The Business of Ageing

Far from my post on Friday being a lonely voice calling
vainly into the wilderness, it turns out that the Ministry of Social Development
here in New Zealand has also been turning its mind to the issues of our ageing population.
It has recently released a report entitled “The Business of Ageing: Realising
the Economic Potential of Older People in New Zealand 2011-2051”.  The purpose of the report is to highlight the
potential contribution of retirement aged people to the New Zealand economy; to
encourage the employment of “mature workers”; and to change attitudes about

The report has not come a moment too soon, with the first of
the baby boomers (the generation born between 1946 and 1964) reaching
retirement age this year.  In New Zealand
there are reasons for thinking that this will have a greater impact than in other countries.  First, the
post-war surge in population was more dramatic here than in most other countries –
the birth rate was 4.2 children per woman in New Zealand compared to 3.6 in
Australia for example.  Secondly, New
Zealand suffers from losing so many of its young educated people to the lure of
greener, more lucrative pastures overseas. According to one economist, in 2010
nearly one-quarter of New Zealand’s graduates lived overseas.  In Australia, the comparable figure is only one-tenth
of that.

Today, the number of those aged over
65 is 13% of the population. By 2051, that number is expected to be 23%. While
in 2006 there were 5 people aged 15-64 in New Zealand for every person over the age of 65, by 2050 that ratio is
expected to have declined to 2-1. 
(However, these numbers do not make much sense to me. If those over 65 are 23%
of the population in 2051, then that means there will be around 46% of the
population aged 15-64.  Which leaves 31%
of the population made up of those aged under 15.  In the 2006 census that number was about 21%,
so how is that number arrived at except for a sudden increase in fertility?)  With fewer young people coming into the
workforce from this year the total workforce size is expected to decline.  This means that any growth in the economy is
going to have to come from productivity increases.

The recommendations of this report are essentially twofold –
first to encourage more people reaching retirement age to stay in employment.  This is already happening to a degree. While
only 6% of those aged over 65 were working in 1991, in 2006 that figure had risen to
12%.  To continue this trend, the country
needs to make workplaces friendlier for older workers.  This means more flexible work arrangements
and addressing discrimination and poor health.  The second recommendation is to realise that
the baby boomers will be a wealthy consumer market that businesses need to tap
into.  Baby boomers will be healthier,
better educated and have more purchasing power than any other generation
reaching 65 in New Zealand’s history.  While those aged over 65 will spend $10.9
billion this year, that is expected to rise to $45 billion in 2051, with a corresponding rise in the amount of goods and services tax that they pay. This is a
potential market that business should be aware of and cater to.

This is a report that shows that some in high places are
trying to wrestle with this pressing problem in New Zealand. (Despite the Prime Minister
ruling that a rise in the retirement age is not an option.) So what do you
think about it? For those of you reaching retirement age, or are there already,
what barriers do you see that should be removed so that it is more attractive
to remain in the workforce? 


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