The Economics of Nuclear Weapons
The recent India Pakistan skirmishes have brought the issue of a nuclear Armageddon to the forefront of international politics. The news channels in both countries, as well as the international media, have been discussing the possibility of the situation escalating into an all-out nuclear war. The question of the futility of such a war has […]
Impact of Business Process Re-Engineering and Improvements
In the new world that is fast changing with rapid advances made in science and technology and shrinking borders, the academicians have had to discard the old theories of Management and rewrite the rules all over again. Bet it the marketing principles, human resource management or business processes, every topic needs to be redefined and […]
Smart Cities – What they are, How Realistic are they, and what can be done
What are Smart Cities and How They Have the Potential to Revolutionize Urban Living We often hear the term Smart Cities mentioned in the media. We also come across excited business leaders and politicians as well as urban planners and members of think tanks breathlessly talk about how Smart Cities would transform the way we […]
Introduction to Intellectual Property Rights
Intellectual Property Rights (IPR) safeguard the creations of the mind, offering legal protection to inventors, artists, and businesses for their innovations, designs, and works. When individuals and businesses know their work is protected, they are more likely to invest time, resources, and energy into research, development, and innovation. This cycle of protection and creation benefits […]
Phases of ERP Implementation
Like any other project, ERP implementation goes through various interconnected phases. These phases may be sequential but at occasions overlap. Normally, every phase has entry criteria, which needs to be fulfilled before the commencement of the phase. A phase is deemed to have completed when pre-determined deliverables are achieved. Various phases of ERP implementation, for […]
The term shock of gray refers to the phenomenon of the western societies having older people as a percentage of the total population than the younger people. in other words, the shock experienced by having more retirees and those over 70 years of age and the graying of the population are expected to impact western countries drastically as far as caring for them and providing sustenance is concerned.
For instance, not only do the governments of the western countries have to ramp up on the Medicare expenditure they would also need to provide the necessary infrastructure to ensure that these elderly citizens are looked after properly. The longer-term care would also mean that hospice services, day care services, and old age homes have to be built for these people. After all, they have contributed to society in their prime and therefore, it is the duty of the governments to care for them in the autumn of their lives. As we shall discuss in detail in subsequent sections, the graying of the population entails severe adjustments by the governments of the west.
As mentioned earlier, the US, UK, and Europe have to significantly increased their healthcare expenditure to cater to the senior citizens and the elderly. This means that the existing healthcare systems have to be ramped up to cater to the elderly and this includes provision of medical personnel, paramedical personnel, and nursing assistants and domestic helps to the senior citizens.
The United States has to also increase its budgetary allocation for Medicare and Medicaid, the two programs that are part of the social security net in the country to take care of the elderly. These entitlements would drain a lot of money and this is where the government has to do a balancing act between caring for the elderly and budgeting for the expenditure in a manner that does not leave out the present and future generations.
Further, the UK has to fund its NHS or National Health Service to bear the load that is expected with so many senior citizens. This imposes additional burden on the already overworked NHS staff and this represents a major challenge for the British. Apart from these aspects, the UK and the US would also have to contend with rising medical costs and as these countries include the elderly in their social security net, they have to plan for the ageing population accordingly.
Ageing societies affect the economies of the west in ways other than budgeting for healthcare costs. For instance, the fact that many Baby Boomers or those born in the immediate aftermath of the Second World War are retiring now and this means that companies, corporations, and the US government have to contend with the double whammy of rising healthcare costs and declining contributions from these retirees to the economy.
The companies have to payout the pensions and the lifetime healthcare insurance policies as well as pay them their 401(k) benefits that are part of the defined benefits and defined contributions aspect.
Further, ageing societies also mean that the present generation has to work harder to make up for the lack of the retirees contributions.
However, this is a blessing in disguise, as the current generation will have the option of choosing from more jobs that are available because of the retirement of the boomers. Of course, it is a fact that many Baby Boomers are putting off retirement as the current global economic crisis has made life tough for everyone.
The point here is that the ageing of the western societies has several implications for the economies of the west in terms of conflicting and intersecting trends.
Your email address will not be published. Required fields are marked *
What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
