In October, the Center for Strategic and International Studies, a Washington think tank, debuted its Global Aging Preparedness Index, ranking both the fiscal sustainability and the adequacy of government benefits for the elderly. Canada was in the middle of the pack in both categories, ninth and 11th respectively. France, Spain and Italy were judged to be in an even deeper hole than the U.K., Japan or the U.S.: facing not just debt problems, but spiralling pension and health care costs, as well as some of the lowest birth rates in the developed world. India, with a relatively young population, meagre benefits, and close to 83 per cent of its elderly citizens already living with their children, looks best prepared for the coming storm.
But surely, the best-educated generation in history, not to mention the trailing Gen X, Y and the millennials, must understand all of this: how precarious the global situation already is, and the dangers facing Canada. How we all must prepare. Seemingly not. Household debt in this country reached $1.41 trillion last December, according to a study by the Certified General Accountants Association of Canada, about 2.5 times greater than the 1989 amount. The personal debt-to-income ratio reached a new record high of 144.4 per cent at the end of 2009. And 43 per cent of Canadians admitted to being concerned about their retirement, yet 32 per cent were committing nothing to savings or RRSPs. (Not surprisingly, young people, trailing school loans and other debts, save the least, with only 19 per cent putting 10 per cent or more of their earnings away, according to a different 2009 survey.)
And many of us are either too scared, or stupid, to even risk reading the tea leaves. Close to half of respondents to a new national retirement survey by Bensimon Byrne, a Toronto ad agency, said they had not yet calculated how much income they will receive when they stop working. But 86 per cent said they expected CPP, and 83 per cent Old Age Pension, to be crucial pieces of their financial puzzle. And 77 per cent are counting on eventually selling their house or condo to finance their golden years.
A capital idea. But what happens when millions of boomers all start selling off their homes to the far smaller and less wealthy generations working their way up the food chain? The baby boom generation who “have driven up housing demand and prices for three decades” could have the opposite effect once their mass sell-off commences, Dowell Myers, a University of Southern California demographer, wrote in a 2008 examination of the “generational housing bubble.” Crunching the numbers state by state, he concluded that the current subprime-inspired meltdown may well pale in comparison to what lies ahead: lots and lots of sellers, far fewer buyers, and a two-decade long slump. “Whereas the major housing problem was once affordability, it could now be homeowners’ dashed expectations after lifelong investment in home equity.” The study won a prize from the American Planning Association.
Experts in Canada tend to be more optimistic about the fate of the domestic real estate market, but in a country where close to 40 per cent of personal wealth is now tied up in home ownership, even a small price drop could have drastic consequences. Boomers may have big dreams about retirement in sunny climes, or riding their Harley Davidsons into the sunset (the average age of U.S. motorcycle riders is now 47, up seven years since 2000), but they certainly haven’t figured out how to pay for it all. A recent TD Bank survey found that just 44 per cent of Canadian boomers have actually paid off their mortgages. And among those who haven’t, a quarter still had 75 per cent or more of the debt left to pay down.
The cover of the October edition of The Atlantic features a cartoon of Doonesbury’s Zonker—a blissed-out hippie for 40 years and counting—rolling up his sleeves as the sun sets in the background. “The boomers’ last chance,” promises the sell for the story by Michael Kinsley. Part generational apology “for ruining everything,” and part call to arms, the piece suggests he and his contemporaries have just “19 years to redeem themselves.” Kinsley’s big idea—offering the next generation a fresh start by reducing the national debt, massively investing in education, and repairing America’s crumbling infrastructure—sounds nice. Although in true boomer fashion the “extraordinary historic” fix he proposes—flat taxing the inheritances they are about to receive from their parents, and might reasonably have been expected to one day pass on to their own kids—somehow misses the point. Net cost to his “self-absorbed, self-indulged, and self-loathing” generation? $14 trillion of somebody else’s money.
A truer indication of the kind of battles that boomers are girding to fight can be found in the news pages: a growing movement to enrich, or even double, Canada Pension Plan benefits, via substantially higher premiums for businesses and the ever-shrinking work force. Or last week’s decision by the Canadian Human Rights Tribunal reinstating two Air Canada pilots who were forced, under company rules, to retire from flying at age 60. “This will be welcome news for all Canadians that one more element of age discrimination has been undone,” proclaimed Susan Eng, vice-president of advocacy for the Canadian Association of Retired Persons (CARP). “The decision is especially important for those people who must stay in the labour force for economic reasons or simply for the dignity of work.”
