Gary Duncan, Economics editor
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From opening national borders to millions of foreign migrant workers, to compelling citizens to work longer and save more, to encouraging couples to have many more children, Europe’s leaders were urged this week to consider the far-reaching action needed to cope with a rapidly ageing population.
Europe is getting old, and fast. The entire continent is in the throes of fundamental and unprecedented changes in its population. The “demographic turning point” poses political, social and economic challenges that are as daunting in their scale as they are pervasive. The repercussions are set to alter every aspect of our lives.
As the so-called “ticking time bomb” of this demographic change ticks ever louder, this week saw some of the world’s leading experts on these issues gather with top decision-makers from governments, business and finance at the sixth annual Munich Economic Summit to grapple with the implications.
The summit, organised by Germany’s prestigious CESIfo economics think-tank and backed by the BMW Herbert Quandt Foundation, mapped out the high stakes of the changes on which Europe is embarked, and debated hard choices.
Europe is not, of course, alone in the developed world in facing the problem of population ageing. Before the end of this decade, for the first time in human history, the proportion of people aged 60 or over in the West will exceed the proportion of those aged under five. Yet much of Europe is set to be engulfed by this wave of change more completely and earlier than other parts of the West, turning it into an experimental test-bed for the phenomenon.
The driving forces of ageing were laid out by Hans-Werner Sinn, president of the Ifo Institute, and by Lans Bovenberg, of Tilburg University. Underlying the demographic crisis are two factors: not merely that we are all living longer but also that, at the same time, birth rates have plunged to levels below those necessary to replace the older people as they die. In Europe, the average age of the population has already climbed to reach 40 as healthier living, improved medical care and innovations in pharmaceuticals stretch longevity. By 2050, the average is set to rise to 50. And by mid-century, there will be 40 million Europeans aged 65 or over.
At the same time, there will be steadily fewer people of working age to support the elderly, thanks to falling birth rates. The average European woman now has fewer than 1.5 children. Within 25 years, there will be roughly 21 million fewer working Europeans.
As Jürgen Chrobog, chairman of the BMW Foundation, noted, the negative consequences for Europe’s economic output and competitiveness, as well as for social security systems, are as urgent as they are immense.
Yet there is no ready panacea for Europe’s leaders to seize upon. While potential measures are a political hard sell, governments face an ever-narrowing window of opportunity in which to act. As Mr Bovenberg spelt out: “The older voters are going to block the necessary reforms to make ageing an opportunity and not a threat.”
There was a broad consensus at the summit that reforms must imply some mixture of later retirement and longer working lives, less generous social security and increased saving by those at work to provide for their own financial security, as well as personal care. Speakers emphasised, too, that far-reaching cultural changes are required among employers, so that older people can carry on working and do so in flexible circumstances.
Two solutions that seemed less promising were promoting a higher birth rate and opening borders to younger migrant workers.
François Héran, of Paris’s National Institute for Demographic Studies, argued that since the key dynamic behind ageing was greater longevity, initiatives to increase the fertility rate could “never overcome the unavoidable part of population ageing”.
Nevertheless, Mr Héran and others agreed that, in some countries at least, measures to encourage people to have more children could at least help to maintain the active population. Mr Héran argued that financial incentives to women to have children were not successful. Pro-child policies in the workplace, schools, housing sector and planning were all required.
Professor Sinn cast doubt on resorting to a policy of increased immigration to bolster national workforces and cut dependency ratios. He cited calculations showing that 194 million immigrants would be required in the 15 nations of the preenlargement European Union by 2035 to keep the proportion of workers to retirees constant – even if migrants did not age. United Nations data suggested that 701 million immigrants would be required over the period 1995 to 2050.
However, although the challenges of an ageing Europe are immense, there was also much optimism. Not only were people living longer, but they remained fit and healthy for more of their lives.
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We have 5 month old twins and a 2 year old. We've relied on help only minimally but My Dad is quite poorly recently, my wife had to got back to work part time and on top of that her parents went on holiday too.
I'll get to the point.... in the last fortnight our lives were turned upside down, utterly!
The slightest little changes mentioned above knocked us for six!
I had to book days off work, we've then been late for work, we've had to get the twins plus the lad into nursery- which is horrible having to drop off your 5 month olds when they're that young anyway... which incidently also costs us a bomb!
We can cope, now and long term, we wouldn't change a thing but with just these small problems, it's been brought home just how badly off other families must be that don't have our minimal backup.
The government needs to INVEST in the population that's here NOW instead of shipping in allsorts for a quick buck!
