What Is The Impact Of Aging On The Economy
The Aging and its Impact on the Economy
SOC 304
Social Gerontology
December 01, 2014
The Aging and Its Impact on the Economy
The aging population has and continues to have a profound impact on the economic stance and demographic transition within the United States that affects individuals, families, Social Security funding and availability, employment and the retirement age limitation. As the baby boomer generation begins to age the demographic consistency of the population will change and there will be more in the aged population than the younger population.
The United States aging population has advanced at a startling rate, thereby propagating a different category of demographic transition. This dissimilar group of demographic …show more content…
transition focuses on the proliferation in life expectancies after age sixty-five (Eggleston and Fuchs, 2012). The baby boomer generation and the current aging population are employing selective optimization with compensation, which has allowed them to live longer lives with and without health issues. This facet modifies the configuration of the demographic transition within the United States. According to Galor, 2012, the demographic transition increase is based on the study that proposes the fertility rate decline and modern growth increased the demand for human capital in the industrial development process. Galor, 2012, suggests the demographic transition changes occurred in three processes enhancing labor productivity and growth. The first process was a reduction in population growth, thereby increasing per capita resources. The second process was the reallocation of resources due to reduced fertility rates, which enhanced production of quality human capital. The third process affecting the demographic transition was the distribution of the aging population, momentarily enlarging the labor force, therefore unconsciously aggregating productivity (Galor, 2012).
The consideration of demographic transition theory is an important aspect for sociologists, psychologists, individuals and families to understand in determining its impact on America. Understanding and developing measures that address the specific needs of the growing aging population is vital for the continuation of successful and healthy aging within society.
Many sociologists and population theorists utilize the demographic transition theory to predict the population aging trends, its causes and consequences on the economy and legislation. Additionally, the current trends in the demographic transition theory provide information on how the population is broken down, managing financially, and the outcome of the economy based on fluctuating tendencies. In relation to the United States, the global effect of the demographic transition theory determines policies and guidelines established within the United States.
The demographic transition theory influences how many businesses and employers determine their workforce. The composition of many employers favors the younger generation in lieu of the older population. Furthermore, some employers will utilize an actuarial table to predict the demographic transition of the workforce. As the aging population continues to work, collect and contribute to the social security fund. Policy makers will have to focus on the issues of the demographic transition in an effort to address the aging populations’ impact on society in general. Issues that will require attention are training, recruitment, retention and compensation for the workforce. The aging baby boomer generation will require the ability to live with dignity and independence. Additionally, this generation will require residential services, financial support, home care, specialized health care and informative social service support. Concerns for policy makers that will require attention are training, recruitment, retention and compensation for the professional and family caregivers. This effort ensures quality care is provided to the aging population. The demographic transition now transpiring has presented the United States with the unparalleled challenge of ensuring the aging population will be protected during retirement. As the retirement eligibility increases, so will the impact on the economic state of Social Security, Medicare, Medicaid and federally funded programs.
The availability of Social Security funding is a constant and continuous debate as to whether the fund can support those who, currently and in the future, depend on it. Social Security funding is currently slated to meet approximately seventy percent of the aging population’s needs for autonomous living. Many in the aging population rely solely on Social Security and other social insurance programs for survival. For some of the aging population the distribution of Social Security funds is not equal limiting individual purchasing power (Rother, 2014). Many people in the aging population are working longer and contributing more to Social Security. Some people are electing to delay the collection of Social Security funds to increase their purchasing power later. There are some individuals that have retired, but have opted not to collect their benefits until they are seventy years old. All of these measures are subjective to rising the entitlement age with Social Security.
The economic downfall and diminishing payroll tax contributions towards Social Security and Medicare are several matters compounding the stability of these programs.
Several options that could assist in replenishing these programs are increasing the benefit age and limiting benefits for the wealthy. Pursuant to Rother 2014, inadvertently society has allowed a gap to develop in the Social Security and Medicare system that augments economic segregation in communities. This fissure destabilizes the inclusiveness and cohesiveness of the community and creates a threat to the quality of life for many in the aged population (Rother, …show more content…
2014).
