The bottom line is that society is heading for some major challenges which few policymakers are brave enough to address because they are far too focussed on short-term issues.
This article will examine the “new frontier” and then examine three security implications: the cost of paying for older people, the tensions arising from pension / superannuation adequacy, and labour shortages. This article is encouragement to think about the unthinkable.
The Three Components of the New Frontier
First: there has been an increase in life expectancy. We have gained as much life expectancy in the last century as in the previous 5,000 years; this an increase of about 25 years. About 5,100 years ago, people lived on average for 25 years. In 1900 the figure had crept up to 50. Therefore giving people in western countries an old age pension was not a big burden on government because most people never lived long enough to collect it. Now life expectancy is around at least 75 years and there are concerns about the sustainability of pension schemes.
This change can be seen in the various phases of aging. Traditionally a person had three stages: young, middle aged and then getting to ready to die. Now there are four stages: (i) childhood (ii) maturity (iii) well aged (the new “third age” with perhaps one third of a life spent in retirement) and (iv) the compression of morbidity (whereby a person’s body declines quickly). Never before has any society had so many older people; there are no precedents to guide us. The first Australian to live to 120 is already alive and she is probably currently in her 60s (unfortunately we do not know who she is and so we cannot warn her)…Click here to read full article.