SANTA ANA, California / The Orange County Register / Opinion / May 20, 2010
Financial demands of America's Longevity Revolution – 50% increase in life expectancy over the last 100 years – could bring unparalleled challenges.
On the face of it, we should be breaking out the champagne. But economists, demographers and policymakers point to a dark cloud hanging over the Longevity Revolution.
The experts ask: How will we pay for longer lives? Will the financial demands of an aging society bring on an economic meltdown? These questions were starkly punctuated on March 25 by the Congressional Budget Office's shocking announcement that in 2010 revenues for Social Security will fall short of payouts by $29 billion. That wasn't supposed to happen until 2017. It's the tip of an ugly iceberg that we have been ignoring.
The bigger picture
•The 2010 census is about to show that older adults will represent the largest single segment of our population, greater than small children, adolescents, young or middle-aged adults.
•When Social Security was enacted in 1935, there were more than 40 workers for each recipient. Now there are 3.3 and we are heading to fewer than two.
•There is $2.4 trillion in the Social Security Trust fund, which is fed by the Social Security payroll tax from individuals and employers. Those revenues are declining because of the current economic recession. By 2041, or perhaps earlier based on the latest announcement by the Congressional Budget Office, the fund will run out. What then? How will this pay-as-you-go program maintain promised payouts?
•Will the fund even be available over the next two decades? The $2.4 trillion is not cash in a "lock box." The government borrows the trust fund assets to finance government operations, meaning that the fund consists of promissory notes.
•When the Social Security tax shortfall climbs and note redemptions come due, will the government be able to come up with the money?
•Birthrates among our industrialized economic partners in the global economy have fallen dramatically. Many countries like Italy, France, Germany and Japan will show significant population losses over the coming decades and into the next century as their percentages of elderly rise. The decline of these nations due to inadequate workforces will impact the U.S. economy.
•The U.S. birthrate is near replacement level, fed largely by immigrants who have a significantly higher birthrate than the indigenous population. Yet there are efforts to curtail, if not drastically reduce, immigration.
•The booming economies of India and China are likely to attract immigrants away from the U.S. and other industrialized nations. We are already experiencing reverse immigration, and experts say the trend will accelerate. The result will not only be population loss but a brain drain that will weaken a comparatively diminishing productive workforce.
•A healthy workforce will be vital to support the growing elderly population. But the epidemic rise of chronic illnesses in children, young and middle-aged adults will reduce productivity now and will burden the healthcare system later.
•We lack the prevention programs necessary to eliminate, delay, or reduce chronic illnesses. Out of our annual $2.5 trillion dollar outlay for healthcare, we spend less than 3 percent on prevention. And most of that goes for inoculations and other public health measures, but almost nothing for changing the behaviors that underlie the rising health epidemics.
•The demographic shift to the dominance of older adults will bring vast changes. Age makes a difference in lifestyle, social and political philosophies, tastes in fashion, entertainment, spirituality and religion, marriage and other relationships, just to name a few.
To address the Longevity Revolution effectively we have to get out of the rut of a one-dimensional approach. Tunnel vision has led economists and demographers to offer a simplistic solution to the economic crunch: "Older people will just have to work longer." But willbaby boomers and Generation X cooperate?
Ask 45- to 60-year-olds about work and you might hear, "I'm going to work till I drop." But pose that question to folks over 65, when it really counts for augmenting income at the point that entitlements kick in, and you are apt to get a less enthusiastic responses – more so after age 70.
The Longevity Revolution is comparable in scope to other societal revolutions like the Renaissance and the Industrial Revolution – with one glaring difference. The Renaissance and the Industrial revolutions created new industries, new jobs, expanded opportunities, and brought higher standards of living to great numbers of people. They added to productivity. The Longevity Revolution drains resources. In fact, most of the rhetoric about longevity speaks to strategies for stemming the financial hemorrhaging. The elderly are seen as takers not makers. New York Times op-ed commentator David Brooks calls this "reverse generativity."
If a sweeping societal revolution that takes rather than adds to productivity cannot be sustained, then we have to start thinking seriously about a new paradigm for an aging society – one that enables aging and extended life to contribute to productivity. That is the challenge of the Longevity Revolution.
