Transcript
Seneca College
Report on Aging Demographics and Their Effects
ECN 501 FB
Professor: Mr. Mofakhar Hussain
Submitted By: Student B
Date: August 12, 2009
Index
Introduction………………………………………………………………………………3
Effect on Economy and Family condition………………………………………………4
Effect on Health…………………………………………………………………………..6
Alternatives/ Solution ……………………………………….…………………………..7
References………………………………………………………………………………...9
Introduction:
The world’s population is aging at unexpected high rate. The difference of older population between July 2007 and July 2008 was more than 10.4 million people. The main reason of this is high fertility rate after World War II and death rate is decreased in new technology era. For both, developed and developing countries this is very big challenge because the most money is in those countries and the ratio of aging people is very high in those countries. At the same time, the health issues, economic effect and reducing in global saving are major problem come out rapidly.
Each month, 870,000 people are added as aged people in world’s population. The following graph indicates past, present and expected future numbers of population of under age 5 and 65 and over people. In 2009, the situation has started of making impact on all areas of life.
At mid of 2008 year, the estimated population of 65 years and over was 506 million, which is expected to be 1.3 billion in 2040. Japan is the first country which is under influence of this effect. Japan has over 21% people are aged. The death rate is very slow, in other words the life-expectancy is very high. It took 26 years from 1970 to 1996 for Japan to increase aged people 7% to 14%, while Canada took 65 years for the same from 1994 to 2009. That indicates that we are in the same boat now as Japan. People who born in between years 1945 to 1965 are called baby boomers. These baby boomers were turn into 41 to 60 years age group in 2006. The group of people who born in between 1922 and 1938 were turn in to age group of 68 and 81 years in year 2006. Now, all scene stars from here. The average life expectancy is more than what they are now. If we look at past, 40 years ago 40% of Canadian population was because of baby boomers. All those baby boomers were change to senior citizen rapidly.
According to Statistic Canada, the population of age under 15 is decrease by -2.5% between years 2001 to 2006. The percentage ratio population of seniors is more than children. This ratio will be increases by 2011 because of baby-boomers turn into 65. Very surprising results and data analysis from current survey indicates that in next 25 years the number of senior citizens will be doubled. The median age is 39.5 years which will defiantly increases in coming years. The women have higher life expectancy than men. The approximate life expectancy gap is close to 5 years.
Effect on Economy and Family Condition:
U.S. and Japan contribute the largest short fall in global financial wealth which is $ 19 trillion and $8 trillion respectively. In survey of 2006, it is discovered that in US twenty percent of 40-44 age women having no biological child. The working age person will be from 5 to 2 per older person in developed region while in less developed region, this will be 12 to 4. This will affect a lot in terms of security system and traditional financial scheme. China introduced policy of one child in 1979, to decrease the lower fertility rate. On the other side, now the situation is quite difficult. If a child marry at the age of 23 and single child has responsibility of four parents and four grand parents. This shows that there is drastic decrease in family size and decrease in number of caregiver for aging parents. It is very difficult for a child to handle family and finance with single hand. Current situation is, there are 4 people to 1 retiree, while this ratio will 2:1 in 2050. These retirees do not generate wealth for a country. The burden for the country increases so either country has to borrow money to keep balance, or increase taxes on current workers to generate more income from few sources. All these situation leads less savings for current workers, which direct affect current GDP and for future retirees will end up in poor condition. There is no country that will generate enough income in next two decades to overcome the shortfall because of this declination. It is true that we are going through recession period these days, on the other hand there is short fall for skilled workers. If we look at current condition in Canada, People prefer to get retirement before they turn 60, while young students are taking longer time than required to complete their education and the most effective is demographic aging. If we combine all these together, then we realize that we are standing on sharp edge of knife, and as we go further the situation will become more difficult to handle.
