In recent posts, I discussed a proposal to set a maximum voting age (55 years old) to correct a distortion of an aging population on the effectiveness of democracy. I reasoned that the earlier success of democracy coincidentally involved a young population with a low median age due to population growth and due to high death rates for older persons. Today the population growth is slower and the lifespans are increasing due to fewer hazards, better living conditions, and better health care. These are all excellent developments. But, the aging population distorts deliberation within democracy. Increasingly, the deliberation is monopolized by the elderly and the consequences predominantly burden the young. This result is a less agile democracy with an increasingly alienated population of working-age adults that must supply most of the burdens for supporting government. Perhaps, the declining workforce participation rates may partially be a result of this frustration.
I also discussed implications on health policy where I similarly proposed a maximum age for government subsidization of healthcare and set that age also at 55. The point I was making is that our priority should be on providing care to young people to live healthily through their adulthood through raising a family and seeing the children establish themselves in their adulthood. I also reasoned that if we were successful in making the young years healthy then their older selves will have higher life expectancy even without further healthcare intervention. In this scheme, older people still have access to excellent health care. It will just not be subsidized by the government.
To provide appropriate health insurance to older adults, I earlier proposed returning to the older model of health insurance that makes separate risk pools for young and old. The young population would enjoy Affordable Care Act type care with no pre-existing condition exclusions and with government subsidies, but the difference would be that their premiums would be cheaper because they will not fund the insurance of older adults. Meanwhile, the older adults would participate in risk pools specifically for older adults. These insurance policies would be similar to plans available before Affordable Care Act (or even before Medicare). For example, the policies may exclude pre-existing conditions following a lapse of coverage. The older adult risk pool would have to fund their own insurance.
In all of these discussions I am suggesting a division of the government into two different populations: a younger population and a older population where the dividing line is the age 55. This age is still before retirement (expected around 65), but this age is needed to allow for a sufficiently large population in the older cohort to meet the above objectives of having adequate sized risk pools and to avoid excessive influence on democratic politics.
Another policy area that can benefit from a age division is labor policies. We could benefit from having separate policies for younger adults and older adults. The younger group would work under existing labor laws that provide for minimum wage, employer contributions to social security and health insurance, restrictions on working hours, compensation for overtime, definition of exemptions, etc. In contrast, the older group would be exempt from all of these laws or work under more lenient set of laws.
In particular, I support restricting the laws for age discrimination to apply only for workers younger than 55. Older adults retain the right to work as long as they are able to find work. However, employers should not be obligated to continue employment of formerly young employees when sufficiently qualified younger candidates are available. In those scenarios, the older people (over 55) will need to compete for their jobs without an automatic presumption that the job is theirs. They will need to show they can do the job far more cost-effectively than the younger contenders.
While one of the qualifications of older workers is their seniority and longer experience, usually this experience is not competitive. In many cases, the older person is doing a very similar job he was first hired to do as a younger person. When he was younger, he showed that he was able to pick up the responsibilities and thus he was able to keep the job. This older person initially succeeded despite starting without experience. A new younger candidate has a similar promise of succeeding when given the same opportunity. The experience alone is not enough to compete for retaining these jobs.
The older adult either can show that he has skills that the younger candidate does not have and that would take too long for the younger candidate to acquire. This situation is likely to be very rare. Most jobs can be learned quickly, often within a few weeks or months. The jobs that cannot be learned quickly would present a risk to organization that such a irreplaceable individual would suddenly quit or die. Few jobs are that secure.
The older adult’s continued employment will not be able to compete on cost. He would have enjoyed decades of compounding merit increases and is now presenting higher costs for things like additional earned vacation time and higher health expenses. When age discrimination laws no longer apply, the older adult would have to take a pay cut, a cut in vacation time, and make a higher contribution into health insurance in order to compete with the younger person.
Again, I think there is a fixed age that divides younger and older workers. Below that age, the workers are fully covered by labor laws including age discrimination. For example, a company can not discriminate against a 40 year old in favor of a 30 year old. It is only above the cut-off age that a different and far less restrictive set of labor laws would apply. The people in this older age group can still work, but they will need to compete on cost effective merit instead of having their jobs protected by the government. A person who loses his job of youth can still find a different job where there is less competition by young adults. Such jobs will likely have lower benefits from the one previously held.
