The ageing apocalypse is upon us. Hordes of baby boomers are turning grey and entering the 65-plus demographic, ready to burn all your tax dollars on welfare and healthcare services. Terrified? You needn’t be. Research suggests older generations aren’t the financial ‘burden’ they’re made out to be. In fact, they actually benefit the economy.
Governments worldwide are being confronted by an increasing demand on healthcare and welfare, largely a result of ‘population ageing’: when the median age of a region rises due to increasing life expectancy and declining birth rates. In Australia, the median age rose from 28 years in 1970 to 37.3 years in 2014. According to the Australian Bureau of Statistics (ABS), the proportion of the population aged 65 years and over increased by over 2% between 1990 and 2010. These older people come at a significant cost to society, with three million beneficiaries of the age pension receiving a total of $34.7 billion in 2011/2012– enough cash to purchase a 120 million-year membership at your local bowls club. Yikes.
Additionally, expenditure on health care accounted for just 5.7% of Australia’s income in 1970, but was worth 9.5% by 2011/2012. These costly trends have led many to regard those aged 65 and over in a negatively. Respect in an Ageing Society, a study published by Benetas and Deakin University in 2010, found those in Generation Y often labelled older citizens as a collective “burden on society”. Similarly, participants from the baby boomers as well as Generations X and Y frequently described older Australians as being “unproductive”.
The Australian Institute of Family Studies noted the increasing prevalence of intergenerational age discrimination in a 2003 study, Measuring the value of unpaid household, caring and voluntary work of older Australians. “A focus on … financial costs has led to an unduly negative, problem-oriented view of population ageing that neglects the contribution of older citizens to the social and economic wellbeing of the nation,” the research paper reads. “The fact that many of those aged 55 and older, and most people aged 65 and older, are no longer in the paid workforce has reinforced the negative view that older people are a burden rather than an asset.”
The study estimated “Australians aged over 65 years contribute almost $39 billion per year in unpaid caring and voluntary work and, if the unpaid contribution of those aged 55 to 64 years is included, this contribution rises to $74.5 billion per annum”.
ABS stats indicate mature-age persons provide the majority of informal care for those with disability and people aged 60 years and older. In 2009, 62% of total carers were mature-age. The Guardian reports research conducted in the UK for the Women’s Royal Voluntary Service, indicating “people aged 65-plus contribute over AUD$78 billion more to the UK economy than they receive in state pensions, welfare and health services”, and this figure is expected to rise to AUD$146 billion by 2030.
Paid employment among the 65-plus age group is also “trending upwards”, according to the Australian Law Reform Commission. Employment rates of males in this age group doubled from 8% in 1993 to 16% by 2011, with the most commonly held positions being those in managing –particularly as tradespeople, accountants and livestock farmers. Employment of older females, who tended to hold administrative positions, was at an all-time high of 7% in 2011.
Professor David Lucas of the Australian National University says not all work conducted by seniors is measured by statistics. “As a retiree who is aged 76, but still doing research at ANU, my contribution is not included in Australia’s Gross Domestic Product,” he says.
Helen O’Reilly, Chief Human Resources Officer of Teacher’s Mutual Bank, affirms the work conducted by the company’s 150 mature-age employees, finding them to be better negotiators. “They’re more empathetic and they have a better understanding of customer needs based on their own life experience,” she says.
Removing the upper age limit for paying super to employees in July 2013 has likely contributed to more mature-age citizens joining or remaining in the workforce. Changes made to superannuation in the 2014 Federal budget – including the removal of the low income super contribution – are also likely to promote employment amongst older people, with many would-be retirees having to work to make up for losses in superannuation savings. The Government’s proposed plan to extend the retirement age from 65 to 70 by 2030 can also be expected to increase employment rates among older citizens.
Population ageing will continue to be at the centre of economic discussion for decades, but it’s important we don’t condemn the older generations for ageing. Their varied, positive contributions to society are useful and besides – one day we’ll be old, too.