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Business people who are 50 or older are transforming our economy

The productive world is rethinking its relationship with those over 50; along with the population aging, there are places where the participation of this segment in working life advances; how Argentina is located in this topic Credit: Shutterstock

“Leisure is the mother of all vices, but she is a mother and we have to respect her,” said Ernesto Esteban Etchenique, an aphorist who came from the imagination of Rosario writer and humorist Roberto Fontanarrosa.

The aphorism can be applied to many contexts, but definitely not to Japan in the last year, which is the second largest economic expansion since the Second World War. Since 2012, the economically active population of the Asian country has fallen by 4.7 million people, due to the advance of the average age of the population in the most aging territory in the world.

However, against all the forecasts of the economists and challenging their own destiny, in that period the country incorporated 4.4 million people into the labor market, has unemployment at historical lows and it was the OECD economy that, in proportion, created more posts. Most of the new workers are over 50 years old (for them, both the government and the companies are promoting drastic changes in their policies). There is also a large presence of women and immigrants.

For years, economists spoke of a “Japanization” as a synonym of stagnation, largely related to the growing proportion of adult citizens who had to settle the economically active population. It is, today, the only country where people over 60 represent more than 30% of the total population.

But by 2050 62 countries will have reached that proportion (including China), and in that year it is estimated that Spain will be the “oldest” country on the planet, due to the combination of abrupt fall in the birth rate and extension of the average life .

The expansion and vitality of the Japanese economy are a sign that the demographic vector, which according to the Australian technologist Kate Crawford is the most predictable hurricane of change (the other three are the technological, climate effects and conservative populisms at a political level), in reality it is not so, and that the manual of the “demographic transition” of economists is rewritten day by day.

In a world in which in 2030 (not so much) the first millennials will turn 50, the economy -both at the macro level and in the business sphere- is rethinking its relationship with those over 50. For many, the “Japanization” of the global economy will not necessarily be a burden, but they see it as an opportunity and are no longer associating it with negative values, as it was happening until recently.

For the excerpts of the Federal Reserve of the United States Ben Bernanke, “there is not such a disruptive factor for the next decades in the global economy as a whole as the aging of the population”.

His colleague the economist Tyler Cowen affirms that, although the holders of means give greater prominence to the advent of the robots to replace human uses, from the economic point of view it is much more relevant to discuss how to better integrate those over 50 to the market of the future. With its threats and opportunities, in a context in which medicine is already making an increasing proportion of the population spend more decades in a state of physical and cognitive fullness, and many workers over 60 are at his best moment in the career.

Only one piece of information helps to determine the size of the phenomenon: in absolute terms, the “longevity economy” today is larger than any GDP in the world, with the exception of the US. and China.

A window of a decade

Challenges and macroeconomic opportunities (due to the demographic transition) is the subject of a recent investigation by the Argentine economist José Fanelli, perhaps the academic of this discipline who has been studying the subject most for Argentina and Latin America.

According to Fanelli, the country enjoys what is known as a “window of demographic opportunity” (VOD), with a relatively young population and at its maximum of the U-50 labor supply ratio. The window will close in 2030, along with the advent of the first fifty-year-old millennials.

For the economist, for some time now the country has enjoyed a double “demographic bonus”, due to the population pyramid itself and because of the most populated nations of the world demand what Argentina produces the most (food). Given this fact, the non-growth of the local economy since 2011 looks even more alarming. There are 11 years, says Fanelli, “to become rich before reaching adulthood,” as Japan was able to do. Therefore, the history of the Asian island is not directly extrapolated to the economies of Latin America.

“The role of people between the ages of 15 and 64 derives its importance from the fact that in our society reproductive decisions, those of participating in the labor market, acting as entrepreneurs, saving and taking or offering.

In addition, their income constitutes the bulk of the tax base, so their behavior determines the available fiscal space, therefore, if the proportion of adults varies, it is expected that there will be changes in the labor and financial markets, as well as in the fiscal space “, explains Fanelli.

For the professor of UBA and Udesa, all current fiscal and macroeconomic policies should take into account these intertemporal factors, given that, with the demographic transition, “the assumption that the future will repeat the present is not good”.

But this rarely happens, because the economic policy incentives are short term, while, as the academics of this field say, “the demographic phenomena are like watching the grass grow” (so slow).

The most recent data of the “senior map” in Argentina is in a work that was carried out by the Directorate of Labor Statistics of the Ministry of Production and Labor, published months ago and entitled Young people with a completed mandate.

There he realizes that 70% of Argentines between 50 and 64 years old work (4.2 million people), although the rate of self-employment is 27%, considered high when compared to 17% of the segment of people from 15 to 49 years old. The main reason: discrimination by age (“old age” or “ageism”) by companies.

