[LUM#4] Welcome to an older world
How much will demographic aging cost? What impact will it have on our society? These are crucial questions, as evidenced by the enactment in 2016 of a law “on adapting society to aging”…
By 2050, one in three French people will be 60 or older. The Baby Boomer Grandparents1 are here, and very much so: with increasing life expectancy, they are one of the main factors driving the aging trend that is hitting our country’s population hard. The first question that arises is: how will we finance the wave of retirements looming on the horizon?
Funding Pensions
This “top-down” aging—that is, an increase in the number of people over 60—would not in itself be all that alarming.“In France, the labor force is expected to continue growing until 2050, driven by a relatively high fertility rate—averaging about two children per woman—and positive net migration. This should at least spare us from population aging from the bottom up, as is the case in other countries, such as Japan,” explains Brice Magdalou, professor of economics and researcher at the Montpellier Laboratory of Theoretical and Applied Economics (Lameta), now known as Ceem.
Another factor to consider: the baby boom effect will naturally begin to fade starting in the 2030s. Does this mean the funding for our pensions is secure? In fact, the problem has merely been temporarily postponed. “Successive pension reforms since 1993 have helped achieve a balanced system. But our system will fall back into deficit in 2020 if nothing is done: we will then need to find new resources amounting to 0.5% to 1% of our GDP starting in 2020. This means that newreformswill need to be implemented.”
A Society in Transition
What kind of society will emerge from this aging population? “It will accompany—and perhaps even accentuate—the profound changes currently taking place in the labor market. Greater flexibility and mobility, the growth of micro-enterprises and self-employment, and an increase in direct personal services: these are the trends we can expect,” says Brice Magdalou, who refers to an“Uberization2 ” of our society.
The older generation pioneered the May 1968 protests and ushered in sexual liberation; materialistic and raised on the golden age of the “30 Glorious Years,” it also remains deeply rooted in a culture of solidarity and social cohesion. What kind of world are they leading us toward? The only certainty is this: whether bohemian or bourgeois, boomers will be an essential part of society tomorrow—and key drivers of change…
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