The World in 2050: Four Forces Shaping Civilization's Northern Future (7 page)

I See Old People

These megatrends have personal consequences. Honestly, for the long haul, I’ve begun socking away shares of pharmaceutical company stock. Because beginning right about now, the world is starting to fill up with old people.

Demography just might be the most fascinating academic subject you’ve never studied. Underneath its dull name and dry statistics lie gripping stories of sex and death, of the rise and fall of communities, of why migrants choose to pick up and move, of the futures for our retirements and for our children. It uncovers big surprises like the myth of the American melting pot.
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Although combing through census and national registry databanks on numbers of births, deaths, and marriages may not sound very fun, a new world is revealed. These data comprise a road map of our future still wired into today.

Consider the “baby boomer” phenomenon—that is, the post-World War II baby boom. Like a snake swallowing a big meal, this age bulge has worked its way through the decades, triggering all manner of economic and cultural transformations along the way. Many of them—like demand for doctors, vacation getaways, and Viagra as the boomers now enter their sixties—have been anticipated for years. Like all baby booms, it had a softer “baby echo” that cropped up a generation later—again, predictable.

“Population momentum” is another example of how demographic futures can be foreseen. Even if a society’s average fertility rate
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suddenly falls, its population will continue to grow twenty years later owing to the abundance of new parents carried forward from when fertility rates were high.
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This works in the other direction, too, meaning that elderly countries will keep shrinking even if fertility rises, owing to a small cohort of parents born when fertility rates were still low.

The unprecedented explosion of people on Earth happened because births began outnumbering deaths, but there’s more to it than that. The “Demographic Transition” concept described in Chapter 1 emerged from what transpired in Europe and the United States. And it appears to now be unfolding in the rest of the world as well. Recall that the Demographic Transition has four stages:

1. High and similar rates of birth and death (e.g., the preindustrial era, with a small and relatively stable total human population); followed by

2. Falling deaths but not births (initiating a population explosion); followed by

3. Falling births (still exploding, but decelerating); and finally

4. Low and similar rates of birth and death (population stabilization at a new, higher total number).

Most OECD countries have now passed through these stages and—except for those allowing high levels of immigration like the United States—have stabilizing or even falling populations. Most developing nations, however, are still in Stage 2 or early Stage 3. Thus, our run-up in global population is still under way.

Once a population enters Stage 3 its net rate of growth starts to slow, and this has generally been happening, beginning at different times and to varying degrees, for most of the world. On average, growth rates in developing countries have decreased from around +2.3% per year in 1950 to +1.8% in 2007. Expressed as “doubling times” (the number of years needed for a population to double), that means we have slowed from doubling our developing world population about every thirty years in 1950 to every forty years in 2007.

As we saw in Chapter 1, urbanization, modernization, and the empowerment of women push fertility rates downward, thus ushering in the final stage of the Demographic Transition. Put another way, the urbanization of society—if also associated with modernization and women’s rights—helps slow the rate of growth. There are, of course, exceptions to this tendency, but as these phenomena continue to expand throughout the developing world, the global population explosion so feared by Thomas Malthus and Paul Ehrlich is expected to decelerate. Already, in late-stage, low-immigration developed countries like Japan and Italy, and in regions like Eastern Europe, populations have not only stabilized but are falling. Assuming that fertility rates continue to drop as they are now, we are heading toward a total world population of around 9.2 billion in 2050, at which point we will still be growing but about half as fast as we are today.
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One of the most profound long-term effects of women having fewer babies is to skew societal age structures toward the elderly (the pulse of babies from population momentum is only temporary). That is precisely what has now begun, in varying stages, all around the world (improving health care, of course, also extends our life spans, thus increasing the proportion of elderly even more). Demographers agree that we are racing forward to not only a more urban world, but a grayer one. This, too, is unprecedented in the history of humankind. For 99.9% of the time we humans have existed on Earth, our average life expectancy was 30 years or less. Archaeologists have never dug up the prehistoric remains of anyone over 50.
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This aging will hit some places faster and harder than others. With a median age of 44.6 years
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Japan is the world’s most elderly country today. In contrast, the median age in Pakistan is just 22.1 years, almost half that of Japan. Pakistan is youthful; Japan is full of geezers. But both places will become grayer during the next forty years. By 2050 the median Pakistani age will rise twelve years to 34. Japan’s will rise another decade to 55.

When I was young I remember seeing magazine advertisements targeting people who planned to retire at 55. In forty years fully half of all Japanese will be at least that old. On the following page, a table shows how the graying trend will transpire for a few other countries over the next forty years.
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As seen plainly on this table from just sixteen examples, there are large age contrasts around the world today and even larger ones emerging in the future. Korea, Russia, and China will join Japan as the world’s great geriatric nations. Mexicans will be older than Americans. Median ages will be higher everywhere, but Korea, Vietnam, Mexico, and Iran will age radically, by fifteen years or more. Only our poorest, least-developed countries—like Afghanistan, Somalia, and the Democratic Republic of Congo—will still have youthful populations in 2050; and even they will be somewhat older than today.

