As many already know, Japan has the largest population of people over 65 in the world at 25 percent in 2013. Since the Japanese are known for their longevity, this number may seem like an isolated phenomenon but the rest of the world is catching up. Almost every major country went through a birthing boom after World War II and people are starting to wonder how they are going to take care of the large number of elderly citizens. Italy already has a 65 and over population at 21 percent and by 2050, Americans aged 65 and above are expected to make up at least 21 percent of the population. As soon as 2025, the U.S. spending on Medicare, Social Security, and Medicaid is projected to double, which means there will be yet more strain on state and federal budgets.
If that is not food for thought, birth rates in Japan are at an all-time low. With decreased birth rates, there will be a hole in the future workforce when it comes time to take care of the elderly. Japan owns the second largest amount of U.S. debt, and with two economies so intimately connected, both can decline at the same time. The Japanese media has begun dubbing the citizenry’s lack of interest in the opposite sex as “celibacy syndrome.” While choosing a lifestyle outside of traditional marriage is a personal decision, so many people making this choice will eventually cause an economic downturn when it comes to needing resources for the elderly. Fewer babies were born in 2012 than any other year on Japanese record and not so funnily, adult diapers outsold baby diapers.
In Italy, there is a similar picture, not in terms of birth rates, but in terms of young adult employment. Unemployment is at a staggering 44.2 percent for people ages 15 to 24. An alarming statistic by itself, it is compounded by the fact that Italian pensions take up 15.6 percent of the country’s Gross Domestic Product. This rate is the highest in all of Europe and with jobs so scarce, young Italians are either moving abroad with their college degrees or have given up the job search entirely. Even those who are lucky enough to find jobs are not faring much better. The average salary for a person born post-1980s is a mere $1,375 a month, making it nearly impossible to afford home payments, car payments, and child payments. In addition, people are living in their parents’ homes longer and using their parents’ money as well. This postpones starting a family of one’s own and prevents the older generation from saving for retirement. With smaller retirement savings, older people are staying in jobs longer.
The only economies with less growth than Italy’s since 2001 are Haiti and Zimbabwe. Italy has the oldest working population out of any European nation and when that population retires, it puts enormous strain on the government because their tax base is exceedingly diminished with so many young people unemployed.
*This article was previously published in 2015
Jacob Edward is the Manager of Prime Medical Alert and Senior Planning in Phoenix, Arizona, USA. Jacob founded both companies in 2007 and has helped many Arizona seniors and their families navigate the process of long-term care planning. Senior Planning provides assistance to seniors and people with disabilities in finding and arranging assisted living in Phoenix, as well as applying for state and federal benefits.