Low birth rates and an aging society are recurring subjects of national debate in Italy. Pundits, politicians and religious leaders regularly issue warnings about “empty cradles” and demographic decline. Does Italy really have an aging problem?
By Gaia Baracetti
Italians have a special reverence for their Constitution. It was written after the most traumatic time in our history as a unified nation by those who had risen up against Nazi fascism and thus redeemed their country. Putting aside their differences – not an easy feat in a country as divided as Italy – they agreed on a common set of principles and rules for the nascent democracy.
The first article of the Italian constitution states: Italy is a democratic Republic founded on labour. As far as I know, this emphasis on labour in the first article is unique among Western democracies. It says something deep and meaningful about who we want to be as a society and what we want to value. The irony is, by looking at Italy now, you’d never guess it. Only about a third of the Italian population is officially employed; among the working-age population, Italy has one of the lowest employment rates in Europe. An Italian sociologist, Luca Ricolfi, has devoted a book to explaining the paradox of a country where everyone is living large but no one seems to be working. As he points out, a small cohort of workers (and many de facto slaves) is supporting a large number not so much of children, as of spouses, older people, and unemployed. Sometimes I wonder whether we should reformulate our famous first article to read instead: Italy is a democratic Republic founded on pensions.
Italy has one of the oldest populations in the world; almost a quarter of its population is 65 or older. Our pension expenditure, the second highest among OECD countries, amounts to around 15% of total GDP and to about a third of all public expenditure (though not all pensions are given for age-related reasons). We also have a comparatively low actual retirement age; statistics here are harder to provide because, in typical Italian fashion, what the law prescribes and what happens in practice are very different things. The Italian island of Sardinia is one of the world’s only four “blue zones”, that is places where people are exceptionally long-living (you guessed it: Japan has another).
Is all of this good or bad?
Hard data can only tell you so much about the state of a country. Being an extended family-based society means that a lot of the work that in other Western countries people have gotten used to paying for is often performed by parents, spouses or relatives. Not all contributions to society come in the form of paid work. And if the American “Great Resignation” is any indication of the future, it’s possible that other societies might start following our example rather than the other way round. Still, this is not happening because salaries in Italy are so high that they make it easy to support a family with one income alone. On the contrary, a combination of nepotism and lack of recognition for merit, low salaries and a general disillusionment means that many young people are looking for work abroad. What’s left behind are a lot of pensioners and a crushing public debt. The question on everyone’s mind is: with so few young people, who will pay for pensions?
Preoccupation about low birth rates, an aging society and the depopulation of the uplands are almost a national obsession (looking at a map, you’ll see that Italy is largely made up of hills and mountains; these are much more forested and less populated than they used to be). Every time a new report comes out about Italy’s low fertility rate, any sensitive overpopulation activist must switch off all media for a while to avoid being bombarded with lamentations and ideas about how to “solve” the “problem”. Not to mention the Vatican.
There are a few, mostly common citizens, who dare point out that Italy is too crowded already and that the very slow decline in population we’ve begun experiencing in the last few years might even be a good thing. You’ll never hear a journalist, academic, let alone a politician, say anything of the sort.
My reading of the situation is that all of this is mostly the fault of a very selfish generation or two – mostly the Boomers – who do not want to give up their privileges and refuse to understand that their children, the grandchildren they claim to want and the environment itself are paying an extraordinary price for it.
The main problem is that our pension scheme was designed when the population was younger and life expectancy lower, the economy was booming, and letting people retire handsomely in their 40s (really) was seen by political parties as one good way to keep getting votes (and achieving formal full employment). Even now that we’ve realised we need to course correct, pension reform is one of our biggest taboos and even the young don’t want it. I know a few young people who cannot wait to retire, like the exploited worker dreaming of becoming a millionaire because he cannot even imagine a less unequal society. But if everyone either is a pensioner or wants to be a pensioner, who will support them? Immigrants! Or, the babies we must absolutely convince young people to have!
But it will never be possible to solve the pension problem through demographic growth; if anything, it will make matters worse.
As we’ve seen, a large number of those already here do not work anyway. Since wages are low and pensions are high, many prefer to stay home and be supported by their parents or grandparents (inheritance taxes are low too, so even your elders’ deaths can buy you a few years). This is not true for most migrants, who do not have such support networks and will take whatever work is available, thus contributing to keeping wages low. Also, hiring in Italy is prohibitively expensive; many small business owners prefer overworking themselves than getting help. And why is hiring so expensive? Mostly because taxes are high – those pensions need to be paid for somehow – and there is an infinite number of costs and regulations that in many cases serve no purpose at all, except to provide jobs to other people who are employed, but whose work brings no actual benefit to society.
Should we magically manage to employ all existing residents and then all those extra babies and extra immigrants many politicians tell us we should have, what happens when they, too, reach retirement age? We then have the same problem we were trying to solve, except now it is even bigger. This is how Ponzi schemes work. And they always crash.