If we had adopted this two-population approach to labor laws at the beginning, then the population would adapt be preparing for a career disruption at the cut-off age. After that age, they may continue to work but with fewer benefits than they had when they belonged to the younger group. This will put more emphasis on savings during youth because the income will be less certain in later years.
I would set the labor-law cut-off age at 55 years old. This is consistent with the ages I mentioned above for voting ages and health insurance risk pools. Also it is consistent with the definition of working-age population in computing workforce participation and with the convention of a the earliest age to start retirement or a pension. People over 55 can continue to work as long as they like. They will simply have to work with fewer government protections. In addition to losing age-discrimination protection, but they will lose protections such as minimum wage or mandatory overtime pay. They will also lose benefits such as employer contributions to social security or to health insurance premiums.
This two-population workforce is slowly emerging in our culture where older adults are increasingly working as independent contractors (1099 tax status). While 1099 contractors include many younger workers, there are a growing number of older adults who have had experience by former employers but are now competing on short term contracts. The contracts typically are short term and provide no benefits. Continuation of the work requires re-competing for the same job against a different set of contending candidates. The 1099-contractor status is a de facto implementation of this two working population model. Coincidentally, many older workers with prior experience as younger employees are now working as 1099 contractors that are exempt from many labor laws governing employees.
This trend gives younger employees opportunities to take on more challenging roles without the interference of an older worker who will demand obedience to his preferences. The younger person would be able to innovate to solve problems with a fresher perspective (of their more recent education and experience in modern culture) while building upon the legacy knowledge of the existing system.
The older staff available from 1099 arrangements may be able to provide advice and insight from lessons learned, but they will not have the authority to demand that the younger staff follow their suggestions. As a consultant, the older worker must persuade the younger person of the wisdom of the suggestion instead of relying on obedience to rank.
An objection to setting a maximum age such as 55 for coverage under labor laws is that this will reduce the pool of mentors for younger employees. Once people reach 55 years old, their jobs can be terminated without violating any laws. These people have a lot of corporate knowledge that could benefit younger workers. One answer to this objection is that the company is not obligated to terminate employees older than 55. If the person is widely recognized as having expertise on corporate knowledge, the company will likely retain this person. The ones terminated are less likely to offer this value.
Another response to the loss of mentoring is that mentoring is most valuable when there is a moderate differences in experience. My impression is that the best mentors have 10-20 years more experience than the protege. This biggest need for mentoring is for younger workers in their their 20s. Thus, their eligible mentors would be in their late 30s or in their 40s. By the time a worker reaches his 50s, his value as a mentor is probably more limited to the rare exceptional talent that the company expects to advance quickly. In that scenario, though, the older workers job is probably very secure in that exceptional experience he has to offer to the trainee. However, in general the loss of employees over 55 will not result in a loss of mentoring opportunities for younger workers.
In the future, I hope to continue to explore the idea of a formally splitting the US economy into two separate economies based on age cohorts. Each economy would follow its own rules and customs. I think a clear split of these economies can provide major benefits to the national economy as whole by recognizing the inherent difference in the values offered and protections needed for the two age cohorts. For example, it will eliminate the current distortions of having old people compete with young people for jobs and for social status. The economic environments they occupy will be fundamentally different.
For this post, I wanted to combine these ideas as evidence to support my earlier proposal to impose a maximum voting age and set that age to be 55. This is politically unrealistic because these older persons will exercise their current right to vote to prevent such a change. One of my arguments to set the age at 55 is because it represents a significant portion of the population. Their numbers will be sufficient to prevent any democratic imposition of such a rule. Also, they will be joined by younger people who rely on rallying older voters in their voting drives.
It is not feasible to get someone to give up their right to vote. People perceive any loss of the right to vote as a punishment for some crime. It is not a crime to get old.
I still think it is healthy for democracy to limit voting eligibility to an age range of adults who have the most burden to make the government work. The past success of democracies probably depended on the generally younger electorate population. The current dysfunction of democracy may be a result of the aging population: giving too much voting power to the population that is largely shielded from the burdens of governing.
Instead of losing the right to vote, we may be able to redirect the votes to a different function of government. We could dividing government into two parts each with its own minimum voting age and a requirement that a voter can only participate in one of the two.
