There was a good article on the New York Times a few days ago about the growing demographic divide between the US and Europe:
BAD FÜSSING, Germany, June 25 — This spa town in the Bavarian countryside, blessed with natural hot springs with reportedly curative powers, does not resemble Fort Lauderdale or Miami Beach, but it is the rough German equivalent, the place where retirees go for their comfort and well-being.
But if Bad Füssing is small compared with senior citizens' centers in the United States, it nonetheless represents a big part of the future in Germany and elsewhere in Europe, where a population that is both living longer and producing fewer children is beginning to change some of the fundamentals of both social and political life.
The changing demographic picture has produced political uncertainty and crowds of angry demonstrators in European countries whose governments, reacting to the shift from youth to the aged, are moving to reduce social services, including the pensions that millions have been counting on for their golden years.
"We've only seen the beginning of that," said Wolfgang Lutz, a demographer at the Austrian Academy of Sciences who projects a steep upward curve in the average age of Europeans in the years ahead.
But while pension reform is the urgent political issue of the moment in Germany, Austria, France and other countries, many experts see it as a harbinger of things to come, a sign of a demographic shift with important implications not only for the welfare of retirees but also for European societies as a whole. The crucial factor is age.
One study by William Frey, a demographer at the Brookings Institution in Washington, predicts that the median age in the United States in 2050 will be 35.4, only a very slight increase from what it is now. In Europe, by contrast, it is expected to rise to 52.3 from 37.7.
The likely meaning of this "stunning difference," as the British weekly The Economist called the growing demographic disparity between Europe and the United States, is that American power — economic and military — will continue to grow relative to Europe's, which will also decline in comparison with other parts of the world like China, India and Latin America.
With its population not only aging but shrinking as well, Europe seems to face two broad possibilities: either it will have to make up the population shortfall by substantial increases in immigration, which would almost surely create new political tensions in countries where anti-immigrant parties have gained strength in recent years, or it will have to accept being older and smaller and therefore, as some have been warning, less influential in world affairs.
"The European countries are aging in a world that is becoming younger," Mr. Frey said in a telephone interview. "And in a global economy, they're not going to share in the energy and vitality that comes with a younger population."
Mr. Lutz, who with Brian C. O'Neill and Sergei Scherbov wrote an article on the subject in Science, agrees that the crucial issue is less a smaller population than an older one.
"There is a fear that just as the world is entering its most competitive stage ever, Europe will be less competitive vis-à-vis the United States and the Asian economies, which are much younger and are benefiting from what you might call a demographic window of opportunity," he said.
The first effect of this has taken the form of efforts by European governments both of the left and of the right to trim the pay-as-you-go pension system, under which the taxes paid by current workers are used to pay the pensions of current retirees. This has produced angry protests. In Austria, which has one of the most generous social welfare systems, workers have staged the first general strikes in that country since the end of World War II. In France, there has been a series of national one-day work stoppages as the conservative government has put forward a proposal that would require workers to stay on the job several more years than at present to be eligible for pensions, which would be smaller.
But some experts are convinced that the reform efforts being proposed, difficult and controversial as they are, will prove inadequate to cope with an aging population.
"In reality, a legal retirement age of 80 is what we should aim at," Erich Streissler, an Austrian economist, wrote in a newspaper article.
Mr. Streissler's basic argument is one that applies to most of the countries of the European Union: people are retiring well before the official retirement age of 60 to 65, depending on the country.
Across Europe, only 39 percent of men age 55 to 65 still work, according to the Organization for Economic Cooperation and Development.
This means, given the historically low birthrates of "old" Europe, that a decreasing number of young people are paying into pension systems that have to support a larger number of people who, on average, will be in retirement for almost as many years as they worked to earn their pensions in the first place.
Or, as Mr. Streissler put it about his own country, the system works "to give every Austrian the right to retire in midlife with what is internationally a particularly high pension, so that he can waste an ever increasing portion of his lengthening life expectancy in unemployment."
Here in Bad Füssing, the population trends in Germany are easy to see. Forty years ago, when this village decided to turn itself into a holiday resort, the local population was a grand total of 38, according to Rudolf Weinberger, the spa's director. Now, Mr. Weinberger says, Bad Füssing is the biggest spa in Europe, with 250,000 guests coming each year and a permanent population of 6,400, including 2,400 retirees.
Two other spas in addition to Bad Füssing have sprung up in this area not far from the Austrian border, along with four- and five-story chaletlike hotels, guesthouses, restaurants and shops.
"It's a good life in Germany as a retired person," Günther Burhenne, 67, said, immersed in an indoor pool at one of Bad Füssing's three elaborate hot-spring bathing complexes. Behind him was a gaudy mosaic of fish and sea anemones. Outside, a crowd did calisthenics while standing waist deep in sulfuric water.
There are many people here like Mr. Burhenne, who had a 34-year career in the German Army, and then worked briefly as a real estate agent before he retired. The guests at Bad Füssing seem far from old and decrepit. They are just a bit beyond middle age and are still vigorous enough to play 18 holes at one of the eight golf courses built near here in the last two decades.
