In the common children’s fable, the well-intentioned Goldilocks happens upon a community of bears. Through her curiosity she ends up leaving her unintended hosts in much worse condition than when she arrived, and her gift is a rather large mess to clean up. (I have no doubt that if the fable were non-fiction she would have been eaten.)
Some would suggest western society is on the cusp of a similar unintended mess. There is a vocal chorus of well-respected thinkers who argue we have created a mess in magnitude larger than the financial crisis of 2008.
Throughout modern history we have developed along a predictable curve of progress, each generation surpassing the achievements of the previous. However, the baby boomers may be the last generation to boast this accomplishment and boomers may have architected this change.
Stanley Drukenmiller, a successful hedge fund manager who invests based on trends, presents an argument that boomers are stealing from future generations through entitlements such as social security and healthcare.
In the U.S., an arguably less generous entitlement state than Canada, entitlement transfers as a percentage of budget outlays were 28 per cent in 1960. In the last two years they are up to 68 per cent.
Druckenmiller says that on average 90-year-olds today are spending 135 per cent of what the average 40-year-old is making and they’re spending about twice what the average 30-year-old is spending. The biggest part of this spending is on health.
There are opposing views to this argument. Many are offended with the notion that oldsters are committing theft in plain sight of their children and grandchildren.
Regardless of your position on the issue, there are some significant realities facing us that will effect the service expectations of aging citizens with unequal burden on younger citizens. A concern for both ends of the demographic spectrum.
On P.E.I. we know that in 2011 there were more retirees exiting the workforce than entering it. We also know that by 2016 deaths will outstrip births in our province.
In 2012, 15.7 per cent of the population was under 15; while 23.2 per cent of the population was 60 and over. Our population under 45 declined by 0.2 per cent since 2007, while the population aged 45 and over has increased by 13.6 per cent.
These are staggering statistics. Drukenmiller demonstrates that in the U.S. there is great burden on the younger generations, in fact a difference of over $700,000 in net lifetime benefits between an unborn child and a 65-year-old. A 65-year-old would have received $327,400 benefits over the course of their life; a child born tomorrow would receive a negative $420,600. A substantial debt burden to start one’s life.
If we do not have the infrastructure to support our needs, then our entitlements will not be available as expected. We have time to lessen the impact, but we are squandering the commodity of time. In 2012 we hit an all-time low for net interprovincial migration; 1,252 more people left P.E.I. for other provinces than relocated to P.E.I. Our province needs to attract more people, now.
The challenges our society and province potentially face are immense. The solutions to our needs are complex and unspoken. The opportunity of this article is to challenge convention, and speak on issues many will not. By starting this conversation and stimulating dialogue perhaps solutions will be discussed and an ensuing debate will result in action.
Blake Doyle is The Guardian’s small business columnist. He can be reached at email@example.com.