One government has a minimum voting age of 16. This government will be responsible for the daily operation of the government. This includes oversight and funding of bureaucracies, managing the department of defense, conducting foreign policy, managing taxes, etc. Ideally, this government would operate under a balanced budget with the exceptions of clearly defined investments (such as infrastructure projects) that have specific periods for paying back.
The other government has a minimum voting age of 55. Upon reaching this age, a person can voluntarily participate in this part of government but when he does he forfeits his participation in the first government. Participation in this government should offer many advantages that will encourage this switch in voting privileges. This second government would be responsible for all of the entitlement and personal benefit programs of the government. These are expenses unrelated to the operation of the government. This government’s focus is on the welfare of the people. While this will include welfare for younger adults, the bulk of the benefits will go to older people. This government will also be responsible for servicing all of the government debts, including operational debts likely incurred when the voters were younger.
For the purposes of allocating entitlement benefits, this government will have full control without interference of the younger government. The older voting age requirement may be justified by the additional maturity desired for making these types of benefit allocation decisions.
The entitlement government can raise funds by taxing its own population of eligible voters (people over 55), or by requesting funds from the operational government that can tax the younger people. The entitlement government will not have direct access to tax the younger generation. Instead it must negotiate with the operational government to obtain the required contributions. I assume there are sufficient political incentives for the operational government to impose taxes to fund the entitlement government. The voters in the operational government will recognize the need for supporting the entitlements. However, the exchange is purely a transfer of funds. The entitlement government itself gets to decide how to allocate the funds.
The entitlement government is responsible for serving the debt. I would also grant them the power to incur more debt to make payments. However, they will then be responsible to service that debt as well, and that will further restrict the available funds for allocating to entitlements.
Because the funds are reduced by the need to service the debt, this allocation of entitlements will become a very important issue especially for the older population. This importance should be a strong incentive for older adults to enlist in voting rights for this government and give up their voting rights in the operational government.
The entitlement government is also responsible for managing other aspects of governing the older population. This will include governing healthcare, health insurance, labor laws, and so on for individuals who are over 55. These laws will require deliberation specific to the context of the realities that this older population faces. For example, their health-insurance will focus on issues of aging instead of health needs more likely to occur in youth (such as raising children). Another example is that labor laws such as setting a minimum wage will consider the income needs of older adults instead of assuming the need to raise a family of a certain size. These laws governing older adults may be more or less restrictive but my point is that the deliberation will be more focused on the specific context of an older population.
Future blog posts would be required to explore more aspects of this two-part government. For example, although older adults may not vote for the operational government, they could hold positions in that government, including executive level positions.
For now, I present this as just an idea that we can divide our current political problems into two groups: one focused on the operation of government that primarily burdens younger people, and the other for managing entitlements that primarily benefit the older people. Dividing the government into two parts will allow both to come up with more optimal solutions for each population.
8 thoughts on “Adapting to modern aging populations: government of two cohorts”
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This article illustrates the problem in the current government where people receiving government benefits (in this case for health care) do not recognize these as government benefits:
These people are voters for government and they assume that their benefits do not represent costs to the government.
Dividing government into two distinct voting groups with the senior citizens exclusively participating in government of allocating entitlements (including health care subsidies) will demand that they become better informed about costs of the government policies. Their government will have to pay for entitlements and debt service with the funds available to them. Also, their exclusion from operational government concerns will focus their attention on managing these expenses instead of merely assuming they are not a burden to the government.
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Future discussion should consider how law enforcement and criminal justice will work in a parallel government of two age cohorts. How will laws be enforced when the criminal and victim belong to different age cohorts as in this example. In the two-cohort government the police will almost certain belong to the young cohort and likely the prosecutor and judge will also be young. If cross-cohort crime occurs, how would a jury be constituted: peers of the older cohort or the younger? Also, if the person charged with a crime is older and deserves a jury of peers of his own cohort, what laws apply: the laws issued by the younger cohort or the older one, or both?
The older cohort probably lacks the power to make laws because it lacks a police force and justice system to enforce the laws. Also, the older cohort may have different rights in the court system, perhaps second class to the younger cohort but also perhaps with special protections unavailable to the younger. This would be interesting to see how this would work out.
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