Spring 2011

Aging in the Americas

Jason L. Powell

University of Central Lancashire




The aim of this article is to analyse the expansion in the proportion of older people across the Americas, and to highlight the main social and economic forces causing this.  

Indeed, there is little doubt that the rapid increase in population ageing across the globe is signalling some striking demographic changes (Gruber and Wise 2004). Amongst policy makers, there is concern about population aging and its consequences for nation states, for sovereign governments and for individuals (Estes, Biggs and Phillipson 2003). The United Nations estimates that by the year 2025, the global population of those over 60 years will double, from 542 million in 1995 to around 1.2 billion people (Krug, 2002:125). The global population age 65 or older was estimated at 461 million in 2004, an increase of 10.3 million just since 2003. Projections suggest that the annual net gain will continue to exceed 10 million over the next decade—more than 850,000 each month. In 1990, 26 nations had older populations of at least 2 million, and by 2000, older populations in 31 countries had reached the 2 million mark (Chen and Powell, 2011). UN projections to 2030 indicate that more  than 60 countries will have at least  2 million people age 65 or older.

While today's proportions of older people typically are highest in more developed countries, the most rapid increases in older populations are actually occurring in the less developed world (Krug 2002). Between 2006 and 2030, the increasing number of older people in less developed countries is projected to escalate by 140% as compared to an increase of 51% in more developed countries (Powell 2011). A key feature of population aging is the progressive aging of the older population itself. Over time, more older people survive to even more advanced ages. The forecast rise in the number of older people aged 75+ over the next 20 years will lead to an expansion of demand for health, housing accommodation and pensions for aging populations and is thus of crucial importance for governments, policy makers, planners, and researchers in all nation states. On a global level, the 85-and-over population is projected to increase 151% between 2005 and 2030, compared to a 104% increase for the population age 65 and over and a 21% increase for the population under age 65 (Bengston and Lowenstein 2004). The most striking increase will occur in Japan: by 2030, nearly 24% of all older Japanese are expected to be at least 85 years old. As life expectancy increases and people aged 85 and over increase in number, four-generation families may become more common (Powell 2011).

The age structure of the population has changed from one in which younger people predominated to a global society in which people in later life constituted a substantial proportion of the total population (Powell, 2005). Transformations in the age profile of a population are a response to political and economic structures. Older people in particular constitute a large section of populations in western society in particular but the percentage of pensionable age is projected to remain at 18% until 2011 when it becomes 20% and rising to 24% in 2025 (Chen and Powell 2011).


At the same time, there is a stigmatisation of such increasing populational numbers by agist stereotypes. In relation to public services that have to be paid for by ‘younger’ working people, the percentage of the population has been used to signify such ‘burdensome’ numbers by the State (Estes, Biggs and Phillipson 2003). Dependency rates, that is the number of dependants related to those of working age, have in fact altered little over the past 100 years. The reason there has been so little change during a period of so called rapid aging populations is that there has been a fall in the total fertility rate (the average number of children that would be born to each woman if the current age-specific birth rates persisted throughout her child-bearing life).

In advanced capitalist or First World countries, declines in fertility that began in the early 1900s have resulted in current fertility levels below the population replacement rate of two live births per woman. Perhaps the most surprising demographic development of the past 20 years has been the pace of fertility decline in many less developed countries (Giddens 1993). In 2006, for example, the total fertility rate was at or below the replacement rate in 44 less developed countries (Cook and Powell, 2007). Most of the more developed nations have had decades to adjust to this change in age structure. For example, it took more than a century for France's population age 65 and over to increase from 7% to 14% of the total population. In contrast, many less developed or Third World countries are experiencing rapid increases in the number and percentage of older people, often within a single generation. The same demographic aging process that unfolded over more than a century in France will occur in two decades in Brazil (OECD 2007). In response to this compression of aging, institutions must adapt quickly to accommodate a new age structure. Some less developed nations will be forced to confront issues, such as social support and the allocation of resources across generations, without the accompanying economic growth that characterized the experience of aging societies in the West. In other words, some countries ‘may grow old before they grow rich’ (Cook and Powell 2010).

Globalisation has also produced a distinctive stage in the social history of populational aging, with a growing tension between nation state-based solutions (and anxieties) about growing old and those formulated by global institutions (Powell 2011). Globalisation, defined here as the process whereby nation-states are influenced (and sometimes undermined) by trans-national actors (Powell 2010), has become an influential force in shaping responses to population aging. Growing old has, itself, become relocated within a trans-national context, with international organisations (such as the World Bank and International Monetary Fund) and cross-border migrations, creating new conditions and environments for older people. 
Ageing can no longer just be viewed as a 'national' problem but one that affects trans-national agencies and communities. Local or national interpretations of ageing had some meaning in a world where states were in control of their own destiny (Estes, Biggs and Phillipson, 2003). They also carried force where social policies were being designed with the aim or aspiration of levelling inequalities, and where citizenship was still largely a national affair (and where there was some degree of confidence over what constituted 'national borders') (Chen and Powell 2011). The crisis affecting each of these areas, largely set in motion by different aspects of globalisation, is now posing acute challenges for understanding ‘aging’ in the Americas in the twenty-first century. 
If these examples illustrate the complexity and impact of global ageing – then it may be pertinent to highlight how populational aging is impacting more specifically across different continents across the Americas. 