The aging populations of baby boomers that are fueling the demographic transition prefer to delay retirement due to better education and larger incomes. Furthermore, this aspect allows the ability to accrue additional benefits and retirement income ensuring economic stability. Many in the aging population are utilizing productive engagement through enhanced mental well-being, health, increased quality of life and successful aging (Thanakwang and Isaramalai, 2013).
Overall, the aging populations are living healthier, well-educated, diverse and active lives. The current older generations are continuing their education, traveling and participating in recreational activities. Various older adults continue employment either out of necessity or by choice in a part-time of full-time capacity. Additionally, this increase in the working population requires the modification of workplace procedures, training, and educational systems. Furthermore, government and legislative policies will be necessary to accommodate the aged employee.
There are a number of mechanisms that can contribute to the availability of Social Security funding. Many in the younger generation are finding it harder to obtain long term employment, thereby reducing contribution to Social Security. Furthermore, the increase of the aging population utilizing these funds is beginning to create a deficit for future generations.
The distribution of the Social Security fund requires revamping to ensure the current aging population and future generations have a fund to utilize. The reconfiguration of Social Security payments to individuals and contributions is necessary for the stability of the economy. Furthermore, the repayment of the treasury notes against the Social Security fund should be repaid immediately to ensure a deficit is not reached in the next couple of years. This will ensure a stable income for the aging population, therefore eliminating the burden on society.
The employment and retirement challenges many in the aged population face are age discrimination in employment and forced retirement. The aged population faces the inability to find new employment and downsizing of corporations in which many of the highest paid are the aged population. The aged population faces overt and covert discrimination at work, promotions and during interviews for new positions or employment. The U. S. Age Discrimination in Employment Act (ADEA) has provided statues, policies and resources to assist the aging population in defending their right to work (Cavico and Mujtaba, 2012). The option to retire now does not solely rely on an individual’s age, but several factors; such as economic stability, longevity and choice. This influx of the aging population delaying retirement is due in part to the elimination of the earnings tax in 2000, as well as, additional opportunities to work (Burkhauser, 2010).
The aging populations are now changing careers and following their life’s dream as a second career. The baby boomer generation is now opting for careers that focus on their particular age group in their second careers. The demographic shift currently occurring with the baby boomers is creating a wave of new fields and opportunities for workers of all ages. An increasing field of employment is health care workers that require nursing care facilities, residential care facilities and home centered care. Some of the possible positions for older adults transitioning to a second career are fitness coaches, financial planners and builders to modify homes for the aged. To adequately address the challenges the aging population faces in employment and retirement are stereotypes and discrimination practices, which must be eliminated.
Stereotypes depicted in television advertisements, and societal perceptions on aging have produced negative methodologies and attitudes towards seniors in every aspect of life. The older generation encounters discrimination, economic challenges, strained familial connections and stereotypical portrayals everywhere; home, work, hospitals, and retail establishments. Many advertising images provide younger viewers the impression that the elderly are suddenly incapable of being alone at home or unable to get help, perhaps for hours or even days. Age discrimination affects everyone regardless of age, ethnicity, race, religion, or color. Discrimination, although in limited cases can be allowed based on age. Age discrimination can be permitted in the area of a valid occupational qualification. In this instance the age of the person is directly related to the job in question. This relates to conditions where an individual who has not reached a certain age is not qualified to do that job. This is usually the case where the safety concern is of essence.
These negative stereotypes portray the elderly as vulnerable and burdens upon the family members and society as a whole. In addition the stereotyping affects the older generations’ self-esteem, which causes many to break or sever familial ties so they do not feel as a
burden.
Addressing discrimination the aging population faces will increase the contributions to Social Security and retirement income. Enforcing the age discrimination laws and statues would provide economic stability for the aged individual and society. Furthermore, the age discrimination laws permit individuals to age successfully, as well as, remain productive citizens.
