Advantages and disadvantages of an aging population

There are no advantages to an aging population society.

Germany has the highest level of population aging in Europe, with more than one-fifth of its population over the age of 65. It is second only to Japan in the world in terms of population aging. Statistics show that in 2010, Germany's population was about 81.8 million, of which less than one-seventh of the population is younger than 15 years old, the ratio is the lowest in Europe, and the world is only Japan's proportion is lower than that of Germany. At the current birth rate, Germany's demographic problems will get worse in the future: in 40 years the population will be 12 million fewer, down to 70.1 million.

The impact of population ageing on Germany's economic and social life is deepening, and the structure of society is changing. The potential for economic growth in Germany is weakening; the burden on public **** finances is increasing; social security funding will face an unprecedented crisis; and as a result, the urban-rural gap is widening, unemployment is rising, psycho-social problems, and other undesirable consequences. 2.3 million Germans needed care in 2009, and this number will increase to about 3.3 million in 2030.

Germany is one of the first countries in the world to begin a systematic response to aging, and after decades of development has become a veritable model of a welfare state; a law that came into effect in 2012 stipulates that the age of retired people will gradually transition from the past 65 years old to 67; Chancellor Angela Merkel, who leads Germany's ruling party, has also drafted a bill proposing that people over the age of 25 who have incomes be charged an additional "age tax". An additional "age tax" will be levied on people over 25 who earn an income, so that these young workers can help the country cope with the looming pressure of old age.

Germany heavily aging

Germany has been aging since the 1980s. Statistics show that the average age of Germans was 37.1 years in 1980, an increase of 2.2 years (6.3% increase) from 1970. The average age in 1970, 34.9 years, was virtually unchanged compared to 1960, when it was 34.8 years. 1990 saw an increase of 1.7 years (4.6 per cent) compared to 1980, and 2000 saw an increase of 1.4 years compared to 1990. The reasons for the relatively slow increase in the average age between 1980 and 2000 stemmed from the foreign population and the reunification of East and West Germany. After these two factors were absorbed, there was a further jump of 2.6 years in 2010 over 2000.

Germany is one of the most aging countries in the world. the average life expectancy of Germans in 2010 amounted to 79.80 years, including 77.70 years for men and 82.74 for women. According to the figures of the Federal Statistical Office in 2010, the population over 60 years of age amounted to 21.7 million, accounting for 26.6% of the total population, of which the population over 65 years of age was 16.0 million, accounting for 19.6% of the total population. 2030 Germany's population over 60 years of age is predicted to be 36.2%, and in 2050 it will even be more than 40.9%. Today 21% of the German population is over the age of 65, and it is expected that by 2030 the number of people over the age of 65 will have risen from the current level of about 16 million to 24 million; by 2060 this proportion will reach about 34%. Currently, one in five people in Germany is over the retirement age of 65, and by 2030 there will be one in four people over the age of 65, rising to one in three by 2060.

The China Economic Times reporter in Germany during the interview, had seen a middle-aged couple with five children on the streets of Frankfurt crossing the road in a cozy scene, the eldest is more than 10 years old, the youngest is still lying in the stroller. But the German counterpart smiled bitterly and shook his head, he told the author a maxim - "You can imagine the opposite", used to illustrate that the scene in front of us is just a special case. In fact, in Germany, see is really the "opposite situation": Lufthansa flight attendants are "sister-in-law"; hotel waiters are the oldest old; rental car drivers are also most of the elderly.

Germany's population has been declining since 2003, and the main reason for the demographic shift is the low birth rate. According to statistics, the average German woman now gives birth to only 1.4 children, the number of deaths exceeded the number of births by 144,000 in 2006, and it is expected that the total population of Germany will fall from the current 82.5 million to 78 million by 2030. Along with the decline in population, the problem of aging in Germany is becoming more and more prominent, and the head of the Federal Statistical Office, Somer, has pointed out that more and more German women have stopped being mothers since the 1970s. The reasons for this situation are that there are not enough childcare centers in Dessie and that many elementary school close after lunch. 11% of women over 60 had no children in 2008, compared to 21% of women in the 40 to 44 age group. According to the Federal Statistical Office, between now and 2060, Germany's population will decrease to 65-70 million. With a growing geriatric society accompanied by a declining birth rate, German society will face a huge challenge.

