shift jobs abroad. Currently, the standard retirement ages in every developed country—when workers can start to get social security– are higher than the ages that people actually leave their primary jobs. People are encouraged to leave; they are bought out, made redundant or left in the cold when their jobs move.

Q: What advice can you offer to people who are closing in on retirement to help them deal with these trends?

A: If you’re already retired, you may have children entering that catch-up period in their fifties where their employment is newly imperiled. So if you were counting on help from them, you might get more time from them but less money! I think the environment will push more family members who are available into the caregiving role.

And for workers at mid-career, its the flip of that – you have to try to ensure that your labor isn’t devalued. Need to make sure that you have a good inventory of skills and a strong social network before you find yourself in an employment crisis.

Q: What’s the best way to avoid that crisis?

A: The only real defense is to not have cookie-cutter skills. We have a large group that hasn’t kept its skills current. You might be a great machinists in your type of factory – but your factory may have a great outsourcing strategy. So you need a more generalizable skill.

Q: What does the global age wave mean for today’s young people – those in their 20s, 30s or 40s?

A: When people have smaller families – whether in the U.S. or abroad — they tend to marshal older adults in their families to serve the children. The older people make generous remittances down to the younger generations. The big miracle is what this does for younger people – it’s part of the world’s prosperity formula.

In the U.S., whites who are in the middle class or better have made a huge move to private education. Is some of that racism? Maybe. But with fewer children at home, private schools are newly affordable and are perceived as educationally superior.

So, for groups in America with this profile, there will be an increasing class divide – the families with fewer children will get better education.

Q: You offer some tongue-in-cheek advice about how to live long.

A: I was cheered by the good news I found on nitrated meats! I learned about this when I studied aging in Spain. There isn’t a single food in the world that is more enticing than Spanish ham – and they eat so much of it. So, their longevity can’t be the result of the traditional Mediterranean diet. I did run across research suggesting that nitrated meats may have same beneficial effect on the heart as nitroglycerin. As a Chicagoan who loves hot dogs, I love that and pray the research isn’t overturned before lunch tomorrow.

Photo: Ted C. Fishman in an undated photo by Alan Thomas. REUTERS/Handout