Many in the older generation are now faced with the necessity of having to work to make ends meet. The current economic status has placed a strain on the limited income that Social Security provides. The increasing costs of medicines, everyday monthly bills; such as gas and electric, telephone, food, and heating costs are more than the average older adult receives in benefits from Social Security. Furthermore, the fear of the impending loss of financial status, independence, mental and physical capability, desirability, knowledge, status, and independence is overwhelming for many in the older generation. This is an additional factor in the aging population continuing to work after retiring.
Many in the aging population are valuable sources of information, knowledge and wisdom. Many individuals do not have the option of retiring due to family commitment and the current societal economic status. The aging population is now choosing to work longer to maintain productivity and longevity.
As the aging population reaches retirement age it creates space in the work force for younger workers to enter. However, as the aging population works longer it also eliminates space in the work force for the younger workers. If the retirement age is increased and the older work force works longer, where will there be room for the younger workers to enter the work force. The work place has to expand to accommodate the aging and younger workers to eliminate the creation of an imbalance. Society must expand and retrain the older work force to perform the demand of the new work force to accommodate all of the workers. In actuality the actual work force is getting smaller, and with the shift in the nature of the work, the older workers are being pushed out, by the nature of the demand of the work force.
Another challenge for businesses and government is the ability for the aging workforce to learn and implement new technology. The aging population has the ability to learn, but requires programs to be set in place that will train them to use the new electronics. This program will need to be offered to all employees, not just the older population, as you do not want to unintentionally discriminate against the younger employees. The program can be offered voluntarily and/or it could be an incentivized program that would give each person who passes the course a certificate and an increase in pay. The aging workforce should not be disqualified from working just because there is new technology that is being implemented every day. The aging workforce necessitates on the job training to acquaint themselves with the new software and equipment. Understanding how to work with the vast differences in generations is now a requirement for administrators. There are four different generations in the workforce today and the way they interact and perceive their lives and careers are vastly different. Not only will supervisors need to be able to accommodate the aging employees, but they will also need to understand the differences between the generations and equip them to work together to promote their strengths and to become a productive member of the group.
Aging is a part of life’s course and is an inevitable process. In particular, policy makers now have to face challenges in creating a system that will economically provide for the elderly people who keep growing in number, while at the same time sustain a strong economic growth in the face of aging population. The aging population’s political choice of the “pay-as-you-go (PAYG) social security system, incorporating the heterogeneity of individuals in their preference for having children, and hence the endogenous fertility choices of individuals, into a simple overlapping generations model.” The aging population also, could possibly result in an increased contribution rate, thereby, increasing the redistribution of benefits based on the contribution of the retiree. Additionally, as the contribution rate increases so does the number of children and future contributors to the Social Security system (Hirazawa, et al., 2010).
The increase in the aging population is occurring in almost every country around the globe and has become a global issue which has brought about much concern. Policy makers must confront the many problems which have arisen from our aging population. The current steps and plans undertaken by the government to rectify the situation are in need of serious revise and additional solutions in order to ease the pressures which have arisen.
The aging population has a huge impact on politics, economics, and health care. Many in the aged population are very active in the political arena and are more likely to vote than their younger counterparts. Additionally, the government is tackling a growing financial burden from pension costs, medical care, and possibly long-term care, implying either sharp increases in taxes or a reneging on the promised level of benefits. Pursuant to Rother, 2014, measures must be taken to assist society in associating and supporting social and environmental aspects to ensure a successful aging community is achieved. Furthermore, steps to ensure the aging community has economic stability to promote and continue their ability to live independently in society. Providing economic stability ensures voluntary support and care giving exemplifies genuine community support for everyone (Rother, 2014).
