Thursday, December 1, 2011

The Gray Boom

As we discuss in our chapter on social welfare policy, senior citizens account for a large share of government spending through Social Security, Medicare, and other programs. (See Frederick Lynch's book, One Nation Under AARP.)

The Census Bureau reports:
The U.S. population 65 and older is now the largest in terms of size and percent of the population, compared with any previous census, according to a new 2010 Census brief released today from the U.S. Census Bureau on the nation's older population. The group grew at a faster rate than the total population between 2000 and 2010.

According to the 2010 Census, there were 40.3 million people 65 and older on April 1, 2010, increasing by 5.3 million since the 2000 Census when this population numbered 35.0 million. The percentage of the population 65 and older also increased during the previous decade. In 2010, the older population represented 13.0 percent of the total population, an increase from 12.4 percent in 2000.

The graying of America will have a profound impact on the country, says William Frey, a demographer at the Brookings Institute in Washington.

“The fact that they’re growing so rapidly and people are living longer brings up all kinds of issues of how we’re going to deal with our older population in the future,” Mr. Frey says. “It’s kind of a ticking time bomb; 20 years down the road they’re going to have other needs to be taken care of.”

The 65- to 69-year-old age group is expected to grow most rapidly in the years ahead as more baby boomers hit that threshold. Over time, that could create serious financial stresses.

“What we’ve been predicting is now coming to pass,” says Alicia Munnel, the director of the Center for Retirement Research at Boston College. “We’ve had this confluence of the aging baby boomers with the financial collapse, and this group is going to be drawing on their savings, their pensions, and their Social Security and Medicare, which means those systems will be under pressure.”

In the years ahead, aging baby boomers will sharpen competition for America's resources.

“Even if they’re a positive economic force, the baby boomers will still have different kinds of needs than the younger population does," says Frey. "That dichotomy may bring up contentious issues in elections: Should resources go toward schools and affordable housing for younger people or should it go toward senior services?”