Needed but unwanted

THE NEW DEMOGRAPHICS

Part 1. How to live with an ageing population

By 2030, people over 65 in Germany, the world's third-largest economy, will account for almost half the adult population, compared with one-fifth now. And unless the country's birth rate recovers from its present low of 1.3 per woman, over the same period its population of under-35s will shrink about twice as fast as the older population will grow. The net result will be that the total population, now 82 m, will decline to 70-73 m. The number of people of working age will fall by a full quarter, from 40 m today to 30 m.

The German demographics are far from exceptional. In Japan, the world's second-largest economy, the population will peak in 2005, at around 125 m. By 2050, according to the more pessimistic government forecasts, the population will have shrunk to around 95 m. Long before that, around 2030, the share of the over-65s in the adult population will have grown to about half. And the birth rate in Japan, as in Germany, is down to 1.3 per woman.

The figures are pretty much the same for most other developed countries - Italy, France, Spain, Portugal, the Netherlands, Sweden - and for a good many emerging ones, especially China. In some regions, such as central Italy, southern France or southern Spain, birth rates are even lower than in Germany or Japan.

Life expectancy - and with it the number of older people - has been going up steadily for 300 years. But the decline in the number of young people is something new. The only developed country that has so far avoided this fate is America. But even there the birth rate is well below replacement level, and the proportion of older people in the adult population will rise steeply in the next 30 years.

All this means that winning the support of older people will become a political imperative in every developed country. Pensions have already become a regular election issue. There is also a growing debate about the desirability of immigration to maintain the population and workforce. Together these two issues are transforming the political landscape in every developed country.

By 2030 at the latest, the age at which full retirement benefits start will have risen to the mid-70s in all developed countries, and benefits for healthy pensioners will be substantially lower than they are today. Indeed, fixed retirement ages for people in reasonable physical and mental condition may have been abolished to prevent the pensions burden on the working population from becoming unbearable.

Already young and middle-aged people at work suspect that there will not be enough pension money to go round when they themselves reach traditional retirement age. But politicians everywhere continue to pretend that they can save the current pensions system.

Needed but unwanted

Immigration is certain to be an even hotter issue. The respected DIW research institute in Berlin estimates that by 2020 Germany will have to import 1 m immigrants of working age each year simply to maintain its workforce. Other rich European countries are in the same boat. And in Japan there is talk of admitting 500,000 Koreans each year - and sending them home five years later. For all big countries but America, immigration on such a scale is unprecedented.

The political implications are already being felt. In 1999 fellow Europeans were shocked by the electoral success in Austria of a xenophobic right-wing party whose main plank is "no immigration". Similar movements are growing in Flemish-speaking Belgium, in traditionally liberal Denmark and in northern Italy. Even in America, immigration is upsetting long-established political alignments. American trade unions' opposition to large-scale immigration has put them in the anti-globalisation camp that organised violent protests during the Seattle meeting of the world Trade organisation in 1999. A future Democratic candidate for the American presidency may have to choose between getting the union vote by opposing immigration, or getting the vote of Latinos and other newcomers by supporting it. Equally, a future Republican candidate may have to choose between the support of business, which is clamouring for workers, and the vote of a white middle class that increasingly opposes immigration.

Even so, America's experience of immigration should give it a lead in the developed world for several decades to come. Since the 1970s it has been admitting large numbers of immigrants, either legally or illegally. Most immigrants are young, and the birth rates of first-generation immigrant women tend to be higher than those of their adopted country. This means that for the next 30 or 40 years America's population will continue to grow, albeit slowly, whereas in some other developed countries it will fall.

Date: 2016-01-14; view: 520