Mon, Jul 17, 2017 - Page 6 News List

‘Silver economy’ presents challenge

By Lin Chih-tu 林志都

The Economist on July 8 published a special report on the rapidly aging population in developed nations and China, and about what those countries should do about it.

A decade or so ago, many observers were talking about the potential of an economy dominated by elderly people — the so-called “silver economy” — but now more people are worried that the trend of rapidly aging populations will be the ruin of national finances because of a shrinking labor supply and the growing burden of pensions, and that it will have a negative effect on defense, the economy and innovation.

The “silver economy” has come to be seen as more of a “silver time bomb.”

However, the report also said that thanks to changing lifestyles and advances in medical science and technology, more elderly people have plenty of energy and mental clarity, which enables them to keep working and enjoying their lives.

Governments should reform their labor laws to delay or even abolish the retirement age, which would lighten the burden of pension payments, the report said.

Work environments and legal protections can be improved so that elderly people could return to the workplace and continue to work as advisers or in the service industry, where they can earn salaries and take pride in their profession even if they work for relatively short hours.

The idea might seem radical to people in Taiwan, which is caught up in a conflict between the supporters and opponents of proposed pension reforms.

The nation also faces a growing gap between rich and poor people, with young people having to put up with very low salaries. However, the reality will sooner or later force people to confront and tackle essential reforms related to the aging population.

According to Ministry of the Interior figures, in February Taiwan’s population aged 65 or above overtook that of children aged under 15 for the first time, and next year elderly people will exceed 14 percent of the entire population, officially making the nation a so-called aged society.

One of the effects is that the nation suffers from a chronic shortage of labor, as can be seen from the continuing demand for migrant workers and many low-grade service jobs being performed by first-generation immigrants.

The government should formulate a long-term strategy to cope with the problems — on the one hand taking advantage of the aging trend to encourage an industrial restructuring and raise workers’ productivity and salaries, while on the other hand giving more elderly people the chance to return to the workplace and use their experience and skills. The nation should also open its doors to migrants from friendly nations.

Aging populations are a global trend that will not be reversed within a couple of generations, but the government can do its best to mollify its impact on the nation, and it might even be able to change the nation’s economic model and make it stronger.

Lin Chih-tu graduated from National Cheng Kung University’s Institute of Gerontology.

Translated by Julian Clegg

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