With a negative natural balance (the difference between the number of births and the number of deaths), the German economy is facing a huge challenge from the labor market, and growth is likely to fall back significantly in the next decade. The OECD's German Economic Report 2012 points out that in the long run, the average growth rate of the German economy will remain at a low level of 1.5 percent, and may even fall to 1 percent in 10 years' time, mainly because of the rapid aging of the population and the consequent decline in the number of potential laborers.

Gurría, the OECD secretary-general, said at the report's launch that structural reforms in the labor market, the tax system and energy policy are needed if Germany is to remain rich in the future.

Researchers expect the OECD to increase employment by an average of 0.5 percent per year between 2016 and 2025, while Germany will see a significant decrease in employment over the same period. By the mid-1930s, Germany's share of the total population under the age of 15 and over the age of 64 will have risen from the current 51 percent to 74 percent.

OECD economists have called on the German government to carry out reforms to boost the number of people in employment and to gain access to specialized talent by, for example, putting more women into full-time work and extending the retirement age. To do this, Germany needs to reform its tax and social security systems. For example, reduce tax breaks for single-worker families, while investing in kindergartens that offer good services at low prices.

Gurría said the German economy is expected to grow by just 0.4 percent in 2012. The pillars of future German economic growth are strengthening domestic demand and increasing labor potential. The OECD recommends that Germany relax the harsh regulations on some service industries, such as architects and lawyers, and promote scientific research and development not only through direct funding but also through tax breaks and exemptions.

There will also be a gap in the labor force. Although the harmful effects of an aging population are currently being offset by the increasing participation of women and older workers, Korth, a researcher at the Kiel Institute (IFW), one of Germany's six leading economic research institutes, predicted, "The decline in employment will weaken Germany's growth potential in the long run. The growth rate should be in the range of 1.2 percent per year in the future, compared with 1.5 percent in 2000." The Federal Labor Office predicts that Germany will have a labor shortage of 7 million by 2025 and will have to bring in foreign talent on a large scale.

The growing number of elderly people retiring will have an impact on public ****ing finances. According to the German Federal Statistical Office, Germany has been in a state of negative population growth for most of the past 10 years. At this rate, fewer and fewer young people will have to bear the burden of more elderly people. There are currently around 2.3 million elderly people in need of care in Germany, of whom 1.5 million are mainly cared for at home and another 800,000 choose institutional care. In response to the rapid development of Germany's aging, the world's leading auditor Enrst & amp; Young September 2011 survey concluded that by 2020 Germany will have 900,000 people to choose institutional care. In other words, 100,000 additional institutionalized beds will be needed in ten years' time, and this investment alone will require 17.7 billion euros.

An aging population will lead to increased social security spending and a major challenge to the financial security of the social security system. Colin Holtz, director of the Berlin-based Institute for Population and Development, said: "As Germany's baby-boomers reach retirement age, the country's social security funding will face an unprecedented crisis, and today's social security system will be unsustainable due to a lack of funds. Even if the birth rate can improve, the absolute number of newborns will continue to fall because the number of women of childbearing age is becoming smaller and smaller."

A working group in Germany's federal parliament recently proposed an "age tax," in which every German over the age of 25 would pay a certain amount of money as a percentage of their income to build up a reserve to protect against rising pension costs in the future. The working group reasoned that the baby-boom generation born in the 1950s and 1960s will retire around 2030, when health and care costs will rise sharply.

The "age tax" was born out of concerns that social security spending would be overwhelmed in an aging society, and its feasibility has yet to be demonstrated because of the complex and sensitive issues of political and economic fairness involved. The proposal has also been criticized by the ruling party and the opposition.

