Impact and Solutions to the Global Elderly Workforce

Impact and Solutions to the Global Elderly WorkforceSummaryWith todays advanced medical technology, the life expectancy rate is mel minusculeeder(prenominal) than ever. Life expectancy would increase if the loneliness age is fixed at the current age. In effect, there provide be more people sustainment on aid while there result be less manoeuvreforce to offset the difference in income tax income which increases the dependency ratio. Increased giving medication spending on pensions and healthc ar will result into debt. Higher tax rates will lose potential investors and discourage manpower productivity which leads to the decomposition in economic growth. Also, the shortage of workers will increase wages which will cause wage inflation. However, businesses linked to elderly such as retirement homes will see an increase of profits. On the other hand, one solution could be the increase of retirement age. Also, incentives such as lower tax rates on late retirement could be impl emented. reciprocationHigher income tax rates argon required due to the increase elderly creation and shrinking workforce. If income tax rates dont rise, the government will result in debt due to increased spending on pensions and health care. This soakeds the dependency ratio is raised. However, high tax rates will discourage outside(a) investors and decrease workforce productivity which will slouch economic growth. The shirking workforce will direct wages up which will lead to wage inflation. This will affect the hoidenishs GDP. On the other hand, industries related to the elderly such as retirement homes and healthcare will see an increase in business. The proposed increase in retirement age could lead to lower life expectancy and higher(prenominal) workforce. However, this will chip in to skilledSummaryjapan is distress from the caper with an aging community due to low put up rate rate and good healthcare. conf utilize fertility rate is due to late marriages as more people are focusing on their careers. It is projected by 2060, 60% of lacquers population will be elderly people. Also, the demand for health care and pension are expected to increase which means that tax rates essential also be increased. According to a demographic expert, the current pension and social security programs in lacquer are non designed to go steady ends with an aging population. The government has combated this situation by freeing more immigrants to work in Japan for jobs required for the aging population such as in healthcare. Japans consumer spending GDP has also been stagnant for the past few months.DiscussionI believe the reason for the stagnant consumer spending is because of the elderly as they dont often shop. As a result, decreased spending will affects Japans GDP. This will also contribute to long term recessions as most of the money is stagnant in retirement funds. Also, the increased demand for healthcare and pension will cause Japan to increase in s pending which will lower Japans GDP. To combat Japans flawed retirement funds, local 3rd party investment funds such as mutual and bonds should enter the market. These funds could be used to establish better healthcare facilities that are in claim by the rising elderly population. The increase of skilled immigrants will keep the aging population down and maintain needs but it could also mean that Japans money is going out of the res publica. This could contribute to a deficit in Japans workforce trade. However, Japan could set up trade agreements such as workforce exchange for technology with other countries to maintain a healthy GDP.SummaryAs a result of increasing elderly population, Japan is set to decline from the worlds second largest economy in place for china. Since 2010, Japans workforce will decline 1% for the abutting 30years. The national debt in Japan is already 200% of GDP as of 2004 and is projected to rise. European countries such as Italy (1.1birthrate), Bulgari a (1.2birthrate), Russia and Germany (1.35birthrate) are assembleing from low fertility rates. Its predicted that the economic will shift from elder countries to emerging countries such as India and China.DiscussionAs a result of Japans declining workforce, the GDP is set to drop and the countrys debt will increase. The increasing debt will even worse in the future because of the decreased workforce income tax. This will cause long term recessions. The problem of the elderly is also suffered by developed countries typically in Europe. This is due to the well-established healthcare and economic systems. This problem will contribute to the shrinkage of their economies. This will result in the economic growth shift to developing countries such as India and China. Unlike Japan and Europe, China is overpopulated. To combat the future elderly problem, China has acted by controlling birth rates in order to prevent overpopulation.SummaryCanadas healthcare ingestion has been substantially increasing. By 2020, its projected to cost CAD147billion which is an 83% increase from year 2000. As a result, Canada is one of the top spenders for healthcare on GDP. The legal age of the spenders are the elderly. Due to the high demand of healthcare, Canada is currently facing a shortage of medical workers. It is also expected that Canada will have a shortage in other skilled workers. By 2050, it is predicted that the dependency ratio will increase to 4.4 workers for every 10 workers. Canadians are also investing more in risky investments such as stocks and mutual funds compared to 20 years ago. On the other hand, when baby boomers withdraw their pension funds, tax will be generated in the progress.DiscussionThe increasing dependency ratio will be a complete burden to Canadas workforce, debt and GDP. To decrease the ratio, healthcare benefits should be reduced. This could allow the privatization of healthcare services which will generate income tax. However, there will be serious negative social outcomes. Canadas tax rates should be revise to compensate for the increased demand to prevent debt. In addition, the retirement fund programs should also be reviewed. To combat the lack of skilled workforce, Canada could loosen immigration laws or restrict early retirement age. On the other hand, the predicted tax generated from pension funds withdrawal could partially compensate for the increased expenditures. The decrease of younger population will be beneficial as expenditures on education will be reduced. Furthermore, the increase spending in retirement associated items such as retirement homes could generate more tax. In the long run, Canada could increase funding on medical advances to allow for cheaper and more sustainable healthcare alternatives. Also, the public should also be continually encouraged to invest in privately owned funds.SummaryEurope and other developing countries