The Silver Lining in America's 'Grey Tsunami': How an Aging Population Could Empower Women and the Economy

The Silver Lining in America's 'Grey Tsunami': How an Aging Population Could Empower Women and the Economy
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According to the Census, more than one in five (twenty per cent) Americans will be over the age of 65 by 2030 - a 'Grey Tsunami' poised to shrink the workforce and disrupt America's vulnerable healthcare and social services systems. Although the threat is critical, it presents America's next president with a remarkable economic and civil rights opportunity: give women equal career opportunity through sensible family-support policies, and thereby reverse population aging and increase economic growth.

An aging population is a natural consequence of increased life expectancy coupled with dwindling fertility rates. Countries like Japan are facing population pyramids that are upside-down. Even though America's case is not nearly as dire, the pyramid is losing its shape. The oft-quoted immigration solution is necessary yet insufficient; it is also a zero-sum game that cannot work forever. As developing nations advance, incentive for their citizens to leave diminishes, and they begin to suffer their own demographic squeeze.

Women are the key to it all. Providing working parents with adequate benefits to raise children will improve fertility rates while dismantling a major barrier women face in pursuing successful careers - a value-creating & sustainable solution. An OECD study recently estimated that closing the labour force gender gap could yield a potential gain of twelve per cent (or roughly $10 trillion) to the size of the total economy by 2030 on average across OECD countries. In a recent interview, subject expert Lotte Bailyn (Professor of Management at MIT) explains "Children aren't just an individual choice; they're a social good... The fate of the economy and the fate of families are deeply connected." Despite this, she says "family policies in the U.S. are the weakest of any industrial country". Not only does this supress fertility rates, it forces many women who have children to take long gaps from employment or choose part-time work - resulting in poor career prospects for them & squandered potential for the economy writ large.

While the US and many OECD countries have failed, Norway has established policies that deserve our attention. Through the right incentives, Norway has raised its fertility rates from 1.74% in the 1970s to 1.9% today and some 83% of women with young children are employed. Innovative policies such as non-transferable paternity leave, for example, are crucial because they allow mothers to go back to work without a long gap that can damage their careers. In fact, Pew Research Center found that longer [transferable] parental leave is linked to a higher wage gap because it was mothers who 'opted' to stay at home. Parental leave for employed mothers and fathers in Norway is paid for by public budgets and has been extended from 12 weeks three decades ago to 47 weeks today.

Both Democrats and Republicans should recognize they have an opportunity to unlock the power of working American women and bolster the economy. Even anti-big government and spendthrift politicians would find it hard to oppose policies that lead to a stronger workforce which would generate higher tax revenues. Giving women equal opportunity to pursue careers increases the size, as well as the productivity of the workforce. Whereas choosing from a pool of labour where nearly half the potential talent is disadvantaged will yield a suboptimal workforce where women are underrepresented, particularly in top positions in business and government. This is our world today; it need not be tomorrow.

There is global momentum for change. Last November, the leaders of the G20 pledged to work towards a more gender-balanced economy by reducing the gap between female and male participation in the workforce by 25 per cent over the next ten years. However, the unfortunate timing of this pledge coincided with the worldwide preoccupation with Vladimir Putin's intervention in Ukraine. Luckily, the great silver lining to this wicked problem is that it does not require a global solution. All states have an incentive to vigorously pursue these policies for selfish reasons. By reversing the dwindling fertility rate while increasing the quantity and quality of the workforce, a state will increase its productivity and competitiveness in the global market. If the G20 achieves its goals, we would see 100 million women enter the workforce by 2024, raise world GDP by trillions of dollars, and facilitate equal economic opportunity to a group that's endured the longest run of discrimination in human history.

In 1869, J.S. Mills concluded that the oppression of women was one of the few remaining relics from ancient times. We've come a long way since then - why stop now?

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