Help young families HERE to enjoy having larger families.
Jez W, Leeds,
Productivity can, in principle, make up for declining population levels (speaking in terms of never ending economic expansion). However, as many here have noted, never ending human population growth is a pipe dream with a bad denouement.
Please visit the New England Coalition for Sustainable Population website to learn more.
Joe Bish, New England, USA
I'm quite alarmed at some of the suggested cures to this problem: they're all worse than the disease. Increasing birth rates (by banning abortion or contraception) would only postpone the problem because ultimately the human population must stop expanding. Every extra mouth comes with an extra pair of hands but not an extra acre of land. Even if the population ultimately stabilises at about 10 billion we'll have to push crop yields alot higher to avoid destroying more forest / wilderness etc. If it continued to expand beyond that disaster would occur sooner or later. That's without considering how to supply all these people with energy, water etc. Europe should be proud it's leading the world on stabilising human numbers. This "problem" is probaby overstated anyhow. Yes, we'll have to work a little longer and save a little more but part of the increased cost of pensions will be offset by a lower proportion of dependent children to be supported. Ignore the bible bashers !
Steve P, Swansea, UK
I don't follow Malcolm McClean's logic. There are plenty of older people born after WW2 and approaching retirement who are well educated, articulate and energetic, and who wish to continue working, perhaps not to the full tilt but nevertheless in a job where something useful can be done, money can be earned, and independence and self-worth bolstered. Moreover, the "older generation" is considered to be reliable and conscientious and has a great deal to offer. People are living longer and while 65 to our parents' generation was considered elderly, to us, it is certainly not. Why then would we be considering seeking menial tasks?
Regarding population and immigration, it is the population in Europe that is aging, with not enough youngsters in jobs and paying NI and taxes to fund older people's pensions. Immigration was supposed to be the quick fix for the pensions problem.
Kathryn, Vienna , Austria
If people are living longer and the extra years are fairly healthy ones this is good. There may be a wave of older people in the population moving up at present but his will pass. A few decades hence and the lower birth rate will mean more space, less polution, less demand for resources and so on. Fewer people equals better quality of life. It does not suit big business it does not suit those who would control us, but it would suit us. Any policy that has as its goal an obsession with maintaining the proportion in each age group by encouraging more breeding is insanity. Future generations will curse us when they have one square yard each
D. L Stephens, York, England
Why not make abortion and contraception illegal!!! Hang on, isn't that what the Catholic Church said about 40 yrs ago? Oh well, if you want to ignore God's word you can't really be surprised if things work out badly, can you?
Stephen, Ipswich, Suffolk
So funny in a way. When people age and are not replaced, their places can be filled by trees, solving at least 1 environmental problem. But no, King Economics demands more bodies for his wheels, so more people it will be!!
Maggy , Antwerp, Belgium
This problem will gradually and quietly sort itself out if politicians and economists would just stop worrying about it. Left to itself a declining European birthdate is EXACTLY what is required. I say "left to itself" - that is, without the dilution of its culture, civilisation and racial characteristics by the importation of millions of non-European immigrants.
This dilution is the aim of two opposing groups, socialists and big business, but for different reasons. The socialists, obviously, because they hate western history and values, and big business, obviously, because these things cannot be represented on a balance sheet where the profits from cheap labour can. Europe has seen bubonic plague, wars, famine and many a natural disaster over the centuries but, apparently, it can't cope with a looming pensions "disaster", "catastrophe", "crisis", "time-bomb", etc. Oh, Ye gods on Mount Olympus help us!!! Where shall we all hide?
Cassandra, Barnsley,
Biggest media hype in recent history. There is no such thing as eternal growth, and if the bitter pill of an ageing population is postponed, it will become only worse to swallow in the future.
Besides, if the Netherlands can successfully manage its finances and receive the verdict of perfectly prepared to handle the issue, so can the rest of Europe. This isn't the disaster it is made out to be. Not by a long shot.
Erik, The Hague, Netherlands
I'm outraged.
@Paul from Kendal. What exactly are you saying? What exactly should we be sowing? Should we turn the clock back and not provide sexual education to developing adults? Should we deny access to family planning? Should we deny women the right to control their own bodies? Should parenthood be a choice or an accident? Should raising children be something one chooses to do, or something we are forced to do because we didn't know about or were denied access to family planning resources?
Perhaps, as someone else has pointed out, people are choosing not to have as many children because we live in a time where basic economics dictate our actions, and raising children is a much, much more expensive burden than before. Given that, is it not surprising that only those who have thought it through and have the resources are the ones that commit fully to the responsibilty of raising a child. Or would you prefer that accidental children have a life of poverty to look forward to? Hmmm?