All of this seems obvious to me, but apparently to no one else. Everyone wants to keep the retirement age low so that young people will enter the workforce. Literally everyone from the extreme right to the extreme left is campaigning for the rights of pensioners, and that includes labour unions – work has become so exploitative and dangerous that the main right workers want is that of leaving it as soon as possible. I’d even say that this refusal to negotiate on the inalienable rights of the elderly is one of the reasons we keep getting unelected prime ministers doing what the elected cannot or will not do, such as raising the retirement age or convincing the EU to let us take on even more debt.
Until we solve the pension problem, Italians will never accept a shrinking population as the blessing it is. It is really disheartening that all the benefits that come with an aging, demographically contracting society – less violence and conflict, a healthier environment, more wild or open spaces, lower house prices even – are not widely recognised due to greed and lack of imagination.
I’m stressing the pension issue because, even though many countries in the world are facing the same “problems” (or blessings perceived as problems, such as low birth rates), the solutions should be specific to each context. I believe that Italians are not worried about aging per se. As I mentioned, family bonds are strong and grandparents are valued. What people worry about is not having children around, on the one hand, and not being supported in their old age, on the other. They also worry about being “replaced” by foreigners, but this is beyond the scope of this discussion.
A society with few children might look “sad”, but that’s only because we’re looking at it the wrong way. It needs to be pointed out that children are an economic “burden” even more than the old (you can work at 70, but not at 7, and Italians also tend to spend an inordinate amount of time finishing their schooling). The disproportionate number of older people also might be more of a phase before a new equilibrium. At the moment the biggest age cohort in Italy is made up of those in their late 40s and early 50s. Some of those will die before old age; others will move up the pyramid like a snake’s meal, then die, and our population might settle into a more even distribution.
We are unlikely to go back in the foreseeable future to an actual pyramidal-looking population pyramid, but we should not aspire to that, as it would mean we’d have a growing population, and/or not many people surviving to old age. Yes, children are joyful, but they also need to be taken care of properly. Smaller families tend to endow children with better nutrition, healthcare, and parental support. Moreover, children don’t stay children forever. If, when they reach young adulthood, they are unable to find suitable employment, they will either migrate en masse or turn violent against each other as they compete for very limited resources, including jobs. We see this happening from Central America to Afghanistan to Nigeria to the Middle East, yet we don’t recognize it for what it is.
It’s true that healthcare for the elderly is very expensive, but modern, highly effective health care is expensive, and possibly unsustainable, in general. There aren’t many ways around this. We will need to work on prevention and make hard choices as a society about how much we want to spend on what. Children also require significant healthcare from pregnancy to the first vaccinations; the fact that we’ve made the choice to save every life means that children with rare and serious conditions will require a lot of financial support to receive the care they need. There are ways to find that money by reducing expenditure on other things or tackling the extreme inequality of contemporary societies.
Or – I am just putting this out there – we could decide for once that quality is more important than quantity, and that we do not actually want to live 110 years having spent the last thirty of those in a retirement home, or having deprived the young of their time and income to prolong our life past the time it was still enjoyable. One of the saddest results of Italy’s relative wealth is that our elderly are cared for, mostly, by foreign women who often aren’t raising their own families back home. There are stories about children left behind in Eastern Europe who rarely see their parents; they are in Western Europe, making our life comfortable.
Yes, Japan is trying out robots to care for old people; is this the future we want? A lot of research about healthcare and care for the elderly focuses on quantifiable outcomes, but we need first and foremost, as we come to terms with a reality of limited resources, to have an honest discussion about our values and priorities in life, and what we are willing to sacrifice for them.
At any rate, thanks to progress in healthcare, many pensioners are healthier than they could have expected to be a few decades ago. That is one more reason to ask people to retire later.
Among the many “solutions” proposed for the aging problem and a supposedly shrinking workforce, many of them informed by Japan’s experience, I personally do not believe in automation. In some sectors it’s probably here to stay, but my informed guess is that we have neither the energy nor the raw materials that would be necessary to automate as many jobs as we project. For a country such as ours, that is energy-poor but has a big artisanal tradition as well as an inequality problem, it doesn’t seem like more automation is the solution. Even in the car-making industry one of our most famous brands, Ferrari, a few years ago was bragging about not using many robots because humans, among other things, are more flexible. Humans are irreplaceable in so many ways. We also need to keep being able to make things with our hands instead of delegating everything to machines.
Yet another irony, in fact, is that a lot of people who do make their dream of retiring early come true are then bored, sad, or restless. So they find ways to keep working anyway – once again enjoying an unfair advantage over the working young who might then have to compete against people doing stuff for free.
Boomers are finding themselves on the receiving end of a lot of generational resentment. Some of it, unfortunately, is justified. They’ve created a world to suit their reality and their expectations of the future. Many seem unable to comprehend that times have changed and that their projects were never sustainable to begin with. Aging, both at an individual and at a collective level, often means an acquired mental stiffness; an inability to look at things differently, to re-imagine the world and take it in a new, better direction. And this is the only true aging problem we have.