The social safety net for the elderly is under strain in developed countries, according to the NYT:
As governments of most industrial nations try to restore long-term financial stability to their pension systems — raising the retirement age, linking benefits more closely to workers’ contributions and the like — there is a growing risk, as the O.E.C.D.’s secretary general, José Ángel Gurría, put it, “that future pensions will not be sufficient.”
This is hardly a shock: Demographics, like ocean liners, move slowly and can be spotted from afar. On top of that, the lackluster growth and high unemployment experienced across much of the Western world in the last few years is going to make it much harder for young workers who expect to retire around midcentury from accumulating enough money to sustain a decent living standard in old age.
That all raises a question that seems to be studiously avoided in polite policy conversations: Is old-age poverty going to pick up again?
In this story, NYT is facing what everybody knows: The retirement systems of the 20th century won’t work in the 21st. U.S. retirees will see declining social security payments after 2035, according to the story, and the private retirement system isn’t working for many people. Additionally, citizens of developed countries continue to do two things that make it hard for retirement systems to work effectively: live longer and have fewer kids. The problem is worse in Europe than it is in the U.S. But even here, without substantial changes in the way we handle old age, the current retirement system will not give millennials and even many Gen Xers the security they need.
It is a good sign that even a deep blue news source like the NYT acknowledges the retirement problem. The shift from the old way of organizing basic social institutions to something that can work in the emerging new world of the information age will only happen as partisan blues gradually and painfully face up to the reality that change is inevitable.