Robert Thé, London, UK
Ian from Exmouth is EXACTLy right. The housing market -- closely followed by young people's employment conditions -- is the major factor behind younger generations not having children. I'm 30, with 3 degrees with a professional graduate job in the public sector (as is my husband) and we could no more afford to have a child than we could land on the moon. I long for a baby -- I lie awake at night, wishing I could start a family, but we just can't afford it. The cost of buying a house where we live in the SE is so ridiculous that we have no hope of buying. But even the cost of rent and the general cost of living, paying into a pension etc. is so high that we couldn't afford the maternity leave, childcare and to pay the rent and eat on two salaries, never mind one. None of my friends have children either. Our managers and senior colleagues have final salary pensions and permanent jobs: like many under 40, we are on fixed term/rolling contracts with minimal pension provision.
Isabel, London ,
The answers are as follows: a.) Expect and allow people to work to an older age, b.) encourage women to have a least two children, c.) Increase funding for automation and robotic research to cover more of the labour intensive jobs, including farming, and d.) forget about importing low grade employees from other countries. In the long run, cultural changes will hurt the unity of the country much more than a shortage of young people. I believe you cansee the effect of prior decisions on composition of the UK now. Also, if you live longer, you cannot expect the country to pay you for sitting on a beach in Malaga or elsewhere for 30 years! I am still working at 77.
Tony Spurgin, San Diego, California, USA
Umm, perhaps the fact that housing is no longer affordable may play some part in this (in the UK at least). If you do buy, children are out of the question for most average earners. If you don't and rent instead, then you and your family are in continuous risk of eviction.
I a few young couples earning a decent salary in which money that would've once allowed them to raise a child or two is now needed just for a mortgage.
The boomers will reap what they sow when the discover there isn't enough workers to fund their pensions, buy there expensive houses or rent their BTLs.
PT, Tynemouth, UK
I am almost 51 fit and single. I have been very happily divorced for 20 years. I have many friends some students some older. I still like to go out clubbing and I love pop concerts. It does not mean I am childish. It means I can still do and enjoy all the things I always have. I have always had more than one job in order to enjoy the lifestyle I do.
at one time I had 6 jobs running consecutaively. I still enjoy working and only do jobs I enjoy, I intend to work until I die which I have also planned and arranged. At the moment I live abroad for 6-9 months of the year and left England with one bag and £70 in my pocket I am a very happy person. I also do not drink, smoke, or drive. But I have the sun, A beach and a pool. I would be quite happy to work on my laptop from the beach as I am at this very moment.
Fiona McCormick, Limassol, Cyprus
it is so dramatic that China, although the population of which is huge, still faces the problem of ageing society. especially the one-child policy was and is still in effect.
but China won't face the problem of labour lacking, a lot of young pepole,even college students, are still out of work. Thus I see a need in the labour flow-in to Europe from the outside world for the interest of both.
Jenny, Beijing, China
I work in aged care. Serious attention needs to be given to looking after the disabled elderly. The numbers and percentages of mentally and/or physically disabled elderly are rising faster than the actual numbers of over 65s. Looking after such people requires high labour content, and you need special people to do it. High levels of patience, flexibility, and respect are essential. This work is traditionally low paid and institutions are usually underfunded and over-regulated by governments. Who is going to do all this work? Or is euthanasia going to be encouraged?
Kenneth Hutchison, Tauranga, New Zealand
Abolish rules enforcing retirement at a given age .Let people work as long as they wish.
COLIN , Hong Kong,
when you reach retirement age it is unreasonable to expect the employee to be able to continue to work full time. Unless a realistic option of part time work or a less demanding job is offered with no loss of monies it will be an unrealsic goal.
mrs e g hamnett, manchester, lancashire
Why make a mountain out of a molehill? To borrow a phrase from Margaret Thatcher - albeit on a different subject - the current pensions crisis has been "predictable and predicted, foreseeable and foreseen" since the baby boom of 1946 - the massive, sudden increase in the population when the war was over and the troops came back home. The babies born then have now become pensioners. Nobody in successive governments has done anything whatever to fund the increased payout which became due to the baby-boom 60-year olds last year, nor will they do anything to fund the increased payout due to the relevant 65-year-olds in 2011.
Edmund Burke, Kingston upon Thames, England
A few years ago some company directors were asked in what roles they would employ someone over 65. The only two were cleaning lady and board member.
