Paying for It: While America Dithers, Sweden and Other Countries Have Pioneered Creative and Surprisingly Hard-Headed Reforms to Cope with the Mountain of Retirement Costs That Lie Ahead

By Schieber, Sylvester J. | The Wilson Quarterly, Spring 2006 | Go to article overview

Paying for It: While America Dithers, Sweden and Other Countries Have Pioneered Creative and Surprisingly Hard-Headed Reforms to Cope with the Mountain of Retirement Costs That Lie Ahead


Schieber, Sylvester J., The Wilson Quarterly


THERE AREN'T MANY MYSTERIES ABOUT THE FINANCIAL challenges posed by the aging of America's population. While little consensus exists on how to shore up Social Security, there is widespread understanding that the system will be in deficit within a decade of the first baby boomers' retirements, which start in 2008. The Medicare financing outlook is even bleaker; the federal health-insurance program for the elderly is already in the red even as a costly new prescription drug benefit is being implemented. Front-page stories about corporate pension plans that go belly up or are cut back, at the same time that retiree health-benefit programs are curtailed, add to the general anxiety.

But perhaps the biggest concern Americans should have about their retirement system is the sheer inertia that has prevented the nation from addressing its problems. For more than two decades, we have known about the demographic challenges facing Social Security. We knew before prescription drug benefits were added to Medicare coverage that the system was in trouble. It makes for a sad spectacle indeed that we enjoy the rare advantage of being able to see the future with clarity yet are unwilling to act.

Meanwhile, other countries have started to address some of the same challenges, and they have done so with greater inventiveness and determination than the United States has shown. The list of pioneers ranges from the familiar example of Chile to the less noted examples of Sweden, Germany, and Canada. All offer lessons from which America can learn.

By some measures, America's aging problem is relatively minor compared with what other developed countries face. For every retired person in America, there are currently about four working people. (Australia, Canada, and the United Kingdom have similar ratios.) In Japan, the ratio is closer to three workers per retired person; in Italy, it's down close to two, and Germany is not much better off than that.

The demographic future also looks at least as favorable for the United States as for any other developed country. The retirement burden on American workers is not expected to be any greater in 2030 than it already is today in Germany or Italy. By that year, Germany's burden is expected to be twice and Italy's 2.5 times America's. Italy will have only one active worker per retiree. Other developed countries, such as Switzerland and the Netherlands, will be in better positions than that but will still face bigger burdens than the United States.

Perhaps the most important lesson to be learned from abroad comes from countries that are less reliant on pensions to provide income security to older people. They do not rely as much on pensions for the simple reason that many older people in these countries are still working. Japan presents an especially interesting case. It has the most rapidly aging population in the developed world, but its retirement burden in 2030 is expected to be attenuated because older people in Japan tend to work later into life than their counterparts in most other developed countries. The average retirement age for Japanese men is nearly 67.

The undeniable fact is that many people, especially in the world's developed economics, are retiring at ages when they could still be highly productive. An astonishing 38 percent of Italians in the 50-to-54-year-old bracket are already out of the labor force, and hardly anyone in Italy between 60 and 64 still works. Granted, Italy is an extreme case; even in Sweden, workers are less likely to retire early. But the trend toward early retirement is widespread.

The most significant influence on when the majority of people leave work behind is the structure of the retirement system: An earlier "normal" retirement age or more generous benefits for early retirement lead, predictably, to more retirements. In Iceland, 81 percent of the population between the ages of 60 and 64 is still in the labor force, largely because of incentives in the retirement system that encourage people in that age bracket to continue working. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Paying for It: While America Dithers, Sweden and Other Countries Have Pioneered Creative and Surprisingly Hard-Headed Reforms to Cope with the Mountain of Retirement Costs That Lie Ahead
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.