Brussels sounds alarm about EU’s rapidly ageing population

The European Union’s Ageing Population Threatens Competitiveness and Inequality

These are some of the disquieting findings from a new report on demographic change released by the European Commission on Wednesday, which paints an alarming picture of the profound societal and economic transformation triggered by a shrinking workforce.

Challenges Faced by Member States

• In the Netherlands, housing and population density are key challenges.
• In some regions of Spain, population decline is a major concern.
• In Italy, declining birth rates and an ageing population are the key challenges.
• Greece has the fastest ageing population among the member states.
• Croatia struggles with brain drain of younger persons.

The Impact on the EU’s Population

According to the report, the EU’s population, which was slightly over 448 million people earlier this year, is projected to reach its peak around 2026 and then gradually decrease, losing 57.4 million working-age people by 2100. More worryingly, the bloc’s dependency ratio — the ratio of the number of elderly people compared to the number of people of working age — will surge from 33% today to 60% by the end of the century.

Implications for the Labour Market and Public Budgets

The drastic shift in the demographic pyramid will upend the labour market, with widespread shortages that could inhibit growth, productivity, and innovation rates, and therefore accelerate the loss of competitiveness vis-à-vis other major economies.

A dwindling workforce will inevitably reduce revenue for state coffers while piling additional pressure on public budgets to spend more on healthcare and pensions, an explosive combination that could divert attention away from the much-needed investments in renewable energy and cutting-edge technologies.

Recommendations for Member States

Before the damage becomes irreversible, the Commission recommends member states take decisive action, such as:

1. Closing the gender pay gap
2. Improving work-life balance
3. Offering tax benefits
4. Reducing childcare costs
5. Making it easier for young people to access quality jobs and affordable housing earlier in their adult lives

Brussels also says it is crucial to empower older workers to remain active for longer through upskilling programs and flexible working hours, and urges businesses to overcome preconceived notions and stereotypes about the elderly.

“Longer lives create new opportunities and usher in a shift from an ageing society to a longevity society,” Šuica said, calling on countries to tap into the new economic opportunities created by the so-called “silver economy.”

Managed Legal Migration

In another recommendation, the report calls for “managed legal migration” to fill the surging number of job vacancies, which are already at record highs. The bloc, which is in the midst of a hard-fought push to reform its asylum policy, received last year 3 million migrant workers via legal pathways compared to 300,000 who arrived through irregular means.

During the presentation, Šuica underlined several times that, while legal migration was a valuable option to address the demographic challenge, it was not the only one, a clarification that appeared designed to avoid the wrath of hard-right governments that have espoused pro-natality policies in a bid to boost the birth rate of the local population without relying on migration flows.

“We are 27 democracies,” Šuica said. “It’s a different situation and this is the reason why we say that there is no one size fits all.”

SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 3: Good Health and Well-being
• SDG 4: Quality Education
• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities
• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action
• SDG 16: Peace, Justice, and Strong Institutions

The issues highlighted in the article, such as the ageing population, labour shortages, public budgets, regional inequalities, and the need for renewable energy and cutting-edge technologies, are connected to these SDGs.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential healthcare services, and access to safe, effective, quality, and affordable essential medicines and vaccines.
• Target 4.4: By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs, and entrepreneurship.
• Target 5.1: End all forms of discrimination against all women and girls everywhere.
• Target 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• Target 10.2: By 2030, empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion, or economic or other status.
• Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for participatory, integrated, and sustainable human settlement planning and management in all countries.
• Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
• Target 16.6: Develop effective, accountable, and transparent institutions at all levels.

The article discusses the need to achieve these targets in order to address the challenges posed by the ageing population and other related issues.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 3.8.1: Coverage of essential health services.
• Indicator 4.4.1: Proportion of youth and adults with information and communications technology (ICT) skills, by type of skill.
• Indicator 5.1.1: Whether or not legal frameworks are in place to promote, enforce, and monitor equality and non-discrimination on the basis of sex.
• Indicator 8.5.1: Average hourly earnings of female and male employees, by occupation, age group, and persons with disabilities.
• Indicator 10.2.1: Proportion of people living below 50 percent of median income, by age group, sex, and persons with disabilities.
• Indicator 11.3.1: Ratio of land consumption rate to population growth rate.
• Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning measures into national policies, strategies, and planning.
• Indicator 16.6.1: Primary government expenditures as a proportion of original approved budget, by sector (or by budget codes or similar), disaggregated by sex, age, and persons with disabilities.

The article implies the need to measure progress towards these indicators in order to track the achievement of the identified targets.

SDGs, Targets, and Indicators Table