This patchwork of wildly contrasting age patterns around the globe is especially driven by the timing of fertility transitions—when the baby booms and echoes happened, and most importantly, when fertility rates first began to fall.
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In many OECD countries this began in the late 1950s, so the graying process is nearing its end. Median ages have already become quite high today and by 2050 will average only six years older. The same process

Some World Aging Patterns by 2050

(median age, in years)

(
Source:
United Nations Population Division)

is now under way in developing countries, where fertility drops beginning in the 1960s, 1970s, and 1980s will unleash successive waves of aging over the planet for the next forty years.

In his 1982 film
Blade Runner,
director Ridley Scott imagined that my home city of Los Angeles would be filled up with Japanese people by the year 2019. In light of Japan’s economic might at the time, it’s not hard to see where the idea came from. But Mr. Scott should have consulted a demographer, because I just don’t see where all those Japanese settlers will come from. Over the next forty years, Japan is going to lose about 20% of her population.

Is an elderly population a good thing or bad? Clearly, there are some benefits: perhaps a wiser, less violent society, for example. But it also strains health care systems,
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and from an economic perspective it absolutely raises the burden on younger workers. Economists stare hard at something called the “elderly dependency ratio,” usually calculated as the percentage of people aged sixty-five or older relative to those of “working age,” between fifteen and sixty-four.
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By the year 2050, elderly dependency ratios will be higher all around the world. Some places, like Korea, Spain, and Italy, will have elderly dependency ratios exceeding 60%. That’s barely sixteen people of working age for every ten elders. Japan, with a dependency ratio of 74%, will have only thirteen.

Elsewhere, the overall dependency ratio will be lower but the transition shock greater. Relative to 2010, dependency ratios will more than quadruple in Iran, Singapore, and Korea. They will more than triple in China, Mexico, Brazil, Cuba, Turkey, Algeria, Thailand, Vietnam, Indonesia, and Saudi Arabia. Many of these places today have large youthful workforces that attract global business in its tireless search for labor. But by 2050, the United States may find itself in the unfamiliar position of being unable to find enough migrant farm laborers from Mexico’s aging workforce.

Clearly, the whole concept of “retirement” is about to undergo a major overhaul. People will have to work later in life, at least part-time, and perhaps as long as they are able. This is not necessarily a bad thing, as there is some evidence that most people are actually happier with a phased retirement
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just so long as they perceive a sense of choice in the matter.
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On the other hand, a “gray crime wave” has now begun in Japan: Arrests of struggling pensioners over age sixty-five has doubled—mostly for shoplifting and pickpocketing—and the number incarcerated has tripled to over 10% of Japan’s prison population.
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It is also apparent that some big cultural shifts will be needed in the way we treat and value our elderly. “Our society must learn that ageing and youth should be valued equally,” writes Leonard Hayflick of the UCSF School of Medicine, “if for no other reason than the youth in developed countries have an excellent chance of experiencing the phenomenon that they may now hold in such low esteem.”
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Another thing about to undergo a major overhaul is how the countries treat and value foreign immigrants. As the world grays, skilled young people will become an increasingly coveted resource, both for direct immigration and for globalized labor pools abroad. This creates the opportunity for new economic tigers to emerge when today’s “youth bulges” mature into “worker bulges” in Turkey, Lebanon, Iran, Morocco, Algeria, Tunisia, Colombia, Costa Rica, Chile, Vietnam, Indonesia, and Malaysia—countries offering a reasonably educated workforce and business-friendly environment.
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A graying world also bodes well for women’s employment in places that currently discourage it, because allowing women into the labor pool is the quickest and easiest way to double it. Countries where women don’t work for religious and/or cultural reasons will experience an increasingly powerful economic incentive to abandon that tradition by 2050.

The following point will become particularly important later in this book. In an aging world, those countries best able to attract skilled foreign workers will fare best. The early signs of a migrant planet are already here. In 2008, some two hundred million people—3% of the world population—were living outside their native countries. In most OECD countries the proportion of foreign-born was over 10%, even in countries like Greece and Ireland, where emigrants used to flow out, not in.
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Foreign workers benefit their homelands as well as host economies: The World Bank estimates overseas remittances to poor countries was USD $283 billion in 2008, constituting a huge share of GDP in countries like Tajikistan (46%), Moldova (38%), and Lebanon (24%).

What about in 2050, when the nursing homes in Mexico, China, and Iran are packed full? Who will be running the computers and caring for the residents? Unless the entire world has entered a full-blown robotic age by then, we will still need young people around to do things. Where on Earth will they come from?

This is harder to project demographically, because those young people haven’t been born yet. But based on current population structures, the most youthful countries in 2050 will be the same ones where fertility rates are highest today—in the world’s least modernized places. Somalia, Afghanistan, Yemen, the West Bank and Gaza, Ethiopia, and much of sub-Saharan Africa will offer our world’s youth in 2050.

It’s a critical but open question whether our poorest countries can convert their forthcoming demographic advantages into the new skilled workforces needed to help care for an elderly world. Just having a bunch of young people running around is not enough. Huge improvements in education, governance, and security are also required. Women will have to start attending school and working in places where this is uncommon today. Terrorism must be sufficiently quelled such that the countries that need young workers will accept immigrants from the countries that have them. I hope that these things can be achieved, and a global skilled-worker program all worked out, by 2050. I’ll be eighty-two years old—and I just can’t imagine anything lonelier than being turned over in my bed by a robot.