As the population ages the needs of older people will change. Providing the elderly their promised benefits will require large tax increases. The responsibility on the younger workforce will be substantial. The major government transfer programs such as Social Security, Medicare, and Medicaid disproportionately benefit the elderly, while expenditures on public education disproportionately benefit the young. With the trend of our population entering the older age group, even more funds will be allocated to the elderly. Through the younger generation being fewer in number, the government consumption in public education will be reduced, somewhat offsetting the rising expenses for the older age group. Awkwardly the decrease in the number of school age children will be much less than the increasing numbers of people reaching retirement age, so the transfer of funds may be insignificant.
Strategies to ensure the aging population is provided for must become the number one priority in the United States. One strategy is the increase of the retirement age from sixty-two to seventy, which would allow many productive aging adults the ability to continue to work.
Strategic plans should be developed by companies that utilize a structure that balances age, compensation and policies, which create the maximum outcome for their industry. The utilization of demographic transition models to determine the retirement, retention and hiring specification to properly distribute the structure of the company (Clark and Ghent, 2009). Moreover, government and businesses should employ recommendations, tactics and strategies that maintain and comply with age discrimination laws, employment practices, and lawsuits based on age discrimination. Strategies for enactment to prevent age discrimination are legislation for equal work and benefits, strict enforcement of the ADEA, and simplified procedures that can be followed by those who have been discriminated against. Furthermore, implementation of enforced accommodations for older employees at the work place (Cavico and Mujtaba, 2012).
Moreover, the replenishing of the Social Security fund through the repayment of the governmental notes placed against the fund would alleviate the decreasing fund. Additionally, placing a cap on the amount of Social Security an individual is allotted would increase the availability of funds. Another strategy is for government to increase resources and policies into research and development of healthcare services to sustain the mean age of the population. Government policies should be implemented to tackle the problems that arise from having an aging population. These actions, especially in the area of medicine, could lessen the impact of the aging population on the economy and make the aging process easier for the elderly.
In conclusion as the demographic transition of the aging population continues to increase the bearing impact on the availability and funding of Social Security, this has had an impact on individuals, businesses and the economy. Eventually, the Social Security deficits may be offset by the increased revenue towards benefits from productive younger and older workers. Governmental policies and strategies are necessary to reduce and monitor the increase in this demographic transition. The elimination of the retirement age restriction and implemented strategies to enhance employment opportunities and availability allows the aging populations to continue to be productive members of society and maintain self-sufficiency.
References
Burkhauser, R. (2010). Transforming social security for an aging society. Human Ecology, 38(2), 25. Retrieved from http://search.proquest.com/docview/859539505
Cavico, F. J., & Mujtaba, B. G. (2012). Discrimination and the aging American workforce: Legal analysis and management strategies. Journal of Legal Issues and Cases in Business, 1, 1-41. Retrieved from http://search.proquest.com/docview/1017672826
Clark, R. L., & Ghent, L. S. (2010). Strategic HR management with an aging workforce: Using demographic models to determine optimal employment policies. Population Research and Policy Review, 29(1), 65-80. doi:http://dx.doi.org/10.1007/s11113-009-9143-8
Eggleston, K. N., & Fuchs, V. R. (2012). The new demographic transition: Most gains in life expectancy now realized late in life. The Journal of Economic Perspectives, 26(3), 137-156. doi:http://dx.doi.org/10.1257/jep.26.3.137
Galor, O. (2012). The demographic transition: Causes and consequences. Cliometrica, 6(1), 1-28. doi:http://dx.doi.org/10.1007/s11698-011-0062-7
Markson, E. W. and Stein, P. J. (2012). Social Gerontology: Issues and Prospects San Diego, California. Bridgepoint Education Inc. Kindle Edition.