But that is the point about Germany, which, like Austria, is at the leading edge of European population change with its anxieties about the future. People like Mr. Burhenne can enjoy their retirement, but some people here see the national debate about what is called pension reform as a dark cloud on the horizon.
"It will definitely get harder because there are not enough jobs," said Helga Schimpfhauser, 63, reclining on a chaise longue in another part of the spa. "They talk about raising the retirement age, but nobody will hire you after 50 anyway."
Lounging with his wife nearby, a man who would give his name only as Reinhardt was fuming because the spa refused to accept his state health insurance this year and he had to pay the $8 daily entrance fee out of his own pocket. He had not been told that most health insurance programs in Germany removed spa treatments as an automatic benefit last year, though if doctors prescribe such treatment a person is still covered for one visit every three years.
For European governments, there is no alternative to reform, which means lower benefits and higher retirement ages. Austria, despite the labor walkouts, has passed legislation cutting benefits by 10 percent and gradually raising the retirement age to 65 from 60. Similar legislation seems almost certain in France and here in Germany, which has one of Europe's lowest birthrates.
Indeed, Germany's Ministry for Family Affairs, Senior Citizens, Women and Youth has compiled figures showing just how much the population is changing. The fertility rate itself is 1.34 children per woman, well below the rate of 2.1 said to be needed to maintain a stable population.
The reasons given for this apply throughout the industrialized world: people in highly developed, prosperous societies tend to have fewer children; women postpone childbearing to pursue careers, or forgo having children altogether.
In Germany, among women born in 1950, 14.9 percent of west Germans and 8 percent of east Germans are childless. By comparison, of women born in West Germany in 1965, 31.2 percent are childless along with 26.4 percent of women born in East Germany.
Even more striking are the differences by social strata. Fully 39 percent of the most educated German women are childless, the government's statistics show, compared with under 25 percent for women with less education.
"The more money you make, the greater is the opportunity cost for having children," said Bernd Raffelhüschen, a member of a German governmental commission studying pension reform.
Projecting the population into the future is difficult because nobody can be sure that the birthrate will not begin to increase, as it has, for example, in recent years in France. Indeed, a higher birthrate, combined with immigration, could significantly halt the trend toward an older and a smaller European population.
Mr. Lutz and his colleagues estimate that one million immigrants a year into Europe would be the same as women having on average one more child. But one million immigrants a year would mean 50 million by 2050, and that alone would be a demographic shift that many Europeans find culturally and politically unacceptable.
In Germany, all government projections show a downward population trend, even after factoring in a high number of immigrants.
But more important in Germany, as in the rest of Europe, is the rapid growth in the numbers of the elderly. In 1950, 30 percent of the German population was under 20 and only about 2 percent was over 80. By 2050, under-20's are expected to be only 16 percent, while the over-80's are estimated to reach about 12 percent.
The consequences of this shift are already striking, Mr. Raffelhüschen said. "At the moment, we really have two working people and one retired person," he said. "In 2035 or so, every worker will support one retired person."
The solution being recommended by the pension reform commission is to reduce the pension amount from 70 percent of the average national salary to less than 60 percent.
That is a large drop in a country where 80 percent of pension income comes from the state, but few experts see any hope that this reduction can be avoided.
This is because even if there were to be a sudden increase in the fertility rate, it would take a generation for the additional people being born to enter the work force.
"The only thing that can help a little bit," Mr. Raffelhüschen said, "is age-specific immigration, people 20 or 30 or so, because they would substitute for those who are not being born."
nytimes.com
Also check out this article from last year in the Economist:
FORGET transatlantic rifts about trade, Iraq, Kyoto, or the International Criminal Court. These have been thoroughly ventilated. One area of difference has not got the attention it deserves: demography. It may prove the most important of all.
For 50 years, America and the nations of Western Europe have been lumped together as rich countries, sharing the same basic demographic features: stable populations, low and declining fertility, increasing numbers of old people. For much of that period, this was true. But in the 1980s, the two sides began to diverge. The effect was muted at first, because demographic change is slow. But it is also remorseless, and is now beginning to show up.
America's census in 2000 contained a shock. The population turned out to be rising faster than anyone had expected when the 1990 census was taken. There are disputes about exactly why this was (more on that shortly). What is not in doubt is that a gap is beginning to open with Europe. America's fertility rate is rising. Europe's is falling. America's immigration outstrips Europe's and its immigrant population is reproducing faster than native-born Americans. America's population will soon be getting younger. Europe's is ageing.
By 2040, perhaps earlier, America will overtake Europe in population
Unless things change substantially, these trends will accelerate over coming decades, driving the two sides of the Atlantic farther apart. By 2040, and possibly earlier, America will overtake Europe in population and will come to look remarkably (and, in many ways, worryingly) different from the Old World.
Continued at:
economist.com |
