The “graying” of the planet – The case of 30 of the world’s capitals

What do urban people care about most?What do talented professionals in their most productive working years care about most? What are the qualities that cities need in order to continue building prosperity? What about the increasing proportion of older citizens as we live longer or slow our rate of natural population growth? Does a rising percentage of people in their 70s, 80s, and 90s pose a threat to urban social and health services and city growth? Or does the very density of city life suggest a pathway into dealing with aging naturally and logically? Will longevity turn into value potential as elder citizens continue their vital engagement in city life?

To answer these questions, Cities of Opportunity 6: We the urban people looks through a number of lenses at the demographics of our 30 cities.

The study compares population statistics overall by the averages, segmented into six age groups: youth, young workers, prime age workers, seasoned workers, retirees including a share for those still working among this increasingly healthy age group, and the elderly over age 75.

Throughout the last few years of financial crises, the most prominent issue for governments, whether national or municipal, has been the so-called “demographic time bomb”: the aging popula- tion of the world as a whole and of individual countries in particular.3 Indeed, in the euro- zone, much of the debate around necessary structural reforms has centered on the issue of the sustainability of current retirement (and labor) policies, given the demographic realities of an aging Europe. In the event, some of our “vital statistics” are genuinely— and, often, surprisingly—illuminating.

Let us begin with Milan. Having the highest dependency ratio of all 30 cities in our report almost makes it a poster child of “old” and economically weakened Europe. But things are not as simple as they seem.

Mumbai has the second highest dependency ratio; Nairobi, an urban emblem during the last few years of current (and future) African economic dynamism, has the third highest; and it isn’t until we get to #7 on the list, Madrid, that we encounter another suppos- edly old, graying, and increasingly enfeebled European city. In fact, a closer look at depen- dency ratios reveals a much subtler image of present conditions and future prospects.

The fact is that, although the present discussion in most parts of the world concerning dependency rates is directed at one end of the relationship between work and dependency—that is, pensions and care for the elderly—both young and old are dependents of working-age populations that not only pay the pensions of retired workers but also build the schools and universities of those who have not yet graduated into the workforce. In both cases, simple numbers fail to tell the story: Are the young prepared for careers, and do jobs await them? Are the old extending their healthy, spending—and possibly even working—years into their late 60s and 70s or just enjoying the fruit of their past labors?

To move to specific examples among our cities, only one has a robust—that is, extremely low—percentage of dependents to working-age population: Dubai, at 17%. Two Chinese cities in our study, Beijing and Shanghai, also have vigorous percent- ages—22% and 27%, respectively—which means that Beijing has just over, and Shanghai just under, four people working for each dependent (under working age, retired, or elderly).

But after these three cities, a sharp drop in active working populations occurs; or put differently, there is a sharp increase in dependency ratios. Mexico City’s ratio translates into about 2.7 people per dependent, while those of San Francisco, Moscow, and Hong Kong come to about 2.5 people (39%–41%), followed by Berlin and Singapore at just over two people (46%).

At this point, the figures become even more interesting, since the next 21 cities, or 70% of the total, essentially find themselves in the same demographic pool, with ratios of about two or less workers per dependent (or 49%–63%). What is even more telling is that these cities span the globe and are almost evenly matched between mature (11) and emerging (10): from Europe to Asia to Africa to Latin America to Australia, they all seem to have dependency issues in less or more acute form.

Moreover, we can only project eight cities— Istanbul, Jakarta, Kuala Lumpur, Mexico
City, Mumbai, Nairobi, São Paulo, and Singapore—with lower dependency in 2025 (ranging from 1% to 9%), while Buenos Aires, Johannesburg, and Shanghai will all remain stable. That means that the other 19 cities will have higher percentages of dependents in a decade’s time—contributing to that ostensibly deadly “demographic time bomb” ticking away at the heart of urban civilization.

Chosen excerpts by Job Market Monitor. Read the whole story at  Cities of Opportunity: We the urban people: PwC.

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