Longevity economy

As we mourn the passing of former Cebu Gov. Pablo Garcia at age 95, there is one very important information in his outstanding resume’ that we must all remember. As he served as the representative of Cebu’s second district in the Lower House until 2013, he was then 87 years old.  And contrary to the old and antiquated perception that men and women of this age are idling and living on younger generations’ SSS contributions, he was very productive.

A productive life like that of Gov. Pablo Garcia’s necessitated a study about a decade ago by Oxford Economicsfor the American Association of Retired Persons (AARP) in the USA for the country’s population who are aged 50 years old and beyond. Collectively, they call the contribution of this group as Longevity Economy. In its release in 2013, its contribution was estimated to be about US$7.1 trillion in annual economic activity. In 2015 or in just about two years, the Longevity Economy’s size was already about US$7.6 trillion. If it were a country, it should have been the third largest economy in the world.

Notably, the report said that “it is the sum of all economic activity driven by the needs of Americans aged 50 and older, including both the products and services they purchase directly and the further economic activity this spending generates.” The “outsized contribution reflects the changing demographics, wealth, and spending patterns of the 50 and older population as the lifespan increases and the Longevity Economy becomes more pervasive and central to economic and social policies”, it added. 

By 2015, according to the report, “there were more than 1.6 billion people in the world who were part of the 50 and beyond age group.” It is projected that by 2050, this number shall double to nearly 3.2 billion people. This group consists of four generations. These are the GI Generation (born between 1901 and 1926), the Silent Generation (born between 1927 and 1945), Baby Boomers (born between 1946 and 1964), and Generation X or Gen X (born between 1965 and 1980). With this immense size, long experiences and unquestionable capabilities, they will surely have a very strong impact, economically and socially.

For one, as exhibited by former Gov. Pablo Garcia, majority of this age group are still very productive. On one hand, most of them are still employed and are earning wages and are not only fueling demand but are still directly paying taxes to the government. Others are active entrepreneurs and investors and are not just producing goods and services but are instrumental in providing jobs to the younger generations. Clearly, therefore, while it is true that some are idle or bedridden, most of them are huge contributors of valuable economic activities.

On the other hand, on the spending side, they are huge too. They set aside big amounts for health maintenance concerns (from inexpensive diapers to expensive food supplements, vitamins and maintenance drugs). Some hire caregivers too. To the physically active ones, they are big spenders too on leisure activities. With piles of cash in their bank accounts, even at their age, they are building mansions or buying condominiums and are purchasing extravagant cars.  Whatever they do, the fact remains that their activities have huge economic value.

Awash with cash, apart from their usual investments in the stock exchange, they have become angel investors too. They are supporting innovators and start-up companies get on the ground. Thus, helping propel and sustain economic growth. 

There are also those who are going beyond their usual economic contributions. Notably, it is in this age group where we see philanthropy at its best. In recent memory, we saw how Manny V. Pangilinan and Ramon S. Ang gave away millions to our Tokyo Olympics medalists.  There are thousands too who are also supporting livelihood programs and other initiatives for indigents.

With the advances in medical sciences, expect the population in the Longevity Economy to increase further. When we say increase, we don’t mean increasing the number of parasites (as some may call them) or those who are solely depending on younger generations’ SSS contributions. But increase in the number of healthy seniors who are still productive in their 70s, 80s and 90s. 

They shall not just drive demand for products and services, they shall also fund initiatives that shall produce them. Certainly, they shall be contributors on both sides of the economy.  Therefore, not parasites as stereotyped but as catalysts for growth.