Good Question: Can the US Support 75M Retirees?

[daylatedollarshort]

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Originally Posted by Hamlet We still have a huge unemployment issue, and people are seriously worried about not having enough workers for the future? I think that the world going forward is going to have a more or less permanent surplus of unskilled and semi-skilled labor. People who can improve on the increasingly automated systems that produce our goods and services will be in high demand, but only a small portion of the population is ever going to fit into that category. I think the big challenge facing us in the future is not how we get enough workers to produce everything, but how we deal with a society that doesn't actually need workers to produce everything.

A British think tank says the answer to this issue is to cut the average work week hours -

Cut the working week to a maximum of 20 hours, urge top economists | Society | The Observer

"Anna Coote, of NEF, said: "There's a great disequilibrium between people who have got too much paid work, and those who have got too little or none."

She argued that we need to think again about what constitutes economic success, and whether aiming to boost Britain's GDP growth rate should be the government's first priority: "Are we just living to work, and working to earn, and earning to consume? There's no evidence that if you have shorter working hours as the norm, you have a less successful economy: quite the reverse." She cited Germany and the Netherlands."

[HFWR]

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Originally Posted by Hamlet I think the big challenge facing us in the future is not how we get enough workers to produce everything, but how we deal with a society that doesn't actually need workers to produce everything.

For better or for worse, "we" continue to reproduce, continue to assume perpetual growth, continue to assume cheap energy, continue to assume "climate change" won't happen or can be mitigated...

On the other hand, many top-down solutions tried or proposed are ideologically motivated, and thus are often ineffective and expensive...

Hard to put that genie back in the bottle!

[2B]

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Originally Posted by photoguy We just let in more immigrants of working age. I think this would be very difficult to do in Japan but easy for the US.

If the only requirement is "working age," we will overflow with people wanting to get on our social services. There are hundreds of millions people in this world that exist on far less than what we give out in food stamps and other aid.

We have no shortage of unskilled, low skilled workers. Many seem to have decided that they can get by without being gainfully employed. We are short of skilled workers and innovators.

[NW-Bound]

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Originally Posted by Hamlet I think the article, and most of the people in this thread are starting with an assumption that we need more people working to provide the increasing goods and services that our retired folks will need. I don't think that assumption is correct. I think we have reached the point where automation and increasing productivity (and some outsourcing) are outstripping the ability of our economy to make use of the workers that are displaced by them. ... I think the big challenge facing us in the future is not how we get enough workers to produce everything, but how we deal with a society that doesn't actually need workers to produce everything.

While it is true that we can produce huge amounts of food with machinery, there are still a lot of works that need the human hand. Unfortunately, due to globalization, they do not pay a lot, and the jobs went overseas. For example, people like to play with iPhones, but working 8 hrs/day assembling them is no fun.

Anyway, when Japan gets to 1 retiree/3 citizens, and 1.08 workers/3 citizens, with the other 0.92 idle, that 1.08 worker is going to be very busy. He will have to grow food, drive delivery trucks, maintain the roads and infrastructure in general like water and power plants, fix people's house plumbing, doing electrical repair, then have to find spare time to change the elderly's diaper. I would hate to be that guy.

[Hamlet]

I think a larger and larger share of our work will be automated as we go on. Sure, globalization took some jobs, but not as many as it looks like. IPhones are currently put together by hand because China has been a source of almost free labor, but that is changing. Say that globalization ended and that we had to make our Iphones here. It wouldn't result in that many jobs. 1000s of Chinese putting Iphones together by hand would be replaced by 100s (or 10s) of people working in a modern automated factory.

ATM's replaced bank tellers. Automatic checkout lanes are replacing cashiers. The web replaced a large portion of customer service reps. You just need fewer and fewer people every year to do the same things.

If we honestly had a shortage of available labor, we would see rising wages, not multi-decade declines in real wages.

I'll worry about this demographic problem as soon as that guy in Japan starts seeing wage increases. They'll hit this problem (if it ends up being one) long before we will, so until I see that it is real there, I'm not going to worry about it here when we've got a decent sized portion of our population wishing that they could get a job at Walmart or McDonald's.

Quote:

Originally Posted by NW-Bound While it is true that we can produce huge amounts of food with machinery, there are still a lot of works that need the human hand. Unfortunately, due to globalization, they do not pay a lot, and the jobs went overseas. For example, people like to play with iPhones, but working 8 hrs/day assembling them is no fun. Anyway, when Japan gets to 1 retiree/3 citizens, and 1.08 workers/3 citizens, with the other 0.92 idle, that 1.08 worker is going to be very busy. He will have to grow food, drive delivery trucks, maintain the roads and infrastructure in general like water and power plants, fix people's house plumbing, doing electrical repair, then have to find spare time to change the elderly's diaper. I would hate to be that guy.

[NW-Bound]

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Originally Posted by Hamlet I'll worry about this demographic problem as soon as that guy in Japan starts seeing wage increases. They'll hit this problem (if it ends up being one) long before we will, so until I see that it is real there, I'm not going to worry about it here when we've got a decent sized portion of our population wishing that they could get a job at Walmart or McDonald's.

I do not live in Japan to have 1st hand experience, but the Japanese who are well-known to be frugal and great saver did their part in holding down inflation. Even so, as I reported in an earlier post, their minimum wage of US$17.5K only had the purchasing power of US$11.5K or 65% of that in the US, although there has been report of deflation in Japan for some time now.

The belt-tightening action of Japanese citizens has been financing their own deficit spending, but that is about to end. See the following article by Gary Schilling: As Japan Stops Saving, a Crisis Looms - Bloomberg. I guess they cannot go on scrimping while their living standard keeps decreasing.

Of course the US is a long way from that, but I am sure all developed countries will be looking at Japan while pondering their own fate.

PS. By the way, we do not see reports of homeless Japanese although they do exist. I guess despite being Westernized, the Japanese still have a closer family bond which results in a larger multi-generational household. That allows them to live with less. Per capita income of the US in 2012 was US$49,965, while that of Japan was US$46,720 which was equivalent to US$30K in purchasing power when accounted for the higher cost of living.

[Severinooh]

I want to applaud a previous blogger on this thread, in my business I run into so many good people who worked for the government in some fashion their entire lives. After retiring they rant and rave hysterically about the government and never come to the same rational observation that mickeyd finally realized. Just saying.

[Animorph]

Plenty of workers available for our nursing homes I guess.

[HFWR]

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Originally Posted by Animorph Plenty of workers available for our nursing homes I guess.

Happily employed, we hope...

[bUU]

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Originally Posted by Hamlet I think the big challenge facing us in the future is not how we get enough workers to produce everything, but how we deal with a society that doesn't actually need workers to produce everything.

Excellent analysis.

[imoldernu]

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Originally Posted by NW-Bound Yes, we need more geezers to be healthy enough to be beach bums. And hopefully, when it's time for these active geezers to "go", they go fast.

Trying....