Boomers seeking to extend their careers—by any means necessary—is a growing trend. Substitute teaching, once a way for young education grads to get into the profession, is now dominated by retired “double-dippers” collecting both a teacher’s pension and a paycheque. Law firms in the U.S. are redrawing policies that forced older partners out in the aftermath of two high-profile age discrimination lawsuits, and greying Bay Street hotshots are now quietly pushing to remain at the top of their profit pyramids for longer. Whatever the reasons—debt, divorce, pride—baby boomers are serving notice that they don’t want the gold watch and farewell parties they foisted on their elders. The Bensimon Byrne survey found that 62 per cent of Canadians between 50 and 64 expect they’ll continue to work full or part time after hitting “retirement” age.
Recent graduates already at a disadvantage from the recession (a study by Canadian economists found it can take up to 10 years for those who enter the workforce during bust times to catch up on wages) could face even more challenges. That’s an already well-established pattern in Europe where the youth employment rates and standards of living are significantly lower now than just a generation ago. French sociologist Louis Chauvel has even coined a term for such unfortunates: “babylosers.”
The defining characteristics of the baby boomers have been their sense of self-importance and limitless entitlement. And Kinsley’s plea aside, there is little reason to expect that will change any time soon. If anything, it’s getting worse as they age. “The yuppies have become the grumpies,” says Frank Graves, president of EKOS Research. “They’re reluctant to give anything up. It’s like Charlton Heston: ‘From my cold, dead hands!’ ”
In the recent U.S. mid-term elections, boomer angst and anger fuelled the rise of the Tea Party and right-wing Republicans. And in Canada, suburban boomers—generally less educated and less well off than their downtown compatriots—form the base for Stephen Harper’s Conservatives, and every-schlub Rob Ford’s hostile takeover of Toronto City Hall. As perhaps their final legacy, boomers are dominating politics the same way they have transformed every other aspect of our society. To be sure, politicians share the blame for cynically playing to them. But it can’t last forever. At least, not unless somebody rediscovers Ponce de Léon’s fountain of youth.
“In five to 10 years we’re going to start seeing a different Canada emerging,” predicts Graves. Younger Canadians who don’t vote now will start turning out in numbers as they age—but without the traditional party allegiances. (Ekos’s surveys consistently suggest under-25s would elect a Green party majority.) Gen Y, who according to a study by a University of New Hampshire management professor score even higher for entitlement and narcissism than their parents, will slowly take over. And the concerns of boomers will start becoming less and less important, just like their position in the consumer markets they once dominated. “Unless they’re buying Viagra or upright bathtubs, nobody cares anymore,” says Graves.
And the truth is, the brewing war between generations will feature more clashes around conference tables than riots in the streets. Hallmark programs like old-age pensions and health care are too important to young and old alike to let wither and die, so fixes will eventually be found. American journalist Ted Fishman, the author of the new book Shock of Gray, says an aging society presents a lot of other changes that we should be worried about, like soaring rates of road accidents, depopulating suburbs and denser downtowns as seniors cluster closer together, and the stresses for young people who will be balancing careers, families and the care of their elders.
Greying populations aren’t just a European or North American problem, they are now a global phenomenon. “You can’t escape from it anywhere in the world,” says Fishman. As boomers have gotten older, and more expensive to employ, our search for cheaper labour and goods has created a “feedback loop” in the developing world. China, with its “21st-century urban industrial wonderlands filled with young people siphoned out of the countryside,” is now aging faster than any place on the planet, he notes. The combination of rapidly growing cities, better wages and higher educational aspirations are shrinking families worldwide.
The real paradigm shift might be in learning to view this inexorable greying of the globe as a good thing, rather than a problem. “On balance it’s all overwhelmingly positive,” says Fishman. “An aging world happens because people live longer, and because women can achieve their aspirations and don’t have time for big families. We’ll be investing much more in the well-being of the kids we do have, their feeding and education. They’re the pillars for future economic development and prosperity.”
Now all we have to do is convince the boomers that it’s finally no longer all about them.
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