
In Hong Kong, Grandma Has to Find a Job - throwaway344
http://www.bloomberg.com/news/articles/2015-02-23/grandmas-vie-for-jobs-as-asia-s-worst-aging-crisis-looms-in-h-k-
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kanwisher
Most asian cultures, there is no social security cause the children are
supposed to take care of the parents. Generally speaking they usually live in
same house. Here in Thailand we get tax credits if our parents are old and
don't have a pension. Its called the "good child" exemption

~~~
lars512
Without a welfare state, sounds like good incentive to have lots of kids!

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seanmcdirmid
It's worse than that. You are forced to save a lot for retirement and medical
expenses, which leads to repressed consumer spending, which hurts the
economy...in a vicious cycle. Insurance (public or private) to make these
expenses predictable can help the economy substantially as consu ers have more
confidence to spend (what they have left after paying premiums, of course).

You can see this playing out in China right now.

~~~
murbard2
Why? Those savings are lent out to companies who produce the goods that will
be consumed by these retirees when they start spending their savings. A lot of
savings simply means an economy oriented towards the production of future
goods.

~~~
akgerber
Social Security and Medicare are also essentially longevity insurance, which
is extremely valuable.

Since one can't predict with any confidence how long one will live beyond
'probably 50-110 years if I don't get hit by a car', retirement savings is
much easier when there is a government-provided income floor in case of
mistakes in retirement planning. Otherwise, how do you choose between saving
enough that you're 80% or 90% or 95% or 99% or 99.9% sure that you'll have
enough income for the rest of your life? And if you wish to buy such insurance
(an annuity) in the private market, how do you spread risk so that you don't
face risk that the company will fail? And how do you make sure that any
financial adviser you have doesn't exploit you as you decline mentally?

Or do you just save single penny possible and never consume anything? Buy an
apartment building and hope like hell your neighborhood doesn't decline? Buy a
portfolio of widespread rental houses and try to manage them when you're 85
and have cancer? Hope your children are loyal? Or spread risk by having 6 or
more children?

Historical experience suggests the outcome of attempts to leave such
complexities to individuals is widespread poverty amongst the elderly.

And that's not even getting into the question of whether we have a global
savings glut. Safe investments are getting awfully expensive, with negative
interest rates on some government and corporate bonds being sighted lately.

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murbard2
You probably didn't mean to reply to my post which is about the effect of
savings and consumption on economic activity, but I'll address the points
nonetheless.

Insurance companies who sell annuities are have credit ratings, and some have
been around for quite a while. Metlife was founded in 1868, Prudential 1875,
or of course Lloyd's of London 1688.

Mental health decline is of course a concern. If you trust your children, or a
younger relative, it's a good idea to give them durable financial power of
attorney ahead of time.

There's no disputing that a social security scheme, or a paternalistic
compulsory saving scheme can decrease poverty in the elderly, especially if
people are hyperbolic discounters, but it also has downsides.

1) There's a risk that a compulsory saving scheme can be nationalized by the
government, as it happened in Argentina for instance.

2) In social security schemes, the money is typically invested but rather
spent directly by the government. The hope being that the future tax base can
pay for the liabilities. The model has proven unsustainable and eventually
requires that government resort to inflation, fiddle with the retirement age,
or cut benefits.

3) The money paid into and out of social security is controlled by the
government, which gives it a lot of political power. Governments often use
their money for nefarious purposes such as wars, cronyism, corruption, etc.
Giving them more control can be a bad thing.

4) There are moral concerns with forcing people to participate in a financial
scheme against their will.

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tokenadult
Older people tend to live longer and healthier lives if they continue working
past the customary retirement age. Both of my grandfathers (who became adults
before Social Security existed in the United States, and who aged into old age
when the standard retirement age was 65) worked until about age 75. They both
lived well into their eighties, with my paternal grandfather dying from being
hit by an errantly driven car rather than from disease. My parents both
retired right on the dot at age 65, and I think that has been worse for their
health than continuing to work longer (my dad has now died, at a younger age
than his dad died at).

The article kindly submitted here mentions an issue of age imbalance in the
population. "The Organization for Economic Cooperation and Development and
World Health Organization forecast Hong Kong will have the highest share of
population aged 65 years and over in Asia by 2050 with 42 percent, outpacing
Japan's 39 percent." That's an exceptionally skewed age ratio for any place in
the world. If people cease working at age 65 in such a place, a large
proportion of the population (both children and the elderly) have to be
supported by a not very large proportion of the population at working age.
That's difficult to do whether support for the elderly comes from their own
children or from taxpayers in general.

What's happening in many countries, of course, is that people are living far
longer into old age than they imagined they possibly could decades ago.[1]
Life expectancies at adult ages (say, 40, or 65) are increasing steadily all
over the developed world. If people retire at the same age as decades ago, in
much better health and with many more years of remaining life ahead, it's not
surprising that their personal savings may run out. The response is to keep
the proportion of working years over a whole lifespan a more or less constant
proportion of healthy life years.

[1]
[http://www.nature.com/scientificamerican/journal/v307/n3/box...](http://www.nature.com/scientificamerican/journal/v307/n3/box/scientificamerican0912-54_BX1.html)

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UweSchmidt
Not so sure about the general health of old people. Modern medicine keeps
people alive, but working today's stressful jobs? I'm glad for your
grandfathers, what kind of work did they do?