What we are going to need is far more old people in menial jobs. Though a handful will be able to compete with young people for professional or skilled occupations, the majority can't.
Malcolm McLean, Bradford, UK
Too many people being born is one half of the dichotomy. Too few people earning enough money to support the aged is the other half of this dichotomy. How are we going to make birth control mandatory without introducing a death control? It is unpleasant but it's an arguement we are going to have to confront if we wish to retain some vestiges of the planet as we have known it.
Also, faced with all the major religons and their screaming about the right to have untrammelled breeding rights. We are absolutely rooted. No pun intended. As one whose life is closer to the end rather than the beginning, I wish later generations the best of luck in dealing with the problem. Incidentally, I don't think it is the politicans ego that is the problem. It is the fear that big business and the various churches will be outraged at the thought the cannon fodder they rely on will be reduced in size.
Venise Alstergren, MELBOURNE, VIC. AUSTRALIA
Make a short working week a reality for decent jobs not just for rubbish one would be a start. A lot of older people would like to work but not with the 50 hr minimum, unpaid overtime culture.
D CAge, Highworth, UK
We should be asking ourselves why we have a dearth of young indigenous population. 'Wouldn't have anything to do with contraception, abortion and disdain for having children to spoil our fun would it? You reap what you sow.
Paul, Kendal, UK
The world population was 2 billion when I was born and by all accounts it is 6.6 billion today 73 years later! It must be nonsense to suggest we need a higher birthrate, even if you are a nationalist in support of the obsolescent nation state. I retired 23 years ago and since then have worked outside the UK. I find it difficult to accept that we do not have the experience and talent when we deliberately rig the social scene so that no one over 50 is employable usefully! It might even be at the age of 73 I will continue to work for some years more!
Brian Lewis, Manila, Philippines
Human longevity has never been a linear progression. Mediaeval peasantry had much shorter lifespans than their palaeolithic equivalent . The very elderly now were born between the wars; mostly they had no cars and were physically active. I've no idea what will happen with the current generation.
Gerry, exeter, england devon
This Governments stance on pushing parents out to work doesn't help the UK's situation.
The core of the problem is the housing market. Mortgage and rent costs to families with young children coupled with childcare costs are crippling.
What incentives are there for people to have children? France is taking the longer term view by providing enough assistance to enable a parent to stay at home full time to look after the children. The token gesture by this government i.e. pitiful tax break on cost of childcare is a joke.
Ian, Exmouth, Devon, UK
The population of the world has already more than tripled in the last 100 years. The population of the UK has increased by a third since the end of WW2. We need a better solution to the aging population problem than to encourage even more births. The population can't increase ad infinitum.
Most of the problems of the world have over population of people as a root cause; from food production to lack of fresh water to lack of living space. Man made CO2 that is blamed for global warming is also made worse by the size of the population.
If we were talking about animals and not human beings we would be looking towards a cull. At the very least we need to halt population growth and work out ways of reducing the population down to a more sustainable number. But politicians don't know how to deal with reducing numbers. To them the size of the population is proportional to the size of their egos.
Frank, Winchester,
According to the above article if Europe is dying of old age, then it implies that migration of young workers to look after the elderly can only really come from Africa and Asia.
Is this the beginning of the end of Europeans? or just more PC academic twaddle?.
An advanced society is one that has reasonable control of its population as a balance against environmental impact. The use of young migrant slave labour for example to pick strawberrys or Brussel sprouts is a retrograde step in a countries advancement, and better done with machines. And for how long would young migrants be content to serve the elderly of another race that held sway.
One thing the western world does need to overcome is its fixation with retirement, dying in a chair watching day time TV or playing golf is shamefull. We are born creatures of strife and should die doing so, in what ever way helps contribute to our fellow citizens standard of life, and more importantly our own self worth
wayne, huntingdon, cambs
Nonsense, this is a rue to justify immigration into your country, Britain has the highest teenage pregnancies in Europe, I no longer believe anyhting that politicians say, surprise, surprise!!
Mark Jones, staffordshire, UK
Hopefully in a few years when this problem kicks in hard, technology will be such that jobs can be performed almost solely from a computer, or in the house with relatively little input.
I hear many stories of retired people working the stock exchange and doing other such 'low input' forms of money making.
Maybe we will all be looking forward to working from our PCs when we are 80 years old, getting paid to do office work that is currently done on site?
The younger people specialising in the jobs that require manual work and travel or such activities, with the older people focussing on operating a PC from home.
Either way, we will have to face that something must change.
Jamie, Halifax, West Yorkshire