Dean Baker | Time to Retire Fears over Aging Populations

[eridani]

http://www.nationofchange.org/time-retire-fears-over-aging-populations-1391093747

The D.C. fearmongers point to projections showing the number of workers per Social Security beneficiary falling from 2.8 his year to just 2.1 in 2035. But this prospect looks considerably less scary when we consider that the number of workers per beneficiary was 5.1 back in 1960. We have seen this number cut almost in half over the last five decades, yet both workers and retirees have seen substantial increases in their standard of living.

We should expect this to continue to be the case. Even if productivity grows at only a 1.5 percent annual rate, the same rate as in the productivity slowdown from 1973 to 1995, output per hour will still be almost 40 percent higher in 2035 than it is today. If productivity grows at the same 2.5 percent rate it sustained from 1995 to 2007, output per hour will be almost 70 percent higher than it is today.

While economists’ track records in predicting productivity growth have been abysmal, the talk of robots displacing massive numbers of workers implies productivity growth that is even more rapid than this 2.5 percent rate. In that case, we will have no problem whatsoever supporting a far higher ratio of retirees to workers than will ever exist in the world. Our problem will be finding work for people to do, since the robots will be doing all the work for us.

<snip>

There are in fact real threats to the living standards of our children and grandchildren. At the top of this list is inequality. If the pattern of income growth we have seen over the last three decades continues, with most of the gains going to the richest 1 percent, then most of our children will not fare well. Global warming also poses enormous threats to living standards, as a changing climate will make many areas uninhabitable and possibly lead to severe shortages of food and water in many parts of the world.

[El_Johns]

1. kr

[FarCenter]

2. Although Japan has a growing senior population and stagnant GDP, GDP per capita is increasing

The GDP per capita is increasing as the population declines.

[eridani]

3. Japan is a bunch of islands, so that's what you would expect

Most developed countries will have a temporary surplus of old people until population gets stabilized at the one in one out level.