The German government has realized that the aging of the population will not only lead to a decline in the productivity of the national economy and an increase in the tax burden, bringing about a series of problems such as a heavier burden on young people and a shortage of labor, but also deepen the generation gap in society, with the emergence of more elderly people who have difficulty in their lives, affecting social harmony. Germany's shortage of professionals, nursing home caregivers and other real problems show that the demographic changes mainly characterized by aging have begun to have an impact on Germany's socio-economic. Some analysts believe that the biggest challenge facing Germany in the next few years is not the European debt crisis and energy shortages, but how to deal with the problem of population aging. German ministries are working together to develop a "population policy" program, how to deal with population aging in Germany for long-term planning. Angela Merkel hosted an expert meeting on population aging, inviting representatives from all walks of life *** to discuss countermeasures.

Former German Prime Minister Gerhard Schr?der, in an interview with Business News Daily, put forward the "2030 Agenda", pointing out the need to respond in a timely manner to the challenges posed by the aging of society. He insisted on extending the retirement age to 67, increasing the proportion of women in the leadership, and supporting the policy of foreign immigration. The working group that proposed the "age tax" not only emphasized the stability of the social security fund, but also proposed a variety of measures such as creating a family-friendly social atmosphere, advocating in-migration, and hiring more women and older workers. At the same time, fundamental issues such as increasing the birth rate and balancing women's roles in the family and in the workplace require the government to formulate family-friendly and birth-encouraging policies. It is believed that the reason why France's fertility rate is better than Germany's lies in the encouragement and cooperation of its family policy.

Some population experts believe that demographic development generally goes through five stages from a plurality of agrarian societies to an aging industrial society, and that balance should be re-attained in the final stage. Looking at the current situation, the industrialized countries around the world are still moving toward an aging society, and it remains to be fact-checked whether the new equilibrium in the theory can be reached.

At a conference in Singapore? Dieter Salomon, mayor of the green German city of Freiburg, talked about the future of cities. When asked what will happen to German cities in the next 30 years, he smiled and said, "There will be no future."

Mr. Mayor is not exaggerating. For decades, Europe has had the slowest population growth in the world, with fertility rates well below the population replacement rate and about 50 percent lower than in the United States. In time, this demographic trend will have disastrous economic consequences. By 2050, Europe's current population of 730 million will be reduced by between 7?5 million and 100 million, and its labor force will be 25 percent smaller than it was in 2000.

Germany, the continent's super-economy, has little chance of escaping the demographic "winter". By 2030, there will be 53 retirees for every 100 people in Germany, compared with 30 in the United States. As a result, Germany will face a huge debt crisis - the cost of social benefits for the elderly will eat away at the fruits of its current frugal/output economy. According to Nick Eberstadt of the American Enterprise Institute, Germany's debt principal and interest as a percentage of GDP will be twice as high as Greece's is today by 2020.

Government response

Germany was the first country in the world to establish a public **** pension system. As early as the end of the 19th century, the then Chancellor Bismarck set up old-age insurance, and throughout the course of the 20th century has given birth to health insurance, unemployment insurance, workplace injury insurance and, in 1995, nursing care insurance. In general, old age was mainly borne by society, and public **** pension benefits were generous. Since the introduction of nursing care insurance, the senior care industry has provided hundreds of thousands of jobs for society.

In order to cope with aging, Germany has added an accumulative pension scheme to the single public **** pension system. The German public **** pension system (GRV) adopts a pay-as-you-go system, and the required funds come from payroll taxes and fiscal subsidies, with a payroll tax rate of 19.5%, which covers about 70% of public **** pension expenditures. In the late 1980s, the government recognized that aging would have a serious impact on the sustainability of the public **** pension scheme. Germany launched a pension reform in 1992, and its main policies included revising the pension benefit adjustment mechanism to avoid excessive growth in pension benefits and controlling early retirement, methods that reduced pension spending while also lowering pension benefits. In order to compensate for the decline in pension benefits, Germany has established a voluntary full accumulation pension plan, with a personal contribution rate of 4 per cent and tax incentives from the Government. The coverage of the accumulation plan is still limited. 2004, Germany further revised the formula for determining the public **** pension entitlement, the new formula automatically adjusts the public **** pension entitlement according to the changes in the ratio of retired population to the contributing population, and the public **** pension entitlement will be automatically reduced in the case of an increase in the proportion of the old age population.

