World Bank President Ajay Banga says, “The best way to put a nail in the coffin of poverty is to give a person a job.” He says there is a time bomb ticking in the world. In the next 12 to 15 years, 1.2 billion people in emerging markets (the largest number in India) will be looking for a job, but only around 400 million will be available. “The gap of 800 million jobs is not a demographic dividend. If you are worried about illegal migration and military coups, just wait,” he warned the US Council on Foreign Relations this month.
Global demographics have changed. Not only are many young people looking for jobs, many more older persons must be cared for also. Life expectancy has been increasing and with it the numbers of years after ‘retirement’ age. Life expectancy in China increased from 42 in 1950 to 78 in 2024; in India, from 37 in 1950 to 70.6 in 2024. In the OECD, men and women were already living 8 years longer after their official retirement ages in 2020 than in 1970.
Older persons past their productive age are considered burdens on economies.
Governments cannot provide sufficient pensions and medical care without taxing younger persons who are earning and compelling them to save for their own needs later in life. With insufficient jobs, governments have run out of resources for care of older persons. Riots broke out in France in 2023 when the government tried to raise the retirement age from 62 to 64. There were riots in China also when the government recently proposed to raise the retirement age for the first time since 1950: from 50 to 55 for female blue-collar workers and 60 to 63 for male workers. A post went viral on Chinese social media. It said, “Capitalist exploitation has reached the common people. Brilliant!”
Milton Friedman and Ronald Regan’s economic paradigm has no solution for the demographic crisis. “Government is not the solution, it is the problem”, Regan said. Reduce the size of the government and its budget. Leave everything, including healthcare, education, and social infrastructure, to the private sector.
Many more young people will need work in the next twenty years. And more older persons will need care too. NITI Aayog’s report “Reforming the Senior Care Paradigm” has estimated that India’s ageing society is a USD 7 billion opportunity to grow a private, senior care, industry. However, the private sector cannot be the solution. Though it may be more efficient, it is designed to produce equity of the stock market kind, not social equity. Business institutions are not designed for providing health care for those who cannot pay. Their customers must pay for the services, directly or through insurance. Those who cannot afford to pay insurance premiums are shut out of healthcare. The US’s privatized health industry provides the most expensive healthcare in the world, and with poorer outcomes than countries with public health services.
The only work considered valuable in an economy is work that earns money. A woman caring for her child at home is not considered an economically productive human being. When she leaves her child to work for wages in a factory, she becomes a productive worker. Money is the currency for transactions in the economy. Exchanges in social organizations, such as families and communities, are not paid in the currency of money. People provide care to each other because they want to, not because they are paid to. Monetary valuations should not be used evaluate the worthiness of human beings. Older persons are not burdens on society, which they appear from an economic lens. They are societal assets, sadly neglected in modern societies.
Reform the economy to create a better society
The time has come to reimagine a ‘caring society’ and the forms of enterprises it needs. The quality of a society should not be harmed to increase the size of the economy. Rather, the economy must be redesigned to improve the quality of society.
‘Community form’ solutions are required rather than ‘industry form’ solutions. Industrial economies are organized for the efficiency and growth of economically productive enterprises Traditional social organizations, such as families and communities—considered ‘informal’ organizations by economists—are being broken to plug workers into ‘jobs’ fitted into ‘formal’ organizations, designed for efficient production, where they are paid in the currency of money. With the ‘formalization’ of the economy, social values are replaced by economic values.
Top-down solutions by global experts divided into knowledge silos are failing to solve complex global environment and societal problems. A new paradigm of systemic action is required—one that relies on more ‘community form’ (and less ‘factory form’) enterprises to solve complex problems on scale: with more local, community-based solutions, of the people, by the people, for the people.
(Published in Business Standard, July 2, 2025)