~~~
tokenadult
One grandfather was a farmer (dry-land farming and animal husbandry on the
Great Plains), the other a manager of a small town department store.

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seivan
Saw this in Singapore as well. I expect most countries will end up like this
(except maybe Norway). Including "welfare" (HAH!) states like Sweden.

I see old people begging because lack of jobs - that's native Swedes, not just
EU-migrants these days. Didn't see that 10 years ago.

~~~
danschuller
I'm living in Hong Kong now and I see old people collecting cardboard and
looking through bins more than once a day. It's not a good situation! There
are more news stories of older people commiting suicide compared to the UK.

Five-ish years ago I was living in Singapore too but I don't recall ever
seeing it there, especially nothing compared to Hong Kong.

~~~
seivan
Yeah, it's nothing compared to Hong Kong from what I've heard. Singapore
actually have _some_ level of help, but I'm not an expert on that so don't
quote me.

However, I meant the actual labouring. I saw a lot of elderly people working
McDonalds and cleaning tables. By elderly, I mean 70+.

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EGreg
Here's the way I see it:

Robots and automation may actually be the way we can get off the addictive
economic treadmill of having the you g pay for the old by an ever expanding
population. It is unsustainable.

They have already done so through increased worker productivity, but may
ultimately replace young people as the "breadwinners" for those who can't or
won't work.

This is to be welcomed, as we can economically support a shrinking population
that grows wealthier over time. The traditional refrain of wealth
redistribution being from "productive" members of society to the non
productive will be upended. Many people will be consumers, producing things
most people won't pay large amounts of money for.

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latch
I lived for a couple years in HK and then other Asian countries, and this does
stands out. But if the alternative is a debt-based welfare state....

I don't think there's any doubt the Hong Kong government needs to do a better
job with affordable housing, but I also don't like the fact that my nephew was
born with a $20K debt while 50% of my mother's pension is being payed by
taxpayers.

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rayiner
That debt isn't new, but is instead just a formalization of an arrangement
that goes back to antiquity--each child is born with the obligation to take
care of his or her parents when they get old.

~~~
DanielBMarkham
Syphilis is also not new, but that doesn't mean that it's not a problem.

Inter-generational debt can and does destroy both societies and governmental
systems. I'd argue that over the next 40 years, it's probably the biggest
problem the western democracies are facing.

I didn't want to dive too much into the political side of this, but I found
your comment to be a little too flip given the nature of the topic. One of the
major advancements in civilization was the idea that parents _cannot_ pass
their debts down to their children. That worked great for many decades, but we
seem to have found away around that by collectivizing it. Not good.

~~~
rayiner
> Syphilis is also not new, but that doesn't mean that it's not a problem.

This is more like the wheel rather than syphilis. Something created by humans
to serve a purpose, that endures because it continues to be useful.

> One of the major advancements in civilization was the idea that parents
> _cannot_ pass their debts down to their children.

With welfare, it's not parents' debts being passed on to their children. Its
the childrens' obligation to begin with.

~~~
cinquemb
> _This is more like the wheel rather than syphilis. Something created by
> humans to serve a purpose, that endures because it continues to be useful._

I see it more like a implementation of a way to allocate resources throughout
a society, that increasingly becomes suboptimal over time as the incentives to
participate in such an arrangement (not to be read/interpreted as agreement)
will become less distributed among individuals.

One would think that with the technology we have at our disposal, societies
wouldn't have to rely on co-opting parties that didn't ask to be born where
they are told, "it's your obligation", when distributing resources for
sustenance and quality of life.

~~~
harryh
If the young are unwilling to support the old then there will be no such thing
as retirement. Is that really what you want?

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toomuchtodo
As someone still young (32), I am hesitant to accept an obligation I was
unwilling to negotiate or choose myself.

If we can provide food, shelter, and energy to the elderly in an automated
fashion, how can there be no retirement?

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gshubert17
All humans are born into situations from which they benefit, without having
previously earned or merited it, and for which they have obligations, also
without having previously agreed to it.

Since that aspect of human nature seems to me impossible to change, my
attitude is to try to live with both benefits and obligations I have
"inherited".

~~~
toomuchtodo
> All humans are born into situations from which they benefit, without having
> previously earned or merited it, and for which they have obligations, also
> without having previously agreed to it.

But that is _by choice_ of those who choose to give birth to those people, not
those who are born. You bequeath those benefits onto the recipient (both as a
society and as parents) by creating/sustaining the environment into which
they're born.

> Since that aspect of human nature seems to me impossible to change, my
> attitude is to try to live with both benefits and obligations I have
> "inherited".

I as well, even though I might have disagreements with it. I don't have any
qualms about the amount I contribute into social security yearly (My income
surpasses the max contribution limit), nor that I have to support both of my
parents because of their poor life and financial choices.

The only recourse I have is to ensure that any children I have are as burden-
free as possible. I'm not just giving them the gift of life, but the gift of
freedom, which is equally priceless.

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calyth42
Aside from the government being a fiscal conservative, the word "tax" is a
dirty word for many ordinary Hong Kongers.

Their lack of tax diversity is also one of the main reasons why housing is so
damn expensive, because the government make money there.

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throwaway344
I found the paradox of this phenomenon and supposedly elder-friendly
Confucianism interesting.