Radovic-Markovic, M. (2013). An aging workforce: Employment opportunities and obstacles. Cadum, 1(6), 142-155. Retrieved from http://search.proquest.com/docview/1399307112
References (continued)
Rother, J. (2014). Social insurance: A key support for viable aging communities. Generations, 37(4), 79-83. Retrieved from http://search.proquest.com/docview/1503769341
SOC 304
Social Gerontology
December 01, 2014
The Aging and Its Impact on the Economy
The aging population has and continues to have a profound impact on the economic stance and demographic transition within the United States that affects individuals, families, Social Security funding and availability, employment and the retirement age limitation. As the baby boomer generation begins to age the demographic consistency of the population will change and there will be more in the aged population than the younger population.
The United States aging population has advanced at a startling rate, thereby propagating a different category of demographic transition. This dissimilar group of demographic …show more content…
transition focuses on the proliferation in life expectancies after age sixty-five (Eggleston and Fuchs, 2012). The baby boomer generation and the current aging population are employing selective optimization with compensation, which has allowed them to live longer lives with and without health issues. This facet modifies the configuration of the demographic transition within the United States. According to Galor, 2012, the demographic transition increase is based on the study that proposes the fertility rate decline and modern growth increased the demand for human capital in the industrial development process. Galor, 2012, suggests the demographic transition changes occurred in three processes enhancing labor productivity and growth. The first process was a reduction in population growth, thereby increasing per capita resources. The second process was the reallocation of resources due to reduced fertility rates, which enhanced production of quality human capital. The third process affecting the demographic transition was the distribution of the aging population, momentarily enlarging the labor force, therefore unconsciously aggregating productivity (Galor, 2012).
The consideration of demographic transition theory is an important aspect for sociologists, psychologists, individuals and families to understand in determining its impact on America. Understanding and developing measures that address the specific needs of the growing aging population is vital for the continuation of successful and healthy aging within society.
Many sociologists and population theorists utilize the demographic transition theory to predict the population aging trends, its causes and consequences on the economy and legislation. Additionally, the current trends in the demographic transition theory provide information on how the population is broken down, managing financially, and the outcome of the economy based on fluctuating tendencies. In relation to the United States, the global effect of the demographic transition theory determines policies and guidelines established within the United States.
The demographic transition theory influences how many businesses and employers determine their workforce. The composition of many employers favors the younger generation in lieu of the older population. Furthermore, some employers will utilize an actuarial table to predict the demographic transition of the workforce. As the aging population continues to work, collect and contribute to the social security fund. Policy makers will have to focus on the issues of the demographic transition in an effort to address the aging populations’ impact on society in general. Issues that will require attention are training, recruitment, retention and compensation for the workforce. The aging baby boomer generation will require the ability to live with dignity and independence. Additionally, this generation will require residential services, financial support, home care, specialized health care and informative social service support. Concerns for policy makers that will require attention are training, recruitment, retention and compensation for the professional and family caregivers. This effort ensures quality care is provided to the aging population. The demographic transition now transpiring has presented the United States with the unparalleled challenge of ensuring the aging population will be protected during retirement. As the retirement eligibility increases, so will the impact on the economic state of Social Security, Medicare, Medicaid and federally funded programs.
The availability of Social Security funding is a constant and continuous debate as to whether the fund can support those who, currently and in the future, depend on it. Social Security funding is currently slated to meet approximately seventy percent of the aging population’s needs for autonomous living. Many in the aging population rely solely on Social Security and other social insurance programs for survival. For some of the aging population the distribution of Social Security funds is not equal limiting individual purchasing power (Rother, 2014). Many people in the aging population are working longer and contributing more to Social Security. Some people are electing to delay the collection of Social Security funds to increase their purchasing power later. There are some individuals that have retired, but have opted not to collect their benefits until they are seventy years old. All of these measures are subjective to rising the entitlement age with Social Security.
The economic downfall and diminishing payroll tax contributions towards Social Security and Medicare are several matters compounding the stability of these programs.
Several options that could assist in replenishing these programs are increasing the benefit age and limiting benefits for the wealthy. Pursuant to Rother 2014, inadvertently society has allowed a gap to develop in the Social Security and Medicare system that augments economic segregation in communities. This fissure destabilizes the inclusiveness and cohesiveness of the community and creates a threat to the quality of life for many in the aged population (Rother, …show more content…
2014).
