A Younger (Relatively) U.S. Population - A Global Competitive Advantage
The U.S. has a major funding problem with its entitlement spending (Social Security and Medicare) programs. However, the U.S. population is younger than that of Europe because the Fertility Rate is higher and Life Expectancy is (sadly) lower. Add to that the fact that European social programs are more generous than those of the U.S., and Europe has bigger problems than those of the U.S.
This has generally been ignored during the ascension of the Euro. However, Johathan R. Laing reports in Barron’s this week (link) that a new report by GaveKal, “an international investment-research boutique” notes that “rapidly aging populations in euroland figure to decimate working populations there and increase the governmental financial burden at a pace far faster than in the U.S.”
In addition to the U.S. having a younger population, the U.S. population works longer hours and later in life. The AARP ‘Profit From Experience’ report (link) included data showing that the U.S. workers stay on the job longer than all other G7 countries other than Japan.
Combine these facts with reports that indicate that Boomers want to stay on the job even longer, and the U.S. competitive advantage could grow even greater. What is needed is a continuing thrust to make sure that outdated policies and practices do not stand in the way of Boomers staying on the job when they would like to do so. For instance, EBRI reports (link) that 37% of workers retired earlier than they had planned. Health, disability, and caring for family members were part of the reason. However, downsizing and obsolete skills were a significant factor. Work incentives and retraining could probably bring a lot of these workers back to being productive for society.