8 million people retire every year, and the labor force will drop by 57 million in 10 years, what should I do if the pension is not enough?

Hello everyone, I'm Blue and White.

In the past two years, the number of elderly people around me has become more visible to the naked eye.

A few days ago, when I went to dinner, an old lady tied an apron and served the food tremblingly, I hurriedly caught the plate and said, Auntie, I'll come, I'll come.

When I went to the supermarket, my eyes were full of gray-haired elderly people queuing up to check out.

When you go out to play during the Qingming Festival, the scenic spot is crowded with people, and most of them are gray-haired.

Behind the subtle changes, there are some cold numbers.

Last year, the mainland disclosed for the first time the expected number of retirees in the 14th Five-Year Plan, and in five years, there will be more than 8 million retirees per year, compared with 4 million ~ 5 million per year in the past.

You know, this is just the number of retired urban workers.

In addition to this group, there are also a large number of rural elderly, elderly migrant workers, urban self-employed and unemployed, who need to be seen more.

The continent now accounts for nearly a quarter of the world's older population, close to Europe and North America combined.

Let's clarify a concept first, not that 60 years old is called an old person.

The international definition of the working population is 15-64 years old. The elderly population is defined as 65 years of age or older.

According to the estimates of China Merchants Macro, after 10 years, the elderly population in the mainland will increase to 333 million.

Lan Bai wants to talk to you today, how much impact will aging have on our economic life? How big is the gap between urban and rural areas, and how big is the gap in future pensions? What methods can alleviate the pressure of aging? For ordinary people, what knowledge and skills should they master to resist this wave of impact?

As I said before, the retirement tide is not terrible, but the terrible thing is that many people do not have the word retirement in their lives at all.

Chen Xiwen, an expert on agriculture and agriculture, said that the actual pension paid to farmers is only 188 yuan per month, which is only 5.26 percent of the average monthly pension of 3,577 yuan for urban workers.

188 pieces, for many people, may not even be enough for crayfish.

But looking at the whole country, it would be good if the subsidy of the basic pension could reach 200 yuan.

According to the statistics of China News Weekly, there are as many as 25 provinces with a basic pension of 100~200 yuan.

The lowest is Yunnan, with only 103 yuan, and Hunan and Sichuan are similar, only 105 yuan. Heilongjiang, Liaoning is 108 yuan, Anhui Province is 110 yuan.

Why is our aging population the most special? The problem lies in the "urban-rural binary difference".

If we compare the aging process of various countries, we will find that we are aging too fast.

It took 126 years for France to develop into a deeply aging society, 70 years for the United States, and only 20 years for us.

Some people say that this is not right, and Japan and South Korea also age fast.

There is nothing wrong with this, Japan took 25 years, which is similar to ours, and South Korea is even more outrageous, and it has developed to a deep aging population in 18 years.

There are fewer children and more old people, and the three East Asian countries are too similar.

But wait, we're a little different from South Korea and Japan.

Migrant workers at construction sites, flexible workers in takeaway ride-hailing, labor dispatch and outsourcing of courier waiters, household registration in the countryside, no home in the city, and they can only return to their hometowns when they are older, and their income has not kept up, and they are old.

In 2021, the mainland officially entered a deep aging society, when the per capita national income was US$11,950, equivalent to one-third of the same aging rate in Japan and South Korea.

The common feature of aging in East Asia is that it "starts late and accelerates fast".

However, because of the huge differences between urban and rural areas, we have a unique "grow old before you get rich" type of society.

The bigger impact comes from the decline in the labor force of 15-64 year olds.

Back in 2012, it was the peak of export and infrastructure growth, as well as the peak of China's labor force, reaching a staggering 1.006 billion.

In 2022, this number became 949 million, an average annual decrease of 7.125 million, equivalent to a decrease of one Fuzhou or Nanchang per year.

The consequence of "not enough young people" is that pensions are not enough.

In the absence of delayed retirement, after 3 years, the pension income will reach a peak of 6.99 trillion, after 4 years, it will begin to be unable to cover expenditure, and 11 years later, that is, in 2035, the fund will be exhausted.

This figure is not alarmist, it is a report issued by the Chinese Academy of Social Sciences, called "China Pension Actuarial Report 2019-2050".

The reason why the Chinese Academy of Social Sciences made such a radical prediction, in the final analysis, is because our social security is a "pay-as-you-go system": the pension is paid by the current generation of incumbents for the pension payment of the previous generation of retirees.

