The Challenge of Global Aging
By Susanne Paul, President, Global Action on AgingSpeech to the Congress of Public Services International
Yokohama, Japan, November 12, 1997
Plenary Session, Keynote
Iím honored to be here, to talk about the great challenges and struggles we face in this period of rapid population aging. You represent twenty million men and women, many of whom work directly with older people Ė carrying out policies and programs of solidarity and care for one another . . . Iím also happy to greet the many older persons from Japan who have joined us today.
Back in 1995, I organized a panel on the economic issues of an aging society at the UNís World Summit for Social Development in Copenhagen. PSI agreed to participate. Your Mike Waghorne came, spoke eloquently and contributed greatly. So I thank you for being a leader in the aging field.
Now, I will speak about the challenge to social services for an aging population in two parts of the world that seem very different Ė the United States and the Global South. The United States, itís true, eats more hamburgers, uses more microwave ovens and has more cell phones per capita. But both the US and the South reflect remarkably similar patterns. Both have come through a very recent transition from short life spans, life-long work, and close-knit groups of kin, to a present -- and a future --with very much longer lives, foreshortened periods of paid work, and individuals separated from families and kin. And in both, governments that were once expanding to provide collective social protection are now under heavy pressure to downsize and turn their services over to private markets. This trend deeply affects older persons.
First, letís look at lengthening life spans. In the United States, life expectancy has rocketed upwards by about two-thirds Ė from 46 to 76 -- in just the past hundred years. In half the amount of time Ė fifty years -- life spans have increased even more in the Global South. Lives have doubled in China, Malaysia, Morocco and Venezuela, to mention only a few cases. In China, like Japan, the doubling took place breathtakingly swiftly. For a couple of decades, a year was added to life expectancy for every year that passed. This is an incredible human achievement.
At the same time, the number of children being born -- in the U.S. and in the South -- has dropped. The number of older persons has gone up, while the number of children has gone down. These two trends together have shifted the age-distribution of societies -- a shift that will accelerate in the years ahead. It means fewer schools and more elder centers, fewer baby clinics and more geriatric clinics. All societies are greying -- with slightly different speeds and on slightly different time sequences. But they all are greying very fast.
Secondly, letís consider changes in work-life and employment. People are working far smaller proportions of their lengthening lives. A hundred years ago, in the United States, more than half the population worked as small farmers, or as shopkeepers or craftworkers. My grandfather and grandmother worked on a family farm in the Midwest state of Indiana. After attending school a few years, they started to farm in their mid-teens and kept on until they died. So they worked about eighty percent of their lives.
Two and three generations later, most members of my family are not farmers, but work in cities for wages for large employers. They studied at university until they were in their mid-twenties and the older ones are leaving the labor force due to downsizing and early-retirement pressures in their mid- or late-fifties. Since they are likely to live till age eighty or ninety, they will have worked only thirty percent of their lives. This radical shift in such a short time is typical, with tremendous implications for how society works and how later lives are lived.
Private corporations now insist on longer education-and-training in youth and earlier departure from the labor force. Government and trade union policies have accelerated these trends. Their goal is to reduce unemployment through what is euphemistically called early retirement. The number of retirees has grown even faster than the demographic increase of the older population, leading into the great pension crisis.
In the Global South the same trends are unmistakable. The transition away from life-long work on the land occurred much faster than in the United States. People stream into the cities where they must find work in a cash economy. Children go to school longer. But work opportunities are often tragically short. Some find work for just a few years. In the booming Chinese port city of Dalian, where I just visited, the average age of workers is in the early twenties. Eventually, workers lose their grip on what is called the labor market. The overwhelming majority find themselves unemployed and poor in their lengthening later years.
The third part of the picture is changing family patterns and changing kinship solidarity. In the past, many older people depended on their children to care for them. They considered their children to be their pension system. But now this is getting rare. My grandparents lived in a big farmhouse and some of their children and grandchildren lived with them. But now my family is spread all across the United States. My brother, lives near Los Angeles, while I live in New York, three thousand miles away. Families are no longer able to provide a home and direct care for older members.
In the United States, about a third of people over age 65 live entirely alone. At Global Action on Aging we estimate that less than one in ten older persons live with and depend on adult children. Thatís hardly a basis on which to plan for a secure old age. In the Global South, the situation is heading rapidly in the same direction. In Hong Kong, less than half of the older people live with their children and the percentage has been declining steadily. In Argentina, Jamaica and Kenya, especially in the cities, extended families living together are now increasingly rare. A recent study in Belize found that just one in twenty older persons lived with their adult children! More and more, older persons live with just a spouse or they live alone.
For many years, governments softened the impact of the these trends by taking on increasing responsibilities for the new aging society. Public pensions were probably the most important single factor. The United States government introduced nearly-universal public pensions in the 1930s and many countries of the South developed public pensions as well.
The United States also built many other programs for its older citizens -- programs to support health care for all people over age 65, programs for special housing, for community centers for older citizens and so on. Just across the street from my apartment in New York, a brand new high-rise building for the elderly provides nice facilities. Government money underwrote its construction and funds some of its operating costs.