Higher life expectancy is creating major problem to Canada’s social security system. The CPP (Canadian Pension Plan) should be altered to meet future expectation. On one hand the aging population and senior citizens dependent on CPP increases, while on the other hand the source of income to generate proper fund for those old people decreases. 60% income of female senior citizen is dependent on CPP. Canadian live longer after 65, in other words after retirement, the government is responsible for so many coverage after that. Some examples are proving shelter, health coverage, senior citizen benefits, financing and many more. Every single benefit is to provide better life to those seniors especially from financial point of view.
Effect on Health:
In Canada, population of aged people is 13% as on today, which will be increase up to 21% in next 25 years. In 1970, it was predicted that in the hospital, the number of patients will increases as we go ahead but that prediction was wrong. The numbers of patients decrease because of healthy and long life. On the other hand, aging related dieses like Alzheimer' increase.
In Canada, population of aged people is 13% as on today, which will be increase up to 21% in next 25 years. Only 20% of seniors use Health Service very frequent. Other seniors uses almost same as adult. Some common diseases e.g. eye related or bones related which grows with age. These are very common diseases and seniors have to suffer a lot and always dependent on other family members. Other than eye and hearing loss Alzheimer is also one which appears in 5-7% in seniors. As the number of senior increases, the percentage is also increases. Depression is also one of the problems found in old age people, which is not a major problem these days. Women reported more problems than men. Canadian health system was more focused on providing temporary treatment. Now, the system is changed, nurses visit old age people at home and also government provide food for them so that they can live safely without burden.
Alternatives / Solution
This financial condition is burden on new generation. Government has limited source to generate income and major income come from tax structure. This tax structure is burden on current generation. Simple calculation is that higher the pay rate more tax will be deducted from an account. Lets consider simple example of current scenario, If a person earn $15 per hour and every 15 days he earns $2100 after tax deduction of $ 400, then what about the efforts he did for those $ 400? At this stage also government is worried about his income and how to survive for future. Where will this end up with? We are at the beginning era of this baby boomer and we pay tax abundant amount. What about the person who has big family and only one income source. Government should bring some new policies or system so that work both way. That doesn’t generate burden on current life style and create income too. New savings plan or equal currency structure in all over North America or focus on world’s need and generate new job opportunity based on that in Canada that attract new immigrant to work for Canada. It is also true that Canadian finance is based on banking structure. If we consider weather and conditions it is understood that we are not blessed with winter farming and face hard winter. On the other hand US is hub of IT sector. Canada can work with companies like IBM, Microsoft to open branches here. They are going towards China, India – Asian countries. Why not we? Don’t we need money? There are bunch of immigrants come here every year. On one hand we can ask for world class IT professionals and on the other hand we can make deal with world class companies to open new job opportunities. We have such strong reputation in the world in form of peace, healthy life and world class environment. Government should take benefits of all these and make solid financial structure. It is understood that our tomorrow is based on our action which we take today. The problem of sudden increase in population of senior citizen has already started. The current financial structure is not sufficient enough to withstand the blow of new coming requirement of finance. The solution of all problems is systematic financial planning, finding new ways of generating new incomes, and increase net savings of population.
From the beginning on this century we knew that we are going to face this problem. It is really surprising that government is focusing on analysis of all those effects and analysis of future. Government should focus on new ways of generating income, should ask for debate of world class financial experts. On Statistic Canada website there are bunch of pages of problems none of them indicates what solution of this problem is!!! Is this the right way to deal problem? Is this our government we are relying on? Is this the government we are taking proud? What is their duty, to show problems or to find solutions?
References:
Canada’s aging population, Government of Canada, Minister of Public Works and Government Service 2002.
Magnus, George, The age of aging, Wiley Publishers, 2009
Web search: _http://www.statcan.gc.ca/pub/91-209-x/91-209-x2004000-eng.htm_, July 24, 2009
_http://www.phac-aspc.gc.ca/seniors-aines/pubs/fed_paper/pdfs/fedpager_e.pdf_ , July 16, 2009
West, Mark. and Diefenbach, Donald. "Trust, Community Affiliation, and Newspaper Subscription" Paper presented at the annual meeting of the American Association for Public Opinion Research, Sheraton Music City, Nashville, TN, Aug 16, 2003