The aging populations of baby boomers that are fueling the demographic transition prefer to delay retirement due to better education and larger incomes. Furthermore, this aspect allows the ability to accrue additional benefits and retirement income ensuring economic stability. Many in the aging population are utilizing productive engagement through enhanced mental well-being, health, increased quality of life and successful aging (Thanakwang and Isaramalai, 2013).
Overall, the aging populations are living healthier, well-educated, diverse and active lives. The current older generations are continuing their education, traveling and participating in recreational activities. Various older adults continue employment either out of necessity or by choice in a part-time of full-time capacity. Additionally, this increase in the working population requires the modification of workplace procedures, training, and educational systems. Furthermore, government and legislative policies will be necessary to accommodate the aged employee.
There are a number of mechanisms that can contribute to the availability of Social Security funding. Many in the younger generation are finding it harder to obtain long term employment, thereby reducing contribution to Social Security. Furthermore, the increase of the aging population utilizing these funds is beginning to create a deficit for future generations.
The distribution of the Social Security fund requires revamping to ensure the current aging population and future generations have a fund to utilize. The reconfiguration of Social Security payments to individuals and contributions is necessary for the stability of the economy. Furthermore, the repayment of the treasury notes against the Social Security fund should be repaid immediately to ensure a deficit is not reached in the next couple of years. This will ensure a stable income for the aging population, therefore eliminating the burden on society.
The employment and retirement challenges many in the aged population face are age discrimination in employment and forced retirement. The aged population faces the inability to find new employment and downsizing of corporations in which many of the highest paid are the aged population. The aged population faces overt and covert discrimination at work, promotions and during interviews for new positions or employment. The U. S. Age Discrimination in Employment Act (ADEA) has provided statues, policies and resources to assist the aging population in defending their right to work (Cavico and Mujtaba, 2012). The option to retire now does not solely rely on an individual’s age, but several factors; such as economic stability, longevity and choice. This influx of the aging population delaying retirement is due in part to the elimination of the earnings tax in 2000, as well as, additional opportunities to work (Burkhauser, 2010).
The aging populations are now changing careers and following their life’s dream as a second career. The baby boomer generation is now opting for careers that focus on their particular age group in their second careers. The demographic shift currently occurring with the baby boomers is creating a wave of new fields and opportunities for workers of all ages. An increasing field of employment is health care workers that require nursing care facilities, residential care facilities and home centered care. Some of the possible positions for older adults transitioning to a second career are fitness coaches, financial planners and builders to modify homes for the aged. To adequately address the challenges the aging population faces in employment and retirement are stereotypes and discrimination practices, which must be eliminated.
Stereotypes depicted in television advertisements, and societal perceptions on aging have produced negative methodologies and attitudes towards seniors in every aspect of life. The older generation encounters discrimination, economic challenges, strained familial connections and stereotypical portrayals everywhere; home, work, hospitals, and retail establishments. Many advertising images provide younger viewers the impression that the elderly are suddenly incapable of being alone at home or unable to get help, perhaps for hours or even days. Age discrimination affects everyone regardless of age, ethnicity, race, religion, or color. Discrimination, although in limited cases can be allowed based on age. Age discrimination can be permitted in the area of a valid occupational qualification. In this instance the age of the person is directly related to the job in question. This relates to conditions where an individual who has not reached a certain age is not qualified to do that job. This is usually the case where the safety concern is of essence.
These negative stereotypes portray the elderly as vulnerable and burdens upon the family members and society as a whole. In addition the stereotyping affects the older generations’ self-esteem, which causes many to break or sever familial ties so they do not feel as a
burden.
Addressing discrimination the aging population faces will increase the contributions to Social Security and retirement income. Enforcing the age discrimination laws and statues would provide economic stability for the aged individual and society. Furthermore, the age discrimination laws permit individuals to age successfully, as well as, remain productive citizens.