In a similar way, strong states developed in many countries of the South -- in Argentina, Uruguay, Chile and Brazil, for example. Pensions and programs for older people were some of the great democratic achievements in those countries too.
But nation states have not continued to grow. For at least ten years and perhaps more, states are weakening, putting the future of policy and services for older citizens in serious question.
In a rapidly-globalizing world economy, with free movement of capital and burgeoning offshore tax havens like the Cayman Islands, governments are losing their tax capacity. As a result, government budgets have been declining and public services are under pressure. The budget-cutting process hits older citizens especially hard.
In this brave new world, the revenues of the twenty-five largest multinational corporations are larger than the tax income of all but thirteen nation states. . . Older citizens, stripped of their health care or their pension, can take scarce comfort from the soaring profits of these mammoth machines of private accumulation.
Worldwide, the International Monetary Fund and the World Bank have pushed for privatization and downsizing by pressuring governments through loan conditions. Beginning in the 1980ís, the Bank pressed governments to abolish public pensions, in favor of private programs, based on individual savings accounts. First in Chile and more recently in many other Latin American countries, privatization schemes were imposed, in spite of the opposition of the trade union movement and the great majority of the electorate. (When voters get a chance to express their opinion, as they recently did in New Zealand, they resoundingly reject these inhumane reforms).
The trend away from the welfare state is now under way in the North as well as the South, with enormous implications for aging policy. In the United States, pressures are building, to cut back government health benefits and pensions. At the same time, the government has cut funds for nursing homes, local clinics, elder centers, and even food programs. Public service workers experience these cutbacks as heavier case loads, less time for patient care, more industrial work conditions and the like. It is harder and harder for you to deliver caring, sensitive services.
Powerful figures like Wall Street tycoon Peter Peterson have financed a slick campaign to argue that the high costs of medical programs for older citizens and public pensions threaten to wreck the government and ruin the economy. They have twisted the statistics to create doomsday prophesies that the public funds for medical care and pensions are headed for certain bankruptcy. And they have set up fake grassroots groups like the Concord Coalition to make it seem like their proposals have popular backing. With the Social Security fund running at an annual surplus of more than fifty billion dollars, it took a remarkable feat of deception to sell the idea that public pensions were ready to collapse.
The conservative Cato Institute has a two million dollar Project on Social Security Privatization bankrolled by American Express, IBM and the State Street Bank of Boston. One thing is clear, said the Wall Street Journal not long ago: privatizing public pension systems globally . . . will generate enormous wealth for firms in the securities field. The Journal went on to note that (quote) the nationís financial giants are doing everything in their power to make it happen.
Hereís an estimate we have made at Global Action on Aging. If Social Security is privatized, financial firms can expect revenues in the order of $100 billion a year and profits of $40-50 billion a year!
What lies ahead in a world where there soon will be a billion people over age 60 Ė nearly one in five -- living without a capacity to earn a living and a minimal ability to buy basic necessities like shelter, heat, clothing and food in the marketplace?
To win the struggle for an aging society and to come successfully through the great transition to an era of long life, we will have to overcome many obstacles in the years ahead. A few basic tasks are required:
First, we will have to build strong solidarity among generations, so that everyone has a stake in a later years as a time of fulfillment. This will mean reconsidering ways in which older people can help younger ones of all ages and create ways that older people can contribute more directly to the life of society and take advantage of their skills and their wisdom.
Second, we will have to re-think the system of employment, so that older people are not pushed out of paid work and stripped of their wage-earning capacity just because they reach a certain chronological age. People must have the right to employment as long as they are interested in working and have the physical capacity. Jobs must be re-structured so that older citizens can better remain integrated in society and able to carry out socially-useful and meaningful activity.
Third, we must decisively reject neoliberal complaints that public services are too expensive. We live in a world of increasing plenty, where human ingenuity and labor are daily adding to our wealth and capacity to meet all basic human needs. At present, the fruits of that labor are going into the hands of just a tiny fraction of the planetís inhabitants.
Fourth, in this globalizing world we will have to look to solutions that go beyond the nation-state. In a global economy, we must seek new possibilities for funding. So we must look towards global sources like the Tobin Tax on foreign exchange transactions or the world-wide carbon emissions tax. These and similar initiatives could capture the resources we need.
Fifth, we must be mindful that aging is a womenís issue. Women live longer than men and are often poorer and in less good health in the later years of their life. So, though our struggle for a new aging society is an effort for all humanity, it is especially important for the future of womenís rights and womenís well-being.
Sixth, we must form broad, effective alliances across the trade union movement and with progressive non-governmental organizations that are committed to similar goals and purposes. And we must learn better how to work with and through the international institutions, especially the United Nations. The important work of 1999, the International Year of Older Persons, is an major opportunity for this kind of joint effort.
And finally, seventh, public service workers can and must lead the way -- by proposing and supporting innovative solutions, based on public policies, public funds and social solidarity. By reaffirming the cause and reinventing the practice of public service, you in this room can take the lead in forging a new society, of human dimensions, built for an aging population and welcoming to all of us in our later years. Thank you.