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Rory
Post  Post subject: OADR  |  Posted: Fri Dec 23, 2016 7:41 pm
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At what point would the old age dependency ratio (OADR), the number of over-65s per 1000 working age citizens, become unsustainable to the extent that society falls over?

Japan is projected to reach an OADR of 74% by 2050 - almost one worker supporting one OAP.

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iNow
Post  Post subject: Re: OADR  |  Posted: Fri Dec 23, 2016 8:19 pm
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Doesn't that depend upon what other policies and programs are in place, on what other things fiscal outlays are made and how that relates to revenues?

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Rory
Post  Post subject: Re: OADR  |  Posted: Fri Dec 23, 2016 8:51 pm
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Yes. Let's assume the current context of the US?

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iNow
Post  Post subject: Re: OADR  |  Posted: Fri Dec 23, 2016 8:59 pm
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Baby boomers are retiring and that makes labor force participation rate numbers drop, but replacement numbers (new babies born) don't warrant any immediate concern. Japan is a different story.

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Rory
Post  Post subject: Re: OADR  |  Posted: Fri Dec 23, 2016 10:08 pm
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No, what I'm asking is, what OADR would be required to topple US society in its current economic state?

Would it be 1 worker to 1 OAP?

Would it be 1 worker to 3 OAPs?

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iNow
Post  Post subject: Re: OADR  |  Posted: Fri Dec 23, 2016 11:32 pm
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Oh, thank you for clarifying. I'm not interested in sharing ideas about how to topple the world in which my children will grow up. Maybe someone else will join.

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Rory
Post  Post subject: Re: OADR  |  Posted: Fri Dec 23, 2016 11:43 pm
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I'm not trying to make it happen :lol:

Just curious as to where the tipping point lies

You're over-sensitive, sometimes, iNow

Should we also not discuss what might be the critical level of atmospheric CO2, since that would be to share ideas on how to destroy the world in which your children will grow up?

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Lynx_Fox
Post  Post subject: Re: OADR  |  Posted: Sat Dec 24, 2016 2:44 am

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Why do you think there is a tipping point at all?

We're already at the point of technology where automation is doing most of the basic production compared to past decades.... a single farmer doing the work of 100 farmers a century ago. If anything is broken, it's the assumption that we might have to replace, invent or contrive enough employment to provide 40 hour work weeks for most folks--why? Why not a 30 hour work week, or a 20 hour one by 2050? If, for example, 50% of the US production profit wasnt' going to less than 2% of the US population but perhaps to social programs for the elderly and disabled--we'd be able to drive your ratio to much much higher numbers.


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Rory
Post  Post subject: Re: OADR  |  Posted: Sat Dec 24, 2016 9:44 am
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In the current US economic context.

AFAIK that is not the current reality in the US.

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iNow
Post  Post subject: Re: OADR  |  Posted: Sat Dec 24, 2016 4:15 pm
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I'm not easily confused, but am admittedly struggling with this one.

Please clarify how this:
Rory wrote:
In the current US economic context.

AFAIK that is not the current reality in the US.

Is in any way an answer to this:

Lynx_Fox wrote:
Why do you think there is a tipping point at all?

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Rory
Post  Post subject: Re: OADR  |  Posted: Sat Dec 24, 2016 5:10 pm
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Lynx's argument seemed to be that we can avert any tipping point through massive scale automation. I was reminding him that the economic calibration for the thought experiment is current day US, in which there isn't that extent of automation, and in which a healthy GDP depends upon most workers putting in 37 hpw.

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iNow
Post  Post subject: Re: OADR  |  Posted: Sat Dec 24, 2016 9:19 pm
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Number of hours worked tells you only how many hours an employee was clocked in. Nothing more. It doesn't touch productivity, output, scale, individual competence, or any of the countless other variables central to having this type of discussion involving GDP.

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Rory
Post  Post subject: Re: OADR  |  Posted: Sat Dec 24, 2016 11:14 pm
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Assuming the current productivity rate. I don't get what's so hard about the concept of using the here and now as the context for the thought experiment.

Literally you will do anything to disagree with me.


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Lynx_Fox
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 2:41 am

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Rory wrote:
Lynx's argument seemed to be that we can avert any tipping point through massive scale automation. I was reminding him that the economic calibration for the thought experiment is current day US, in which there isn't that extent of automation, and in which a healthy GDP depends upon most workers putting in 37 hpw.


No I'm not suggesting we're going to avert any tipping point through massive scale automation. I'm suggesting the length of the work week and our insistent on 40-hour jobs to maintain a living wage (which isn't even true for many) has to change. Automation is already here and accelerating and it's only blind conservative idiots that look elsewhere that refuse to see it. As already mentioned it's already replaced farming jobs in large part, and most jobs lost in the mining areas are already gone--though we want to blame trade deals. Transportation jobs, already largely replaced by networking and computerised inventory management cut that industry to a 3rd of what it used to be (by tonnage moved) will probably be almost entirely replaced as robot truck drivers taken the road in mass over the next decade or two.

Here's a study of job types most vulnerable to complete replacement soon based on existing technology.....but I have no doubt idiots will continue to look elsewhere and vote more clowns to high office rather than adapt to the new reality. The net result is GDP becomes increasingly less dependent on full 40 hour employment and already could easily provide basic needs to everyone if 2% (of which half were inherented wealth...e.g., the Donald) weren't getting 50% of the benefits. That disproportionate gain more than anything defines "the tipping point."

http://www.mining.com/study-shows-96-of ... automated/


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Rory
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 8:32 am
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Okay, so you are suggesting that if we redistribute the wealth of the top 1-2% of the populace, that we could fund the livelihoods of both workers and OAPs?