Many in the older generation are now faced with the necessity of having to work to make ends meet. The current economic status has placed a strain on the limited income that Social Security provides. The increasing costs of medicines, everyday monthly bills; such as gas and electric, telephone, food, and heating costs are more than the average older adult receives in benefits from Social Security. Furthermore, the fear of the impending loss of financial status, independence, mental and physical capability, desirability, knowledge, status, and independence is overwhelming for many in the older generation. This is an additional factor in the aging population continuing to work after retiring.
Many in the aging population are valuable sources of information, knowledge and wisdom. Many individuals do not have the option of retiring due to family commitment and the current societal economic status. The aging population is now choosing to work longer to maintain productivity and longevity.
As the aging population reaches retirement age it creates space in the work force for younger workers to enter. However, as the aging population works longer it also eliminates space in the work force for the younger workers. If the retirement age is increased and the older work force works longer, where will there be room for the younger workers to enter the work force. The work place has to expand to accommodate the aging and younger workers to eliminate the creation of an imbalance. Society must expand and retrain the older work force to perform the demand of the new work force to accommodate all of the workers. In actuality the actual work force is getting smaller, and with the shift in the nature of the work, the older workers are being pushed out, by the nature of the demand of the work force.
Another challenge for businesses and government is the ability for the aging workforce to learn and implement new technology. The aging population has the ability to learn, but requires programs to be set in place that will train them to use the new electronics. This program will need to be offered to all employees, not just the older population, as you do not want to unintentionally discriminate against the younger employees. The program can be offered voluntarily and/or it could be an incentivized program that would give each person who passes the course a certificate and an increase in pay. The aging workforce should not be disqualified from working just because there is new technology that is being implemented every day. The aging workforce necessitates on the job training to acquaint themselves with the new software and equipment. Understanding how to work with the vast differences in generations is now a requirement for administrators. There are four different generations in the workforce today and the way they interact and perceive their lives and careers are vastly different. Not only will supervisors need to be able to accommodate the aging employees, but they will also need to understand the differences between the generations and equip them to work together to promote their strengths and to become a productive member of the group.
Aging is a part of life’s course and is an inevitable process. In particular, policy makers now have to face challenges in creating a system that will economically provide for the elderly people who keep growing in number, while at the same time sustain a strong economic growth in the face of aging population. The aging population’s political choice of the “pay-as-you-go (PAYG) social security system, incorporating the heterogeneity of individuals in their preference for having children, and hence the endogenous fertility choices of individuals, into a simple overlapping generations model.” The aging population also, could possibly result in an increased contribution rate, thereby, increasing the redistribution of benefits based on the contribution of the retiree. Additionally, as the contribution rate increases so does the number of children and future contributors to the Social Security system (Hirazawa, et al., 2010).
The increase in the aging population is occurring in almost every country around the globe and has become a global issue which has brought about much concern. Policy makers must confront the many problems which have arisen from our aging population. The current steps and plans undertaken by the government to rectify the situation are in need of serious revise and additional solutions in order to ease the pressures which have arisen.
The aging population has a huge impact on politics, economics, and health care. Many in the aged population are very active in the political arena and are more likely to vote than their younger counterparts. Additionally, the government is tackling a growing financial burden from pension costs, medical care, and possibly long-term care, implying either sharp increases in taxes or a reneging on the promised level of benefits. Pursuant to Rother, 2014, measures must be taken to assist society in associating and supporting social and environmental aspects to ensure a successful aging community is achieved. Furthermore, steps to ensure the aging community has economic stability to promote and continue their ability to live independently in society. Providing economic stability ensures voluntary support and care giving exemplifies genuine community support for everyone (Rother, 2014).