Germany's pension insurance system consists of three parts: statutory pension insurance, corporate pension insurance and private pension insurance, the latter two are also known as "supplementary pension insurance". With the aging of the German population becoming more and more prominent, the government's pension burden is also gradually increasing. For this reason, the German government maintains the dominant position of statutory pension insurance, but also take measures to encourage people to participate in the "supplementary pension insurance".

In Germany, the statutory pension insurance covers a wide range, including general pension, but also includes vocational rehabilitation treatment, vocational ability or loss of employability pension. In principle, all employees are obligatory participants in the statutory pension insurance, while freelancers such as doctors, lawyers and artists are generally covered by private pension insurance.

The statutory pension insurance is mainly financed by employer and employee contributions at a rate adjusted from time to time according to actual needs, which currently stands at 19.5% of wages, divided equally between the employer and the employee, or the employer alone when the employee's monthly income falls below a certain limit. In addition, statutory pension insurance receives an annual state subsidy totaling approximately one-fifth of total pension insurance expenditures for the year. The pension is calculated on the basis of the retiree's salary at the time of retirement and the length of service, up to a maximum of 75% of the last month's salary before retirement.

In addition, Germany strongly encourages corporate pension insurance and private pension insurance. Unlike the statutory pension insurance, the enterprise pension insurance adopts the "direct payment principle", that is to say, the amount of enterprise pension insurance accumulated by the employee during his working life, he will get the corresponding amount of pension after retirement. The percentage of the employee's salary to be contributed to the enterprise pension insurance is determined annually by negotiation between the industry's labor department and the government, and this part of the pension insurance is eligible for tax incentives. Corporate pension insurance was initially given to employees as a benefit.

Since 2002, Germany has enacted a new law, which stipulates that employees have the right to ask their employers to turn a part of their wages or holiday bonuses into corporate pension insurance, and that they are free to choose their own method of financing, form of organization, and insured persons. At present, Germany's corporate pension insurance coverage of the labor force has reached 65%, becoming the most important complementary part of the pension insurance system.

While the supplemental pension insurance in Germany is voluntary and operated by private companies, the government does not leave it completely unattended, but rather exercises macro-control over it. In order to prevent the risk of employers being unable to pay their pensions due to the declaration of bankruptcy, Germany has set up the Pension Insurance Foundation of Employers' Organizations as a guarantee institution, which stipulates that employers running corporate pension insurance are obliged to take out an insurance policy with the guarantee institution, which will pay the supplemental pensions of their own enterprises if they are unable to pay them due to the bankruptcy of their enterprises.

Private pension insurance is also voluntary and is also subsidized by the state. Currently, the proportions of pensions paid by statutory pension insurance, corporate pension insurance and private pension insurance in Germany are about 70 percent, 20 percent and 10 percent, respectively. The German government hopes that the pension paid by private pension insurance will be increased to 15 percent of the overall pension in the near future and to 25 to 30 percent in the medium and long term. In this way, corporate and private pension insurance will be expected to gradually rise from their current supplementary status to a pillar status similar to that of statutory pension insurance.

Declining fertility rates and an aging population have greatly impacted Germany's pension insurance system, which was created in the 19th century. Germany's retirement insurance system is the "transfer method", also known as "intergenerational contract". Specifically, the current working generation pays for the retirees' pensions with their retirement contributions.

As a general rule, the most reasonable and effective ratio is one retiree for every three active employees. And Germany is currently providing pensions for 44 retirees for every 100 active employees. According to the current development process of the fertility rate and population aging, in another 20 years, every 100 active employees to support 78 retirees. By then, it will no longer be possible to rely on the contributions of active employees to provide for the retirees.