Conceptually I would be willing agree that it's a nice idea. Good luck with making it happen in a system that is designed around the needs of the elite.

Also, your point has no relevance to the OP, in which I asked about the OADR threshold in the current US. In the current US, the top 1-2% have not redistributed their wealth to others.

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Lynx_Fox
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 3:21 pm

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Rory wrote:
Also, your point has no relevance to the OP, in which I asked about the OADR threshold in the current US. In the current US, the top 1-2% have not redistributed their wealth to others.


Then you should write your OP much better and not refer to the forecast for 2050. You made it relevant from your very first post, it's not other's fault you didn't consider some of the main drivers for our economy.


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Rory
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 4:09 pm
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Yes, I would be interested in different contexts, but iNow asked me to specify one, so I picked current day US.

I either ignore iNow's advice or yours. Either way one of you is pissed with me :lol:

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iNow
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 5:10 pm
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Let's reset and make sure we are all on the same page.

What question and under what conditions are we exploring here?

As already noted above, some of us reject the underlying premise of a tipping point and acknowledge that details very much matter. Saying today's USA isn't terribly helpful either given the enormous flux and policy shifts currently taking placeas presidents transition from Obama to Trump.

Be specific.

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Rory
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 5:26 pm
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Specifically, this second in time, in the US. I have chosen this snapshot in time as, hopefully, this will be familiar to all members, either directly or indirectly through news reports.

If we start at the extremes, 1 worker to 1,000 OAPs obviously wouldn't be sustainable. I believe the ratio is about 3:1 workers:OAPs in the UK right now, so, empirically, that's do-able. There must be a tipping point between the two extremes, at which feasibility nudges over a cliff edge. What is that tipping point?

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iNow
Post  Post subject: Re: OADR  |  Posted: Sun Dec 25, 2016 5:34 pm
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Depends on what other policies and programs are in place, on what other things fiscal outlays are made and how that relates to revenues.

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Rory
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 12:06 am
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That's not a number ;)

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Lynx_Fox
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 8:35 am

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Don't think you'll get a number.

Though I think it's probably a much lower ratio than you might think. Quite a few folks over 65 continue to work.... in the US it's quite common to find folk in their 70s still working. In various surveys and studies you'll also find roughly 25% of that age group do lots of meaningful volunteer work. I'm not over 65 yet, but effectively retired doing multiple volunteer jobs from being an EMT making hundreds of emergency response calls a year, and active in search and rescue--there are several in my community nearly as active in their mid 70's effectively doing what tax payers would fork out tens of thousands of dollars a year to accomplish if not for their efforts.


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Rory
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 11:25 am
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Full time nursing home care funded by local councils in the UK = £430 per week, £1720 per month.

Median salary (2016) = £27,000 per annum, £2,250 per month

Basic rate of tax = 20%

Tax revenue = £450 per month

Assuming that all of the tax revenue were diverted purely to funding nursing home care, then it would take 3.8 workers to support one OAP receiving full time care.

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Lynx_Fox
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 3:48 pm

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In the US only about 4% of retired folk are in nursing homes..... so if that was the only expense and making the huge assumption that the older people were unlucky enough not to have their own means the ratio would be fine at 1:4.


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Rory
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 4:31 pm
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Okay so we also need to consider provision of part time residential care, state age pension, free public travel, free TV licence, energy grants.

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Rory
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 5:11 pm
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And also the fact that we cannot afford to allocate the totality of income tax to elder care, unless we don't mind having no schools, hospitals, welfare, roads, rail or housing.

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Lynx_Fox
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 8:42 pm

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Rory wrote:
And also the fact that we cannot afford to allocate the totality of income tax to elder care, unless we don't mind having no schools, hospitals, welfare, roads, rail or housing.


Again depends on the country. State pensions are usually already paid for, so that effectively cost nothing; much of the elderly care is the same paid by the individual either in the past or through their existing personal wealth. It's a lot more complex than just looking at cost and assuming that's the burden to young working people.


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Rory
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 9:31 pm
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In theory, UK workers' national insurance (NI) contributions fund their state pension, but in reality the feasibility even of this scheme has been called into question:

State pension cash could run out, The Independent

https://www.google.co.uk/amp/www.independent.co.uk/news/business/news/state-pension-cash-could-run-out-report-claims-9790258.html%3Famp

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iNow
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 10:36 pm
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Since starting this thread several days ago, you said you were talking about the US, at least seven different times, actually:
Rory wrote:
Let's assume the current context of the US?
Rory wrote:
what OADR would be required to topple US society in its current economic state?
Rory wrote:
In the current US economic context.
Rory wrote:
the economic calibration for the thought experiment is current day US
Rory wrote:
I asked about the OADR threshold in the current US. In the current US...
Rory wrote:
I picked current day US.
Rory wrote:
Specifically, this second in time, in the US. I have chosen this snapshot in time...

Then beginning a few hours ago and in each of the last few posts you moved the goalposts to UK.

So, Rory... Which is it? US or UK? Details matter.

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Rory
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 11:05 pm
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Sorry, you're right, the US.

But nobody else was playing ball so I decided to play by myself using a system that I am more familiar with.

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iNow
Post  Post subject: Re: OADR  |  Posted: Mon Dec 26, 2016 11:40 pm
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Rory wrote:
nobody else was playing ball so I decided to play by myself

Such an approach is better suited to a blog than a forum.

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Rory
Post  Post subject: Re: OADR  |  Posted: Tue Dec 27, 2016 12:35 am
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Well, you came back, didn't you :)

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