CONSEQUENCES OF OLD WORKING POPULATION 3
Consequencesof Old Working Population
WarrenBuffet, at the age of 83, has optimized a serious demographic trendof highly skilled populace working well which was thought to be oldage. In the rich world, people who are well educated increasinglywork for a longer period than those who are less-skilled. For examplein America, 65% of men with professional degrees aged 62-74 areworking compared to 32% of men with high-school certificates. Thatgap is increasingly dividing between the well-educated riches andunskilled poor which is commonly in all age groups. There is rise ofincomes to highly skilled due to rapid innovation while pressingthose of unskilled workers. The well-offs are working longer hoursexpanding their working live as compared to people who are lesseducated working for shorter hours. The research shows that thosepeople working an age of 65 or more will double within next 20 yearsfrom 600m to 1.1 billion. Secular stagnation and slower economicgrowth can happen due to translation of more years in retirementinstead of working for more years leading busting of governmentbudget.
Thedivision between the idle old and working young creates a new trendgrowing the gap between those who have skills and those who don’t.The division mostly happens in America where baby-boomers who arewell educated are setting off retirement while young people who areless-skilled have dropped out of work.
Policiesand technological change are partly responsible for the effect.Abandonment of policies that encourage people retire at an early agehas contributed to the rise of life expectancy since the better-offmust work for a longer period in order to have comfortableretirements. Nowadays, the old-aged highly educated people are moreproductive than their antecedents leading to pay rise on them hencebecoming very rich. Technology affects in that those working peoplewith computer skills in management are creative such that such skillsdoes not decline with age. The trend will not only benefit the oldiesbut also the society. Government will budget a larger amount of moneysince those earning high will pay taxes for a longer time.Considering the other side of social scale things look severe. Manualwork becomes harder as people are getting old, and public pensionsseem to be attractive to unemployed and those with low wages. Sucheffects will not all be beneficial to the economy since wealthy oldworking people will mount up more savings, which will make demand tobe weak. Inequality will rise and a growing on part of wealth will beinherited by the next generation, enlarging the gap between thewinners and losers.
Oneway of response is to impose high taxes on inheritance. This willenforce old people to spend their money rather than saving.Governments should not focus on redistribution of income but oncreating more of it by reforming education and retirement. Age shouldnot be a determiner of a working life. Mandatory pension rules andretirement ages that prevent people from working for a long timeshould go. Welfare should reveal the greater opportunities open thosehighly skilled. There should be more progression on pensions. Thistrend outlines the benefit of raising public investment in educationon each level so that many people can get more skills helpful incurrent labor market. The unskilled people ageing 60 could learnvocational skills, like caring for the large number of growing peoplesince they cannot become computer scientists.