In a recent podcast, author Bradley Schurman discussed his book, Super Age: Decoding Our Demographic Destiny, and the consequences of the upcoming Super Age, where the world's population reaches 10 billion and one out of five Americans will be over 65. Schurman explored the demographic dystopia we could face if we don't make necessary adjustments and what can be done to prevent it.
Here's what he had to say in a recent must-listen interview on FS Insider (see Book Interview: The Super Age: Decoding Our Demographic Destiny for audio):
“The Super Age is a coming period for American society where one out of five people will be over the age of 65. Now, this may not sound like a big change in our society, but it's the first time this has ever happened. And the United States is joining a very small club of countries around the world in this new era. For us, we enter in 2030. And this new era will portend a number of unique challenges for us, because it's not just the aging of the population that's occurring here with more people over the age of 65. It's just that we're having fewer babies, too. And this will have direct implications for all of the social welfare programs and issues like inflation.”
A First in Human History
Schurman explained that the Super Age is a first in human history and is quite momentous. Historically, old age was not new, but few people reached it due to high infant and youth mortality rates. With the Industrial Revolution, access to clean water, vaccines, and education, birth rates dropped while life expectancy increased, enabling more people to reach old age. The post-World War II baby boom also contributed to the aging population that we see today.
“All of a sudden, thanks to clean water, pure foods, access to vaccines and medication, taking kids out of the factories and the fields and putting them in schools…all these children survived into adulthood and the global population just explodes. Then to add on to that, we have this baby boom, this anomaly of increased number of births. 76 million people in this country alone come into the world. There are still about 70 million boomers living today. That is revolutionary. That is beyond belief. And they're still having a major impact on our society today for better and for worse.”
Schurman discussed the challenges the Super Age poses for social welfare programs, healthcare systems, and the economy. Inflation, strained resources, and an increasing dependency ratio are just some of the issues society will face as the number of people over the age of 65 continues to rise. Schurman highlighted that rural areas, in particular, are at the forefront of this demographic shift, with many already experiencing the effects of an aging population.
“If we stay the course, which is what we're currently in right now, no adjustments to Social Security, no adjustments to Medicare, no rethinking of the social contract, regular bouts of ageism that appear in the workplace, in the community, even at home, even in our daily lives towards ourselves, we are putting ourselves at risk of calamity. And there is no better way to see this than to travel across the heartland of America. When you visit many of these small rural towns across this country, you'll see what the ravages of demographic change can bring. Rapid depopulation, the loss of industry, the loss of commerce, the loss of a basic social safety net. It is scary. And it's really scary because in our history, at least in this country, sure, we've had things like ghost towns, we've had boom towns that have popped up and they become ghost towns eventually, certainly around things like the gold rush or the silver rush out west. This has happened before, but not at this scale, not at the scale that we're currently approaching and in which many counties are entering into now, if not already there.”
The New Demographic Order
Schurman emphasized the need for adjustments and innovation in the face of these challenges. He shared that a new generation of scientists, entrepreneurs, and investors are now focusing on extending human life by treating aging as a disease rather than a natural process. This paradigm shift has the potential to slow cellular aging, regenerate cells, and even organs, further increasing life expectancy.
One of the most significant adjustments needed is for individuals to work for longer periods. Although the idea of retirement is relatively new, working until we physically can't has been the norm for most of human history. By staying economically engaged, we can bolster the economy and improve our health outcomes. Additionally, Schurman suggests rethinking the social welfare system, offering incentives for medical professionals to work in rural areas, and considering auto-enrollment programs for retirement savings.
“The single greatest thing we can do - and, in fact, we're starting to see it happening in areas that are approaching super age or are already in super age - is to have individuals working for longer periods of time. Now, saying that makes people grimace. They get frustrated with that as a solution. But the reality is that for most of human history, we worked until we couldn't. This idea of retirement is relatively new. In fact, in this country, it's only been around since 1935, less than a hundred years against the backdrop of…10,000 years of human civilization. We've never had a universal pension and we do now. We have a universal safety net. But all things, including social welfare and social welfare policy, they have to adapt with the times. They have to keep up with the modern era. And as I think I make clear in the book, what's unique about this period is that a 65-year-old that exists today looks almost not at all like a 65-year-old in 1935.”
Rethinking Social Welfare
Schurman pointed out that the government has a significant role to play in averting a demographic dystopia. This includes rethinking social welfare, stimulating innovation in the longevity economy, and protecting people in the workplace by promoting age diversity and inclusivity. Although current political leaders are living examples of the Super Age, they need to better contemplate the average person's experiences and implement policies accordingly.
One of the key points Schurman emphasized was the lack of political willingness to address the challenges posed by an aging population. He suggested that improving financial literacy among older individuals could help mitigate some of the negative consequences of early retirement. Many people are unaware that delaying retirement can result in a more comfortable financial situation, and this is an area where the government can make a significant impact.
“We have to make sure that people who are living in rural communities have better access to healthcare, better access to economic opportunity. Over the past 10 years or so, I think we're at now, over 100 hospitals have closed. Most of them have closed across the rural landscape. The doctors, the nurses that live in these areas are quite old. They're either at or past retirement age, traditional retirement age. Not to say they shouldn't continue working, but quite a few bowed out during COVID. The government can offer incentives to individuals to move to these areas to help support the people that are living there. But more than anything else right now, what the government can and should be doing is rethinking the social welfare system.”
What We See in China
Schurman also highlighted the dramatic demographic decline in China. The United States' steady influx of immigrants provides a buffer against such population losses, while China faces a more challenging future. With an overbuilt housing market and a shrinking workforce, China's economic downturn could have a global impact, potentially leading to higher prices for goods and increased inflationary pressure.
“What's happening in China is really dramatic… In 2021, according to their national statistics, they lost 850,000 people, a population roughly the size of San Francisco. They are not turning around their demographics anytime soon…
By the end of this century, it's projected that China will lose a population roughly the size of North America. Now, I don't know about you, but can you imagine North America just being wiped off the map? It's hard to contemplate.
For us, we need to be paying very close attention to this, especially those of us who are watching our portfolios. Most of us have a long enough memory to consider what it felt like during the subprime mortgage crisis when we saw loved ones, friends, and family have their 401ks wiped out. They had to extend their working lives by another five or ten years because of this really almost calamitous event.
China's current real estate situation makes that look like child's play because they simply have overbuilt housing to such an extent that they have over 60 million empty housing units. They have no population coming up to fill them. In fact, if they wanted to fill them tomorrow, they'd have to move the entire population of France.”
In "Super Age," Schurman delves into the wide-ranging impacts of an aging population on various aspects of society, from the economy and trade to geopolitics. Understanding and addressing these challenges will require awareness, critical thinking, creativity, and innovation, as well as the willingness to learn from both the successes and failures of other countries.
As we navigate the uncharted territory of the Super Age era, Schurman's insights during the podcast conversation provided valuable context and understanding. The future depends on our willingness to adapt and explore innovative solutions to accommodate an aging population, and Schurman's book offers a comprehensive guide for facing the demographic destiny that awaits us.
To listen to this full audio interview, see Book Interview: The Super Age: Decoding Our Demographic Destiny or, if you’re not already a subscriber to our FS Insider podcast, click here to subscribe.