May 25, 2015

Sneak Preview

Demographically, the US in 2050 will look much the way Germany and Italy do today: 20% of the population will be over age 65. Comparing the attitudes and beliefs of Germans, Italians, and Americans toward elder caregiving, as a new Pew Research Center report does, can give us a glimpse of our future.

The facts are intriguing. Twice as many Italians and Germans as Americans feel that government should bear the greatest responsibility for economic well-being in old age. This reflects today’s reality: in the US, 38% of the income among those over 65 comes from government sources such as Medicare, whereas in Germany and Italy 70% comes from public funds. It may also reflect the fact that there are fewer young people in Germany and Italy to bear the burden of caring for the older generation. The old age dependency ratio in both European countries is 30, which means there are 30 older adults for every 100 “working age adults,” defined as ages 15-64, even though 15 is seldom working age in these societies; in the US today, the dependency ratio is 19.5.

What I found particularly striking is that more older Americans continue earning money from working in old age than do their European counterparts: 32% of the income of elderly Americans derives from work, compared to 20% of that of Italians and only 13% of the Germans. It seems that Americans work more—and depend to a greater extent on working for their identity as well as for their income—than Europeans, who also have shorter work weeks and take more vacation time. And today’s Americans are far more likely to have a private pension fund of some kind, for example from their employer, than the Germans or Italians: 30% of American retirees receive private pension benefits, compared to 13% of Germans and 7% of Italians.

Those under 65 in all three countries have one belief in common: they are skeptical as to whether government old age benefits will be available to them when they retire. Paradoxically, Italians, who currently depend most heavily on the government for financial support in old age, are more convinced that adult children are obligated to provide financial help to their aging parents (87% assert this) than Americans (76%) or Germans (58%).

It’s sobering to note that though the US elderly are much better off since the introduction of Medicare in 1965, fully 20% of older Americans are poor—twice the rate in Germany or Italy. It’s also disturbing that the generous private pensions Americans received in the past are vanishing, as is employer-provided supplementary health coverage. American culture maintains an ethic of individual and family responsibility but is gradually eroding the support, both private and governmental, that makes that possible. 

If we want to focus on the family as the locus of care—and we shouldn’t kid ourselves into believing that older people won’t need care—we need to make sure that we develop rather than destroy what infrastructure there is in which those caregivers operate. That means more flexible and part time job options for caregivers (as well as for older people themselves) and technology that helps caregivers monitor remotely. It means developing a cadre of workers who can supplement the services provided by families and earn a decent wage doing do. It involves providing respite for caregivers so they can get mental health breaks and go on vacation. It involves nothing less than a societal makeover.

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