When the pension insurance system was introduced in Germany in the early 19th century, the legal retirement age was 70, and the average life expectancy at that time was only 45 years old. when the German government carried out a pension reform in 1956, the retirement age was set at 65 years old. In these years, the average retirement age of Germans is 65 years old, but the average life expectancy has reached 80 years old. So the German government decided to raise the retirement age to 67 from 2012.

European society has become accustomed to enjoying a comfortable retirement life, and some welfare states are regarded as a paradise for retirees on the continent. Although more and more people realize that the current system is about to go bankrupt, the people are often concerned about the immediate benefits and oppose the extension of the retirement time. A German friend of the reporter argues that the decision is unrealistic? because two-thirds of people in German companies have been forced to leave their jobs before the age of 65 for health and other reasons.

Other academics have argued that delaying the retirement age will squeeze employment and promotion for young people, and that delaying retirement is prolonging the country's metabolic cycle. German labor unions have also criticized the reform measures will not benefit Germany's old-age security system, is a disguised "downsizing pension plan". No matter how much the people oppose the measure, but people must realize that the reform of the existing welfare system is a "painful reality" that Germany must face.

To address the issue of aging, the German Federal Ministry of Education and Research has developed a comprehensive research program that specifically funds research in all areas of population aging. Introducing the program, called the "German government's research agenda on demographic change," German Minister of Education and Research Annette Schaffan said this is the first time Germany has developed an interdisciplinary research program specifically on population aging. The German government plans to invest more than 400 million euros in the program by 2016***. The program covers topics ranging from principle issues in the social sciences to specific technical issues aimed at improving the lives of older people in the areas of communications, transportation, new building concepts, and training, health care, and so on.

Schaffan said, "Through scientific research, we want to promote the development of new solutions, products and services that contribute to improving the quality of life and social participation of older people. We want to discover the treasures of the longevity society that are still latent today for the well-being of society as a whole."

The German Ministry of Education and Research emphasized in a statement that Germany must not only respond well to the challenges of an aging population in the future, but also make good use of the opportunities of aging. For example, how to better utilize the role of older employed people in the face of the reality of the gradual decline of young employed people in the future. One of the funding directions of the research program is to promote the business and education sectors to find better solutions to similar problems.

A model for old age in the welfare state

Germany has a social market economy. As in other areas of the economy, the German federal government does not, in principle, intervene directly in the development of the market for the "silver economy", but it does give full support in terms of policy: financial support for elderly people in need of care and tax support for care companies. German social welfare law **** has twelve volumes, is a real welfare state.

The cost of care comes in the first place from care insurance, with the Ministry of Health in the lead. The rates are:

Home care: care level 1, 450 euros per month; care level 2, 1,100 euros per month; and care level 3, 1,550 euros per month;

Day or night care centers: care level 1, 450 euros per month; care level 2, 1,100 euros per month; and care level 3, 1,550 euros per month;

Short-term care centers: care levels 1 to 3, 1,550 euros per month;

Institutional care? Nursing home : care level 1, 1,023 euros per month; care level 2, 1,279 euros per month; care level 3, 1,550 euros per month;

Alzheimer's disease: 2,400 euros per month;

It should be noted that the amount of the care insurance is based on a partially insured basis. For example, if a nursing home in Berlin charges 3,000 euros per month for care level 2, you will have to pay the remaining 1,721 euros after deducting 1,279 euros per month from your care insurance.

If the individual is unable to pay the 1,721 euros mentioned above, the state provides a financial subsidy based on the individual's income floor. The financial subsidy is provided for in Book XII of the German Social Welfare Act, with the Ministry of Civil Affairs and Welfare as the lead agency.

Tax incentives for caregivers. Germany currently has two main corporate taxes: sales tax? currently 19% and profit tax. The profits tax is divided into a corporate income tax of ?15% and a corporate sales tax of ? which is about 13%. Nursing companies are exempt from sales tax and business tax, but only pay corporate income tax.

