Ageing US population brings opportunities for Jamaica
THE population of developed countries is ageing rapidly as people in those affluent societies live longer as a consequence of good nutrition and better health care, as well — a drop in the birth rate, reflecting more women in the workforce and the desire for fewer children.
These twin trends have resulted in a major demographic shift in population structure with a higher percentage of these populations being over 60 years of age and a lower percentage of working age. Indeed, in some countries, the population is declining, eg Japan, and in others the population is just barely reproducing itself, eg Italy.
Japan's rapid aging means its population of 128 million will decline by 1 million per annum; shrinking the number of Japanese by one-third by 2050, and people over 60 years old will account for 40 per cent of the population. The total number of workers in Europe is projected to decline by 15.7 million over the forecast horizon to 195.6 million in 2060. Life expectancy at birth is projected to increase from 76.7 years in 2010 to 84.6 in 2060 for males and from 82.5 to 89.1 for females. By 2050, over 50% of Europe's population will be over 65 years old.
The demographic changes will have serious consequences on public finances in developed countries. Age-related public expenditure, in particular pensions and health care, is projected to increase to around 30% of GDP by 2060. Public pension expenditure alone is projected to rise by 1.5 percentage points to nearly 13% of GDP by 2060. In the United States 20% or one in five Americans will be over 65 years old by 2030.
This demographic shift will have implications for Jamaica. Whether these effects are positive or negative will depend on what Jamaica does in response. With appropriate policies, what will be challenges can be transformed into opportunities.
The US will have to import a large part of its workforce, and these could be jobs that will be filled partly by Jamaicans, but we will have to compete with young working age people from all over the world. The jobs will be for two kinds of persons, namely unskilled manual labour of which we have an excess and highly skilled which we can ill afford to lose.
These are jobs for persons migrating to the USA, but there are also jobs which will be outsourced to developing countries and Jamaica can try to attract some of these.
Traditional exports, in particular, tourism, will have to revamp the product offerings to take account of older tourists. This involves the type of attractions, the type of hotel facilities, and the type of services. Most important will be the need to develop a different mindset in dealing with tourists and understanding their needs.
New and untapped opportunities could be developed to capitalise on the demographic shifts. The health care industry is getting more expensive each day and Americans will be seeking medical attention outside the US — as they do now in India and Mexico. Jamaica is ideally located to meet this demand, and the nurses and doctors that now migrate can work in Jamaica and still earn US dollars.
There is also the retirement community industry where Jamaica has a substantial comparative advantage, assuming that crime is controlled.
These opportunities can only be realised if the Government and private sector start to plan and move quickly to implement appropriate policies.