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Without future immigrants, working-age population in the U.S. would decrease
By admin July 5, 2018

Though the world has enjoyed unprecedented economic prosperity, there are looming problems that may hinder further innovation and growth in the future. Especially worrisome is the aging population problem. According to the World Health Organization (WHO), the proportion of a society’s population that is comprised of persons aged 65 or older is called the “aging rate.” If a society’s aging rate exceeds 7%, it is called an “aging society.” If the rate surpasses 14%, it is called an “aged society”; if over 21%, it is called a “super-aged society.”

Japan, a country known for having a high proportion of aging people, has already surpassed 26% of the total population. This means 3 out of 10 Japanese people are over 65 years old. Remarkable improvements in medical technology have made it possible for the average life expectancy to reach over 83 years old in Japan. This older population demographic is not vigorously consuming nor producing goods and services which is doing little to boost economic growth in the country. Instead of investing in innovation which entails a risk of financial loss by its nature, older people tend to be more interested in achieving financial stability for their rest of life.

Aging societies and accompanying issues are affecting even the largest of economies. The United States will reach the super-aged society by 2030 as well. Despite being a highly developed country, the U.S. has enjoyed a slower rate of aging population increase due to the immigrants coming to the country. Now, the American baby boom generation is reaching retirement age, creating a massive spectrum shift in the U.S. population proportion. Not only does this means less working aged people to actively produce goods and services, the demographic shift will necessitate more healthcare spending in the near future. With aged population growth in the U.S., healthcare spending will reach close to 20% by 2025. The United States is already spending 18% of GDP to healthcare, which is 6 times as much as the U.S. spends on military expenditure by comparison. As a result of increased healthcare needs, it is fair to assume that even fewer resources will be allocated to innovation and economic growth as America transitions to accommodate its growing aging population.

 

Further Reading

Japan’s population problem

See the ‘super-aged’ nations

Healthcare spending to reach 19.7% of GDP within a decade

Immigration projected to drive growth in U.S. working-age population through at least 2035


Thanks for sharing !


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