Thanks to the Year of the Dragon baby boom, Taiwan will see a respite from the greying of its population.
The latest figures from the Council for Economic Planning and Development delay the arrival of zero population growth from the earlier estimation of 2022 to between 2024 and 2027. Taiwan is estimated to officially become an aged society (with 14 percent of population over 65 years old) by 2018, one year later than previously estimated.
With one of the lowest birth rates in the world, Taiwan has long been worried by the prospects of an aging society. The main concern is the increasing dependency ratio ― between every 100 working age people (15-65 year olds) and the corresponding number of those outside of that age range. Currently that number is 35, the lowest in record, but it is expected to skyrocket to 97 by 2060, meaning every 100 working-age people will have to support about 97 children and elders.
While that number is a helpful reference point for Taiwan to make its long term plans, the term “dependency ratio” can be misleading in our times. The term stresses, based on current social conditions, the idea that retirees will require financial support (either through direct money gifts between family members or through pension funds), while the facts can be more complicated, especially during economic downturns.
The New York Times reported yesterday that the ratio of people 65 years old or older who told surveyors from Spanish pollster Simple Logica that they are supporting family members jumped from 15 percent in February 2010 to 40 percent two years later. With the unemployment rate set to hit 25 percent, the number of elderly Spaniards providing for three generations of family members is climbing.
“Some experts say they believe that retired people, sharing their pensions and dipping into their savings, have been the silent heroes of the economic crisis, and that without them Spain would be seeing far more social unrest,” The New York Times reported.
The dependency model is based on the social experiences of what seems increasingly like a bygone era. Adam Smith identified dependency ratio as “the proportion between the number of those who are employed in useful labor, and that of those who are not so employed.”
The dependency ratio seems straightforward enough, but here is the rub: The meaning of “those who are employed in useful labor” differs from society to society. In an agricultural society, it points to people firm enough to work on the fields. In a developed economy such as modern Taiwan, the phrase mostly refers to middle-aged people with advanced degrees or professional training to work in specialized jobs.
However, in a country with a 25-percent jobless rate (and a youth jobless rate much higher than that), it is difficult to pinpoint people employed in “useful labor.” The popularity of pension funds and personal retirement plans also means that in strange economic times, people with no apparent qualities for “useful labor” can actually be the providers, not the dependents.
While Taiwan is not facing the same problem as Spain, the changes of macroscopic economic conditions, business culture and employment structure mean that the nation could face challenges other than what people are now expecting.
As the prospect of lifelong employment sinks in as the reign of underemployment rises (as corporations are increasingly hiring part-timers to cover what should be full-time jobs), the equation of usefully employed people to people of a certain age group is no longer straightforward.
There are, for example, already a significant number of those in Taiwan who would be classified as breadwinners depending on their elders. The growing popularity of NEETs (people “not in employment, education or training”), stay-at-home 30-year-olds and those who are married but still depending on parents for financial or childrearing support shows that Taiwan’s middle-agers are already tapping the resources of the elderly.
With good planning that does not have to be a bad thing. As the 60s are becoming the new 40s, the designated “aged people” could still have (quoting Rocky Balboa) “some stuff in the basement.” The increasing automation of the world also means that intelligence and experience, instead of physical strength, still can be important human resources. The true challenge for aged people in the future is probably the ability to overcome generational gaps and to stay up-to-date.
An increasing birthrate is vital for any country (and in fact any species). But the Taiwan government should change the doomsaying mindset and start to plan for the inevitable.
(The China Post (Taiwan))