are suffering for unanticipated changes in fertility rates and aging issues. As a result, the workforce has been decreased and is burdened with higher age dependency ratios. In effect, higher tax rates are required to sustain the increased demand. Predictions suggest living standards per capita in Japan, US and Europe will be on a decline over the next 50 years. Europe would suffer a 20% increase GDP debt in the next 50 years while Japan and US would suffer from 21.5% and 10%. It is also expected that workforce productivity rates will decline.DiscussionGenerally, developed countries have higher elderly population as their healthcare systems have been established. Also, the lower fertility rates could be blamed on education as people are putting off marriages to a ulterior age due to further studies. Another reason is the increased youth dependency ratio. Compared with 3rd world and certain developing countries, it is not sensible to reproduce as children are a liability instead of an asset. For example, children can be used as labor in farms while in develop ed countries, send them to school requires cost and time. Also, many couples put off having children because of their demanding career. However, because of this short term microeconomics demands, the long term microeconomics will suffer. Developed countries debt rate are projected to rise, and workforce and productivity rates are set to decrease due to the decrease of income tax. To combat the low workforce rates, countries should invest in technology to increase work efficiency. This will also control wage inflation. Also, countries could encourage immigration to balance out the elderly.SummaryTo combat the issue of rising elderly population and low fertility rates, France has acted by increasing children incentives. This policy was launched in the 70s and also aims to keep more women in work. As a result, France has succeeded to be Europes 2nd highest fertility rate with 1.9children per woman compared to Irelands 1.4. Also, France has Europes highest female employment rate. Incent ives include 3 year paid parental leave, free dependable time preschool, subsidized day care, fixed wage for nannies, and monthly childcare allowances. In addition, middle class mothers could receive up to 1000 Euros for having a trio child. Thats almost like the minimum wage of 1200 Euros. This incentive policy is also seen in other European countries such as Germany cand UK but its not as beneficial as Frances. In the future, France plans to increase the grants to keep the birth and women employment rates healthy.DiscussionDue to Frances low population rate, an incentive policy to keep fertility rates up is worth the high cost of expenditures. The costly benefits offered to women who work and reproduce is worth it as it keeps the workforce healthy and growing. As a result of increased income, the countrys GDP growth rate would increase as more people are spending their money. That will lead to decreased country debt which means tax rates could be lower. Once the tax rates are lo wer, local and international investments will bloom which increases a countrys GDP. Also, the extra money could be used to invest that will potentially improve a countrys production cost and productivity efficiency. However, this is further sensible as a long term investment as if it is short termed, the countrys GDP would be greatly affected. Frances plan should be replicated in other underpopulated developing countries to prevent the grey problem.SummaryProjection information says that ageing population in Australia is set to double in 40 years. Average work force age is expected to decline. The problems are blamed on low birth rates that unable to sustain the replacement rate. It is also blamed on longer life expectancy. Australia has addressed this issue by creating a program for young skilled immigrants to enter the country. This will relive with the growth of the workforce and the workforces skill and productivity levels. However, this is not a feasible solution as the immi grants will also age in the future which will force Australia to allow more immigrants in yearly to balance the deficit.DiscussionThis inevitable issue of the grey population is affecting most industrialized countries. Apart from the decrease in workforce members and productivity and skill levels, low birth rates are unable to sustain the replacement rate. This would result into the drop of Australias economy and wage inflation which could drive off potential world(a) investors. Even worse, the wage in Australia is already higher than other countries. The effects of wage inflation are already seen with major automobile companies such as Ford moving away from local manufacturing to other developing countries such as Thailand. Again, the solution of young skilled immigration workforce would not be viable as its a short term solution. To truly solve this unprecedented issue, Australia should follow Frances footsteps of providing with children benefits.SummaryThe rising rate of the grey ing population in emerging countries are posing a problem as they are getting old before they get rich. It has created problems such as pension plans that are turning non-sustainable. In addition, developing countries tend to suffer more due to the majority in informal labour sector that salaries do not contribute to the countrys pension plans. In a life cycles perspective, the economic needs and income making vary over the lead of life. Due to the increasing greying population, the elderly consumes more savings than generated during youth. This is critical as the country will result in slower growth compared to a country with more working youth people. This will also result into debt.DiscussionAgain, increasing womans participation in workforce by providing on the table working hours or government funded day care could increase workforce participation. Also, the government can reduce citizens benefits or increase the tax to just costs. In contrast, a country without debt will li kely experience reduced tax and more growth as it encourages business to invest. Thus, investments in technology will increase efficiency on the countrys production possibilities frontier. Also, it will increase competition which is beneficial for the GDP growth. However, problems related to less income generated from the youth than used by the elderly could pose a serious problem. This will directly result in debt and could possibly start a long and painful recession. To only solution is to generate increased revenue. However, I believe developing countries that do not have established pension plans might not suffer as much as developed countries with high return pensions. Although we cannot learn about this problem from the past, we still can make long term decisions that will take over us from unexpected economy situations in the future.