Five generations

The “XM combo” is a term coined by Sergio Kaufman, president of Accenture, to allude to a corporate imperative of this demographic transition: the need to achieve good joins between workers of generation X (middle age and adults) and the millennials It is a stage that capitalism never knew: that of the coexistence of up to five generations of employees in the same company.

According to a recent report by the World Economic Forum (WEF), “most of the conversations [about public policies and corporate strategies in the face of population aging] revolve around a ‘problem that must be solved’. The conversation can not revolve around how to avoid a crisis, it must be reoriented to how to take advantage of individuals, organizations, and countries. ”

The WEF created an index of 57 countries to measure the degree of preparedness of their economies in the face of the demographic transition. By far, the main obstacle that detected the study was the prejudices of job seekers to take workers over 50.

“It is a widespread problem in both high income and middle and middle-income countries- We see adult employees as less efficient, intractable, refractory to technology and change -they hold in the WEF-, when in reality they are the generation most committed to their employment, which shows more motivation and emotional maturity to make better decisions. ”

Nor is it true that adults are a category with more risk of being replaced by robots and technology (the risk is evenly distributed in all ages, according to a 2017 study by Accenture). The Stanford Center for Longevity found that people over 60 in companies tend to be more satisfied with their jobs, “develop a greater sense of ethics and loyalty, contribute more to the team’s cohesion and care about less his personal advances. ”

Although with the public and business policies facing the demographic transition is making way to walk, there are already experienced in different parts of the world that aim to balance the intergenerational playing field. In China there are already thousands of “adult universities” that seek to continue learning beyond the age of 60; Germany and the Nordic countries are implementing mass-scale retraining programs for adults whose occupations became obsolete.

“A few days ago, the financial regulation office of the United Kingdom allowed pension funds to start investing in startups, which is an interesting measure of ‘bridge’ between different worlds”, tells LA NACION Fernando Vega Olmos, creative, owner of PicNic and coiner of the term “perennials” to refer to this age layer. About the word: along with the growth of the senior phenomenon also exploded creativity in neologisms, and there is the talk of “majors” or “silver economy” – silver economy, for the color of gray hair, among other hybrids.

In Japan, the government sent officials to study the case of Ohara, a medium-sized family business that manufactures desserts and pastries and whose owners grew tired of dealing with the very high turnover of millennials.

They placed notices to ask for employees “only 60 years old up”. Since then, the firm has had its highest growth rate, with workers who, on average, are 70 years old.

Of course, as in any vision of the future, there is a tension between utopia and dystopia and not everything is the color of roses. Last week, Bloomberg published a column signed by economist Noah Smith (a star on social media) entitled “Too many Americans will never be able to retire.”

The hypothesis: the abrupt drop in the birth rate and the restrictive policy for the entry of immigrants will mean that there is not enough population for care tasks and no taxes to pay for worthy retreats.

For Smith, although some see the higher rate of adult employees as something positive (they want to continue working on what they like), others (including him) analyze it as a weakness of the economy, with people over 60 who simply can not afford to stop generating income. Like Clint Eastwood in La mule, a film still on the bill, which at 88 years old should turn to illegal tasks in the face of personal economic bankruptcy.

In the same vein, another equally gray story circulated in January by various means: in Japan rose 600% thefts committed by people over 60 to go to jail. It is not a relevant phenomenon at the level of numbers (there are less than 5000 people over 60 years in Japanese prisons), but the rate of increase was mainly due to old people who seek to escape from loneliness and poverty, and live in a context of social interaction and certainty with respect to “being able to eat every day and rest”, as advocated by the aphorism of Ernesto Esteban Etchenique, Fontanarrosa’s character.

The keys to a change

Life expectancy grows and the elderly are more active

11.2%

It is the percentage of the total population of the country that is 65 years old or more, according to the data published by the World Bank; it is a far index to that of Japan, which reaches 27% (and those over 60 exceed 33% there)

8.7%

Global data

It is the part of the inhabitants of the entire planet who are 65 years old or older; the oldest population is in Europe and the youngest (on average) in the countries of Africa

Labor force

In Japan, the oldest country in the world, a significant number of people joined the labor market: most of the new workers are over 50 years old and there is also large participation of immigrant women

Specific policies

The Asian country, which is the oldest in the world, promotes drastic changes in certain policies to facilitate the entry or permanence of older adults in employment positions; organizations like the ILO advise taking such initiatives

Demographic bonus

Argentina is currently undergoing the previous stage of its population structure starting to change significantly, with a progressive increase in the proportion of people over 65 over the total population

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