Aging Populations in the Americas


Since the turn of the last century, the life expectancy of people born in North America has increased by approximately 25 years and the proportion of persons 65 years or older has increased from 4% to over 13% (Estes and Associates 2001). By the year 2030, one in five individuals in the U.S. is expected to be 65 years or older and people age 85 and older make up the fastest growing segment of the population. In 2000, there were 34 million people aged 65 or older in the United States that represented 13% of the overall population (Estes and Associates 2001). By 2030 there will be 70 million over 65 in the United States, more than twice their number in 2000. 31 million people, or 12 percent of the total population, are aged 65 and older. In another 35 years, the elderly population should double again (Cook and Powell 2010). The aging population is not only growing rapidly, but it is also getting older:


‘In 1990, fewer than one in ten elderly persons was age 85 or older. By 2045, the oldest old will be one in five. Increasing longevity and the steady movement of baby boomers into the oldest age group will drive this trend’ (Longino, 1994: 856).


The percentage of oldest old will vary considerably from country to country. In the United States , for example, the oldest old accounted for 14% of all older people in 2005. By 2030, this percentage is unlikely to change because the aging baby boom generation will continue to enter the ranks of the 65-and-over population (Bengston and Lowenstein 2004). This is obviously causing much concern among policymakers but Longino (1994), for instance, believes that thanks to better health, changing living arrangements and improved assistive devices, the future may not be as negative as we think when we consider an aging population.


It will be different, however, not least because people currently divorced constitute a small proportion of older populations. This will soon change in many countries as younger populations with higher rates of divorce and separation, age. In the United States, for example, 9% of the 65-and-over population is divorced or separated compared to 17% of people age 55 to 64 and 18 percent of people age 45 to 54 (Manton and Gu 2001). This trend has gender-specific implications: in all probability nonmarried women are less likely than nonmarried men to have accumulated assets and pension wealth for use in older age, while older men are less likely to form and maintain supportive social networks.


Shoring up public pensions is hardly the only avenue nations in North and South America are exploring. In many countries, privately managed savings accounts have been strongly advocated (Estes and Associates 2001). Two decades ago, nearly every South American nation had pay-as-you-go systems similar to the US Social Security system. Some granted civil servants retiring in their 50s full salaries for life. Widening budget deficits changed that. In 1981, Chile replaced its public system with retirement accounts funded by worker contributions and managed by private firms. The World Bank encouraged 11 other Latin nations to introduce similar features. For example, in Chile the government addressed its fiscal budget deficit by mobilizing a $49 billion of pension-fund assets that make it easier for companies and corporations to fund investments in the local currency with bond offerings, and most workers have some retirement benefits from this (OECD 2007). At the same time, the downside has been those people who cannot afford a private pension have been left to a low state pension which has intensified poverty (Estes and Associates 2001); an enduring feature of all nation states in America. For the future, there is no safety guarantee that private pension schemes are protected and pay out for people who invest their savings in such provision. In a de-regulated US pension system, the issue of corporate crime has highlighted the continuing problem of private pension provision. In one example, this was seen clearly with the energy corporation of Enron’s embezzlement of billions of dollars of employees private pension schemes (Powell, 2005). This debate amounts to a significant global discourse about pension provision and retirement ages, but one which has largely excluded perspectives which might suggest an enlarged role for the state, and those which might question the stability and cost effectiveness of private schemes. The International Labour Organisation (ILO) concluded that investing in financial markets is an uncertain and volatile business: that under present pension plans people may save up to 30 per cent more than they need, which would reduce their spending during their working life; or they may save 30 per cent too little - which would severely cut their spending in retirement (Phillipson, 1998; Estes, Biggs and Phillipson, 2003).


Holtzman (1997), in a paper outlining a World Bank perspective on pension reform, has argued for reducing state pay-as-you-go (PAYG) schemes to a minimal role of basic pension provision. This position has influenced both national governments and transnational bodies, such as the International Labour Organisation (ILO), with the latter now conceding to the World Bank's position with their advocacy of a mean-tested first pension, the promotion of an extended role for individualized and capitalized private pensions, and the call for Organisation for Economic Co- operation and Development (OECD) member countries to raise the age of retirement.


There is also the impact of (Intergovernmental Organizations) IGOs on the pensions debate in South America. The function of such arguments is to create a climate of fear, of inevitability and scientific certainty that public pension provision will fail. In so far as this strategy succeeds it creates a self-fulfilling prophecy. If people believe the 'experts' who say publicly sponsored PAYG systems cannot be sustained, they are more likely to act in ways that mean they are unsustainable in practice. Certainly, in Europe and elsewhere, the state pension is an extremely popular institution. To have it removed or curtailed creates massive opposition. Only by demoralising the population with the belief that it is demographically unsustainable has room for the private financiers been created and a mass pensions market formed.


Increasingly, the social infrastructure of welfare states is being targeted as a major area of opportunity for global investors. The World Bank has expressed the belief that the public sector is less efficient in managing new infrastructure activities and that the time has come for private actors to provide what were once assumed to be public services. This view has been strongly endorsed by a variety of multinational companies, especially in their work with the World Trade Organisation (WTO). The WTO enforces more than twenty separate international agreements, using international trade tribunals that adjudicate disputes. Such agreements include the General Agreement on Trade in Services (GATS), the first multilateral legally enforceable agreement covering banking, insurance, financial services and related areas (Estes, Biggs and Phillipson, 2003).





As a consequence of the global dynamics of aging, the changing Americas of the post millennium are being confronted with quite profound issues relating to illness and health care, access to housing and economic resources including the retirement experience and pension provision. If demographic trends continue to escalate by 2050 the number of older people globally will exceed the number of young for the first time since formal records began raising questions of the power of the Americas in the context of global aging, and raising further global questions of distribution of power and scarcity of resources to an (global) aging population.



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Spring 2011