Wake-up call: how to manage demographic change
German angst is a much invoked concept, especially by experts outside of Germany. Yet with regard to demographic change there is no need for such worry
Brigitte Miksa
© Plainpicture
Demographic change is not quite the bogeyman it is often made out to be. After considerable worry in the about overpopulation, we now see a trend going in the opposite direction and again, the doomsayers abound.
Yes, aging societies will continue to create serious challenges such as pension systems’ sustainability, their adequacy, maintaining an older workforce and the need to rethink how our working lives should be structured. But if as a society, be that in Germany and elsewhere, we can agree to address these issues, I am sure they can be handled. There are numerous advantages to older societies, as a recent book edited by Paul H. Irving of the Milken Institute, aptly titled The Upside of Aging , indicates.
In fact, what is shown in Germany’s age pyramid points to a healthier society. The pyramid’s shrinking base indicates a low infant mortality and an increasing life expectancy. This is positive and similar developments can be found in countries around the world, with Asian nations aging faster than many others.
Neither are decreasing fertility rates set in stone. Our research indicates that European countries – excluding Germany – are experiencing a “Brangelina-effect.” Named after Hollywood stars Angelina Jolie and Brad Pitt, it describes how increasing wealth leads to couples having more children.
Rather than viewing aging as a doomsday scenario, societies are better off taking increasing life expectancy and decreasing fertility rates as wake-up calls. To avoid lower productivity and falling wealth levels, we cannot continue business as usual. Unlocking the resources of older workers and non-working women can make a difference.
RETIREMENT AS WE KNEW IT
On a broader level, the future of work has to be rethought. So far, our professional lives develop linearly until age 45, maybe 50. But many of my colleagues are considering stepping back from their management functions into consultant roles, sharing their expertise with younger colleagues while making room for them to assume new responsibilities. The future of work has to be rethought to allow members of a mature workforce to switch between multiple phases of training, working and caring for offspring or parent generations over their lifetime.
Consequently, tomorrow’s retirement may look very different from today’s. Working life likely needs to be extended and retirement entry made more flexible, as countries like Sweden and Norway demonstrate. Given that we are living longer, we may have to consider entering retirement at age 70 – or even 80. Another option could be to combine retirement and working life, with income generated from both retirement benefits and part-time work. The concept of work-life balance takes on a whole new meaning.
This article is based on a panel discussion at Germany’s Westdeutscher Rundfunk. Download a German language podcast here