As the population ages the needs of older people will change. Providing the elderly their promised benefits will require large tax increases. The responsibility on the younger workforce will be substantial. The major government transfer programs such as Social Security, Medicare, and Medicaid disproportionately benefit the elderly, while expenditures on public education disproportionately benefit the young. With the trend of our population entering the older age group, even more funds will be allocated to the elderly. Through the younger generation being fewer in number, the government consumption in public education will be reduced, somewhat offsetting the rising expenses for the older age group. Awkwardly the decrease in the number of school age children will be much less than the increasing numbers of people reaching retirement age, so the transfer of funds may be insignificant.
Strategies to ensure the aging population is provided for must become the number one priority in the United States. One strategy is the increase of the retirement age from sixty-two to seventy, which would allow many productive aging adults the ability to continue to work.
Strategic plans should be developed by companies that utilize a structure that balances age, compensation and policies, which create the maximum outcome for their industry. The utilization of demographic transition models to determine the retirement, retention and hiring specification to properly distribute the structure of the company (Clark and Ghent, 2009). Moreover, government and businesses should employ recommendations, tactics and strategies that maintain and comply with age discrimination laws, employment practices, and lawsuits based on age discrimination. Strategies for enactment to prevent age discrimination are legislation for equal work and benefits, strict enforcement of the ADEA, and simplified procedures that can be followed by those who have been discriminated against. Furthermore, implementation of enforced accommodations for older employees at the work place (Cavico and Mujtaba, 2012).
Moreover, the replenishing of the Social Security fund through the repayment of the governmental notes placed against the fund would alleviate the decreasing fund. Additionally, placing a cap on the amount of Social Security an individual is allotted would increase the availability of funds. Another strategy is for government to increase resources and policies into research and development of healthcare services to sustain the mean age of the population. Government policies should be implemented to tackle the problems that arise from having an aging population. These actions, especially in the area of medicine, could lessen the impact of the aging population on the economy and make the aging process easier for the elderly.
In conclusion as the demographic transition of the aging population continues to increase the bearing impact on the availability and funding of Social Security, this has had an impact on individuals, businesses and the economy. Eventually, the Social Security deficits may be offset by the increased revenue towards benefits from productive younger and older workers. Governmental policies and strategies are necessary to reduce and monitor the increase in this demographic transition. The elimination of the retirement age restriction and implemented strategies to enhance employment opportunities and availability allows the aging populations to continue to be productive members of society and maintain self-sufficiency.
References
Burkhauser, R. (2010). Transforming social security for an aging society. Human Ecology, 38(2), 25. Retrieved from http://search.proquest.com/docview/859539505
Cavico, F. J., & Mujtaba, B. G. (2012). Discrimination and the aging American workforce: Legal analysis and management strategies. Journal of Legal Issues and Cases in Business, 1, 1-41. Retrieved from http://search.proquest.com/docview/1017672826
Clark, R. L., & Ghent, L. S. (2010). Strategic HR management with an aging workforce: Using demographic models to determine optimal employment policies. Population Research and Policy Review, 29(1), 65-80. doi:http://dx.doi.org/10.1007/s11113-009-9143-8
Eggleston, K. N., & Fuchs, V. R. (2012). The new demographic transition: Most gains in life expectancy now realized late in life. The Journal of Economic Perspectives, 26(3), 137-156. doi:http://dx.doi.org/10.1257/jep.26.3.137
Galor, O. (2012). The demographic transition: Causes and consequences. Cliometrica, 6(1), 1-28. doi:http://dx.doi.org/10.1007/s11698-011-0062-7
Markson, E. W. and Stein, P. J. (2012). Social Gerontology: Issues and Prospects San Diego, California. Bridgepoint Education Inc. Kindle Edition.
Radovic-Markovic, M. (2013). An aging workforce: Employment opportunities and obstacles. Cadum, 1(6), 142-155. Retrieved from http://search.proquest.com/docview/1399307112
References (continued)
Rother, J. (2014). Social insurance: A key support for viable aging communities. Generations, 37(4), 79-83. Retrieved from http://search.proquest.com/docview/1503769341