Dependency futures

The demography of dependency doesn’t look good.

NPR has a new report on the personal expectations and economics of retirement, and new poll data. It fits with what I was about to say about the troubling trends in early adulthood incomes. Here are some trends.

The new Census poverty report shows that poverty rates have increased for everyone under age 65 since 1999.

In fact, as the figure shows, compared with previous recessions in particular, the current recession has driven up poverty rates more for people in the ages 18-64.

But this doesn’t show a different aspect of the trend — that 18-64 poor population has been a growing share of the total poor population. They are now 57% of all poor people, up from less than 40% in the 1960s. That’s partly because the Baby Boomers aged into this group, and also because poor people have fewer children than they used to, so there are fewer poor children. When you divide the poor into three age categories, this is how their shares have changed since the 1960s:

Source: Census historical tables.

It’s actually worse than that for the mid-adulthood folks. Not only are they more likely to be poor, but their median incomes have fallen. Among men ages 25-54, the last decade has been brutal.

Source: Census historical income tables.

One of the social problems with having more poverty in the mid-adulthood years is that the social safety net needs their earnings to pay for the old and the young, and they need to be accumulating wealth, too, so that wealth can be seized by the state and redistributed later.

In traditional actuarial models, people in the mid-adulthood ages were expected to support everyone else. That’s why demographers invented the “dependency ratio,” which is the ratio of people not in those prime earning ages per 100 people who are — the lower the number the better — if you want your kids in school and your old people securely retired . By 2030, the ratio rises to a whopping 83 in Census projects:

The unemployment, declining earnings, and growing poverty among middle-aged people is going to reduce their contributions now into pensions, and hurt their savings for later. On the other, if they’re too broke to retire when they want to — as many in the NPR survey report — that would help keep the pension system solvent.

8 Comments

Filed under In the news

8 responses to “Dependency futures

  1. naturallycode

    I think I’m misunderstanding something – the chart shows 83% of people below 20 or over 64 (hence 17% of people between those two ranges), but that same document (page 3) says:
    “In 2010, 60 percent of the U.S. population will be aged 20–64. By 2030, as the baby boomers age, the proportion in these working ages will drop to 55 percent.”
    Can you clarify this? One is likely sustainable in a population, the other extremely not.

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    • Thank you for pointing that out. My mistake in the text. The denominator in the dependency ratio is not the whole population, but the 20-64 population — that’s the difference. I said that right in the first sentence, but then described the figure incorrectly. Fixed it now.

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  2. Ness Blackbird

    OK, that makes more sense🙂 It’s still an enormous difference, though. I see the young men statistic playing out all around town…young guys rarely have a career, are often unemployed, often underemployed, often poor, generally seem to have a lost feel to them. When I ask about prospects they generally focus on the short term.

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  3. Myra Ferree

    Hmmm. Am I correct unassuming that the generally upward trajectory of women’s incomes (unlike men’s) has to do with their steadily increasing hours of work? And thus the shift toward being a family breadwinner is one of bringing women into this role, so fewer dependents and more earners than were anticipated by the conventional male-earner model? Bruce Western suggests that it is women’s wages that are keeping the family incomes of the bottom third of the income distribution from completely going into the tank, but given the differences (still) in m and f wages, this should mean ever more hours of family labor just to try to maintain an income that will support dependents. Treating m and f incomes as separate points to something important but also hides something about the meaning of this money for actual dependents.

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    • Yes I think you’re right. There are different dependency paths — within families and through social insurance. The family composition and income issues affect the first more than the second. For this I was thinking from the point of view of how much money Social Security and Medicare raise — so it’s the number of workers and their earnings that matter, regardless of their family relationships. But in the overall dependency picture what you’re saying seems crucial.

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  4. Thanks for the post. There’s (at least) one more thing you should say when you address this stuff: The war on poverty worked–at least partly. The percentage of elderly in poverty has decreased dramatically since the 1960s, a direct function of government programs, particularly Medicare and the indexing of social security benefits.

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  5. Pingback: Syllabus supplements for fall family sociology | Family Inequality

  6. Pingback: Syllabus supplements for spring family sociology | Family Inequality

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