Local governments also support senior living. Due to the federal nature of Germany, local governments can provide policy or financial support according to their own situation. For example, the local government of Munich, in response to the current situation of extremely high land prices, has given strong policy support for the establishment of small-scale senior citizen settlements, the so-called Munich model - a relatively inexpensive land price in exchange for building targets for public **** business. The "Munich Tudorin Geriatric Settlement" consists of 49 home-serviced apartments and a 108-bed nursing home. The local government also provides a one-off financial subsidy of 16,000 euros per bed.

The relationship between home care and institutional care in Germany is a complementary one. "Home care as the basis, community services as the basis, institutional care as the support ......"? This principle has largely been realized in Germany. Currently there are about 2.3 million elderly people in need of care in Germany, of which 1.5 million are mainly ageing in place, with the help of relatives, friends and neighbors, and they are on average under 80 years old. The other 800,000 people choose institutional care, and those who usually live in nursing homes are generally over 80 years of age. The first stage of elderly people in need of care is dominated by home care combined with community services, and the second stage enters institutional care.

Home care is mainly composed of traditional home care, supplemented by day care centers and short-term nursing homes; home care and nursing insurance support home care services with a fixed amount of money according to the level of care. The Lena Van Group, for example, offers home care services at many locations in Germany and currently serves 1,600 customers***.

With the help of the home care service, the elderly can go to a day care center after they have washed up and finished their breakfast. There are usually different activities for the elderly there, such as recitation, paper-cutting, memory training, chess and cards, and cake-making. When they return home, washing up for dinner and going to bed are again done by in-home care services.

In the absence of relatives, friends and neighbors or when they themselves have just returned home from the hospital and need a rehabilitation phase, the elderly can enter a short-term care facility. This can be up to two months a year under the care insurance scheme.

In Germany, 800,000 people opted for institutionalization in 2010, i.e., entered a nursing home, and in 2020, ten years later, more people are expected to enter nursing homes. The widespread separation of the elderly from their children, the pressures of their children's work and pursuit of a personal life, and the declining birth rate are the main reasons for the rapid growth of institutionalized care in Germany. According to statistics five years ago the average stay in a nursing home was about two years per person, the current stay is considerably shorter and is estimated to be around one year. In other words, the development of aging should create a greater demand for beds than predicted, and it is only the shortening of the cycle and the development of the in-home care service industry that has eased the problem.

Currently in Germany*** there are about 12,000 elderly care facilities with 800,000 beds, which means less than 70 beds per facility. This has to do with Germany's population density and their taste in life. However, due to competition and cost pressures, new senior care facilities are now usually built with more than 120 beds, and most of them are built in cities.

The difference between a nursing home and a home is the 24-hour access to all-inclusive services: nursing care, daytime living and personal care. The Lena Van Group, for example, combines skilled nursing care with hotel services, and has set up "life service centers" in many cities that focus on institutional care.

In recent years, Germany has seen the emergence of a new model of home care - the guardianship apartment. Because of the mobility problems of the elderly, the newly built apartments are barrier-free, with additional hardware facilities to serve the elderly, such as electronic signals or TV monitors, etc., and nursing care can be booked at home if needed.

Experience has shown that the combination of custodial apartments and nursing homes, it is more popular and faster to promote. Not only do the elderly receive a vastly increased range of services, but if they become bedridden they can be admitted directly to a neighboring nursing home. The most representative example is the Lena Van Life Service Center "Berlinbuch", which opened in 2008. Its services include nursing apartments, nursing homes, day-care centers, and a nursing home. Nursing homes, day care centers, short-term care centers, dementia care centers and medical care centers.

Due to the aging population and the declining birth rate, it is predicted that from 2012 to 2020 Germany*** will need an additional 220,000 caregivers. With around 970,000 people currently working in the care sector, there has been an acute shortage of specialized personnel for many years. For a wide range of services, such as elderly care, dementia care, medical care, etc., continuous training and retraining of caregivers through specialized seminars and exchanges with insurance companies or hospitals is essential.