Adding to productivity
Traditional work is just one kind of productivity. There are others. Some already exist on a relatively small scale considering the size of the elderly population: Mentoring the young, advising young entrepreneurs, offering living space to struggling young people in return for services, harnessing the talents and skills of professionals for advocacy and advisory and training roles. These activities contribute indirectly to productivity by helping others become productive. And surely there are other innovative strategies within reach if we are committed to pursuing this path.
We need a national initiative to implement these new strategies, with satellites reaching into every community – storefronts and offices staffed by skilled senior volunteers. Every town and neighborhood should have nearby locations where retirees can be evaluated and offered opportunities for service that draw on their skills and interests. These settings would be staffed by retired professionals who would match retirees with responsibilities, assist with the initial contacts, and then shepherd them along in a supportive seamless process. Retirees would thus be empowered to take on roles that directly or indirectly add to productivity.
Corporations and other business enterprises could be persuaded to provide the space, making the enterprise virtually cost free. Some companies are already on board. Since 1992, the Crown America Corporation has provided, rent free, a 6000-square-foot storefront in their Frackville, Pa., mall for a "Lifelong Learning Center" and other programs, including high school completion classes and a career resource room.
A nationwide network of similar cost-free facilities could provide training for older workers who need to refresh or augment their skills. It could also help retired seniors – or those about to retire – create home-based or online businesses.
The initiatives I'm describing would address the shortcomings of existing volunteer programs. Far too many of the overlapping offerings require a would-be volunteer to navigate a confusing labyrinth of lists and leads that may work for the determined seeker. But to assimilate the 77 million baby boomers into productive roles, we will need a more carefully crafted operation – one that is local and personal.
For this ambitious plan to gain traction, we must embrace a new philosophy and ethic for the age of longevity. Dr. James Birren, one of the pioneers in the field of gerontology, proposed 15 commandments for responsible living in later life that constitute a bold vision of third-agers fully participating as active members of society. I call it, "adding to productivity."
The new elderly
The timing is perfect for launching a Third Age Productivity Corps. According to the Merrill Lynch New Retirement Survey, the boomers will redefine retirement. The majority choice is not isolated senior enclaves in the Sun Belt. Many prefer to stay in their present communities or to settle in urban areas and college towns for simulating activities. The boomers are eager to serve, but want opportunities that have impact.
Everyone has a stake in the success of the Longevity Revolution. It may be true that the only things we can count on in life are death and taxes. But just as certain is aging, and the later years will be the biggest chunk of everyone's life.
We can choose to ignore or dismiss the challenges of an aging society – as we've done for the last few decades – but the issues will not ignore us. They are real and will cascade down on us with great force if we allow the current arithmetic to control our destiny. We can change our destiny by adding values that alter the sum.
The question is: Are we up to the task? [rc]
Professor Emeritus at the City University of New York,
where he taught developmental psychology
and directed a graduate program in Gerontology.
His latest book is "Escape Your Own Prison:
Why we Need Spirituality and Psychology to be Truly Free,"
Rowman and Littlefield.
Related links for facts and citations:
> Age Wave: http://www.agewave.com/
> As the 2010 census is about to show (elderly percentage will be higher than last census: http://www.censusscope.org/us/chart_age.html
> The United Nations forecasts: http://www.un.org/esa/population/publications/WPA2009/WPA2009_WorkingPaper.pdf
> Less than four workers going to less than two: http://www.efficientfrontier.com/ef/103/hell4.htm
> Fertility rates as of 2008: http://www.nationmaster.com/graph/peo_tot_fer_rat-people-total-fertility-rate
> Birth rate for non-Hispanic white population
> Falling birth rates in Japan: http://www.ilcusa.org/media/pdfs/aginginjapan.pdf
> Fertility in Italy: http://www.overpopulation.org/older.html
> Mohammed most popular name for newborn boys in London: The Telegraph
> UN says Europe will need immigrants: http://www.overpopulation.org/older.html
> Health care cost: http://www.kff.org/insurance/upload/7692_02.pdf
> Smoking stats: http://www.americanheart.org/presenter.jhtml?identifier=4559
> Rostenkowski factor
> Volunteers in Medicine: http://www.volunteersinmedicine.org/
> Senior Corps
> Dr. Ernst Katz:
> Merrill Lynch New Retirement Survey
> Film "To Age or Not to Age"
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