However, before 1997, people who had retired or worked did not have a personal account in the past, and these people received the most money after retirement.

This hole will become bigger and bigger as the retirement wave we mentioned at the beginning of the video accelerates.

What's our old way?

Transfer payment, to put it bluntly, is "pumping fat to make up for thinness", where there is money, contribute more to the poor brothers.

You can understand an indicator, called "insurance maintenance rate", the algorithm is very simple, the number of retirees/number of employees, the larger the number, the heavier the burden.

Guangdong, which has a large number of young people, has a pension rate of 17.4 percent, which is indeed not high.

However, in the Northeast, where retired uncles and aunts are gathered, the insurance maintenance rate is as high as 78.2%!

This old method of "tearing down the east wall and making up the west wall" is only suitable for the era when there are many young people.

In another ten or twenty years, will there be so many workers in Guangdong, how can there be spare time to take care of the villagers and the old iron?

Whether you can receive a retirement salary or not is not the first to press the table, the biggest trauma of aging to the society is actually to inhibit innovation.

According to a study in the Journal of Political Economy, among the 1.3 million individuals aged 15-60 in 83 countries around the world, senior positions in enterprises are often occupied by senior employees.

Aging reduces the propensity and proportion of entrepreneurship in all age groups, creating a so-called "blocking effect".

That is, the older the society, the fewer opportunities.

The promotion opportunities of young people are blocked by the elderly, which is the same as the dissatisfaction of the post-00s generation with the dividends of the 7080 generation.

What else can be done to alleviate the pressure of aging?

A very important way is to transfer state-owned assets to social security.

The transfer of 10% of the state-owned equity of central enterprises and local state-owned enterprises to the social security fund, which began in 2017 and was completed in March this year, can have tens of billions of annual dividends.

To put it simply, it is to use the real money of state-owned enterprises to save money in the piggy bank of the pension.

There is also the most talked about delayed retirement, this trick is easy to understand, since the water in the pool is not enough, then let the people who drink water line up more.

There have been media briefings on the two sessions this year, and there is a high probability that it will be delayed until the age of 65.

In addition, everyone should have heard of the "personal pension", saving 12,000 into the personal fund account every year, this money can not only buy financial products, but also can be used for pre-tax deductions, and the income generated by investment is not taxed, and can be received after retirement.

However, these methods can only slightly alleviate the pressure of aging.

After all, the scale of dividends of state-owned equity is limited, and the retirement age is delayed by 5 years, so what about after 5 years? Just like the expansion of graduate students to delay the pressure of employment, sooner or later we will have to face it.

For individuals, pension accounts are completely closed and can only be withdrawn after decades.

For those with low incomes, it doesn't matter whether there are tax incentives or not. If you have a high income, you can only save 12,000 a year, and you can't save much tax.

In the final analysis, the cake of social wealth is so big, and no matter how many ways to cut the cake, it is better to make the cake bigger.

How to make a big cake?

There is a term to be mentioned here, which is called "total factor productivity", that is, the ratio of total output to the input of all factors of production.

Our growth model relies on three factors of production: capital, labor, and land.

From 1978 to 2010, the hukou system was relaxed, the college entrance examination was resumed, and a large number of surplus labor from rural areas flowed to cities, superimposed on the baby boom in the 80s, and the population flowed freely.

Domestic demand drives urbanization, and external demand drives industrialization.

From steel and cement to construction machinery, from white and black electricity to consumer electronics, from automobiles, wind power and solar energy equipment.

Relying on the huge scale advantage, driven by labor and capital investment, in a very short period of time, productivity has increased rapidly, rewriting the global industrial pattern.

During this period, total factor productivity (TFP) boosted the economy by more than 3 percentage points.

However, from 2015 to 2019, the average annual pull of total factor productivity on the economy was only 0.2 percentage points, and the growth rate dropped sharply.

Why is it dropping so much?

The reason is very simple: under the threat of aging, there are no young people, who will sell the land to, who will produce, who will invest, who will spend money on infrastructure?

In other words, aging is like the "wise son" in the three-body problem, locking the ceiling of the three factors of production: capital, labor, and land.

What should we do if the elements of capital and labor are locked?

There is only one answer: technological progress.

There is an economist named Solow in the United States, who put forward a famous theory: long-term economic growth can only rely on technological progress, not on the input of capital and labor.

He also won the Nobel Prize in Economics for this theory.

