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Saturday, June 28, 2003


The decline of Europe - more retirees
I am not quite prepared to say that demographics is destiny, but Europe's demographics don't look so good.

One study by William Frey, a demographer at the Brookings Institution in Washington, predicts that the median age in the United States in 2050 will be 35.4, only a very slight increase from what it is now. In Europe, by contrast, it is expected to rise to 52.3 from 37.7.

The likely meaning of this "stunning difference," as the British weekly The Economist called the growing demographic disparity between Europe and the United States, is that American power — economic and military — will continue to grow relative to Europe's, which will also decline in comparison with other parts of the world like China, India and Latin America.
In case you haven't read WOC's post on 12 under-rated global trends, do so. One of the 12 is Europe's looming pension crisis, where we find the following tidbit from the UK Independent:
The implications of ageing on the European social welfare model, where the current generation of working people pay the benefits of the current generation of retirees, have been so widely recognised that there is a danger of "pension fatigue" overtaking electorates. The core problem is that welfare systems that were developed at a time when there were more than four workers for every pensioner cannot function when there are fewer than two. (In the case of Spain and Italy, there will actually be fewer workers than pensioners when the present 20-somethings retire.)
But that's not all. Not only is Europe's population aging, it is growing smaller. Either Europeans need to increase their own birth rate (perhaps, as it has increased in France recently) or they will need to increase immigration. But anti-immigrant sentiment is rising there.

Governments' suggestions to raise the pension-eligibility age are strongly resisted.
"In reality, a legal retirement age of 80 is what we should aim at," Erich Streissler, an Austrian economist, wrote in a newspaper article.
Fat chance. In fact, more than half of men across Europe stop working between age 55-65.

by Donald Sensing, 6/28/2003 09:39:12 PM. Permalink |  





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