Friday, December 14, 2007

Demographics—Driver of Change and Crippler of Society

Thinking about the future in Canada is very troubling for me for any number of reasons.

My grandson is just one year old. And I hope to have many other grandchildren. In 2040, just about the time my grandson would be getting himself seriously established in the workforce, about 25% of Canadians will be over 65 years old and a seriously diminished number of working Canadians will have to support them.

The strains and stresses produced by these dynamics stagger my imagination. We are committing social and political suicide.


Demographics—the driver of change

This is the time of year media types like myself dust off the crystal ball and take a look into the future but there seems to be a lot of no go zones when it comes to looking at some of the most serious issues impacting society.

A great case in point is the massive demographic shift that every Western nation including Canada is undergoing. It's a phenomenon that is already having a profound impact on healthcare, immigration, employment trends and business yet my bet is that if you review all the broadcasts or columns talking about major trends in the next month you'd be hard pressed to find more than a couple that mention demographics.

Every once in a while I try a sell demographics as the most important subject we ignore, especially when it comes to the healthcare debate but given that the aging population plus falling birth rates in Western nations is arguably the most important driver of change in our society you'd think it would rate more attention.

Ten years ago David Foote had a best seller entitled, Boom Bust and Echo and last year Mark Steyn focused on falling birth rates in his best seller America Alone but the subject doesn't capture the imagination in the same way as things like global warming, a bird flu pandemic, the substance abuse probelms of Britney Spears or the death of Anna Nicole Smith. Yet scratch the surface of so many recent news stories from Muslim riots in the outskirts of Paris to the financial woes of General Motors and you'll find demographics play a pivotal role.

In the last year the news was full of stories on care for seniors, falling school enrollment, meagre economic growth in much of the western world, cultural assimilation in Europe and healthcare financing, which are all driven by demographic trends.

Unfortunately politicians don't want to touch the subject because any talk of adjusting government spending is political suicide. When newly elected French President Nicolas Sarkozy suggested changing public sector pension to bring them in line with private ones transit workers went on strike for a week in November. Across the western world the "me generation" has made it clear that they won't tolerate any changes to the welfare grab in spite of the fact that actuarial accountants make clear the current system is unsustainable.

In Canada, our birth rate of 1.48 is far under the level to sustain the current population, which would require a rate of 2.1 yet few seem to talk about the consequences. In Japan and parts of Europe the trend is already further along with the past year showing already more deaths than births.

Since Canada's valued social programs were created in the 1950s and 1960s, our birth rates have declined and our mortality and mortality rates have decreased. In the mid fifties 39.4 percent of the population was under 20 while 7.7 percent was over 65. By 2004, the numbers had changed dramatically with the under 20 proportion dropping to 24.6 percent of the population while those over 65 increased to 13 percent. The kicker is that by 2040 the under 20 will have dropped to about twenty percent while the over 65 crowd will make up nearly a quarter of the population.

Simply put those are not the projections that our programs were predicated on. Something has to give and "that something" is what all serious commentators on our future have to focus on.

The question becomes how are we going to handle the problems. Are we going to cut benefits, raise the retirement age of entitlement, loosen immigration rules or simply implode because we didn't address the issue soon enough? Continuing to ignore the problem only guarantees the disruptions the demographic shift cause will be greater.

Let an honest debate begin.


h/t Free North America

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