The past three technological revolutions have been mechanization (marked by the invention of the steam engine), electrification (marked by the internal combustion engine and the use of electricity), and informatization (marked by the application of computers and the Internet).

Now, it is the fourth technological revolution marked by AI.

As we mentioned above, the threat of aging is the decline in the utility of labor and capital inputs, the inhibition of social security and the inhibition of young people's promotion and innovation, resulting in a decline in total factor productivity.

Let me give you an example of economic stagnation, have you found in your life:

The price of refrigerators, air conditioners, mobile phones and other electrical appliances is getting cheaper and cheaper, but the price of a meal, a show, and a haircut is getting higher and higher?

The reasons are: refrigerators, air conditioners, and washing machines are manufacturing industries, which are "progressive sectors", while cooks, hairdressers, and performances are service industries and "stagnant sectors".

The first three technological revolutions have caused the productivity of the manufacturing labor force to soar, and the factories no longer need so many people, and the labor force can only pour into the service industry.

The more workers and older the workers in the service sector, the lower the productivity of the workforce, the more discouraged young people from innovating, the less wealth they create, the harder it is to make money, and ultimately stagnation.

This is the "Baumore disease" in economics.

How can artificial intelligence solve these problems?

1. AI can learn by itself and can efficiently complete repetitive tasks such as bank tellers, hotel front desks, shopping mall sales and service personnel, teachers, doctors, financial analysts, accountants, and lawyers.

2. From travel, social networking to office and search, from entertainment and residence to education, finance and medical care, from paying for breakfast in the morning, to turning off the lights and sleeping with smart assistants at night, from remote medical registration diagnosis, remote personalized teaching in schools, to autonomous driving and commuting, AI can cover almost all service industry scenarios.

According to the Guojun Macro Report, if the tertiary industry jobs with low labor productivity are handed over to AI, the total factor productivity can be greatly improved and the "Baumol disease" can be fundamentally solved.

According to IDC statistics, the top five industries in Chinese artificial intelligence industry application penetration in 2022 are Internet, finance, government, telecommunications and manufacturing.

Obviously, most of the top rankings are in the service sector.

This is the biggest difference between the AI revolution and the previous three technological revolutions:

Rather than increasing labor productivity in the industrial sector, it is targeting the service sector, which has an aging population, is inefficient, and has the highest share of the economy.

In other words, in the process of integrating AI with people, the traditional economic growth model that relies on capital and labor will be changed, the labor productivity of the tertiary industry will be improved, and the scale of social wealth will be expanded.

Friends who pay attention to the policy trend know that there is a key word in 2024, called "new quality productivity".

How to understand this word?

In the past, productivity gains were based on huge labor and capital investments, and we have seen high-rise buildings rise from the ground, strong infrastructure networks and industrial systems, and a steady stream of goods produced, giving rise to thriving trade and busy ports.

But what about when the world gets older?

The upper limit of competition between countries is how the new productive forces explode in the "tertiary industry" with low labor productivity.

On the one hand, the accelerated aging of the labor force, and on the other hand, there is a once-in-a-century revolution in productivity.

Chinese population is more than four times that of the United States, more than 1 billion Internet users, 430 million car ownership, and huge consumption, travel, medical, tourism, logistics data resources.

The dual difference between urban and rural areas, hundreds of cities, 2,000 counties, urban and rural infrastructure, medical care, education, elderly care, and people's livelihood services are naturally suitable for the implementation of artificial intelligence scenarios.

Yuan Changhong, the "father of QR codes", sighed after seeing the wave of mobile payment in China: it can be widely used among ordinary users, which he never expected.

In the same way, AI is now a large model for improving efficiency, dialogue and search, painting and data analysis, and with the support of China's large market scale, complete industrial categories and huge user base, the development potential is immeasurable.

From 2000 to 2020, China produced 60 million engineers, and the number of programmers will reach 6 million in 2023, which is the cornerstone of China's transition from "demographic dividend" to "engineer dividend" in the era of aging + AI.

We have no shortage of talents, no shortage of scenarios, and no shortage of users.

After the famine and turmoil of the past 30 years, the fear of aging now looms large.

Social security is not enough, labor is not enough, consumption expectations have changed, and the problems are one after another.

However, the Chinese pay attention to "poverty is thinking about change", and under the torrent of the times, the ups and downs of ordinary people's fortunes and social changes have just begun.

"With the heart of birth, do the things that enter the world", to try, to change, I hope that we will all have something to rely on.

I'm Lan Bai, let's talk about this today, and we'll see you next time.