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Due to the ever-increasing population, some countries such as China and Japan, have implemented a tax legislation to promote families to have only one child each. This policy contributed to age the population which has become a subject to heated-debate. Any dispute regarding the aging population phenomenon, nowadays, may smack into the headlines. This essay will investigate the effect of this social issue which may cause severe side effect toward the aging society.
It is manifest that the aged people are less productive compare to younger generation. Thus, in the nature of business, it is indispensible to replace unproductive mature aged people to cost-effective younger ones. In aging population, however, it is difficult to find the substitute for the old expensive labour. As a result, the retirement age is required for the adjustment due to the lack of supply of the young professions. Consequently, aging labour market will contribute positively toward the employment rate.
Despite the assumption that the aging job market may benefit people through increasing retirement age and employment, there are some undoubtful detrimental effect; the inflation and government deficit. To eleborate, expensive mature labour cost will influence the overhead of the production. Nonetheless, almost full employment is achieved, people's wealth will be offset by the sky-rocketing inflation.
Furthermore, in terms of goverment budget, there will be incremental cost of the government pensions and the superannuations, but less income generated from young people. Consequently, young people will reach a conclusion that there is no gaurantee for the government to pay-off their superannuation contribution when they retire. As a example, Korean government officially passed the law that the government's obligation for the pensioner is imposed from next year. This action from the government have discouraged younger generations responsibility to pay taxes as well as superannuations.
To recapitulate, the aging society brings as desirable employment rate and retirement age. The downside of the phenomenon, however, must be taken into account. The neglection of rapid inflation as well as the governments deficit budget may have detrimental influence on young generation's attitude toward the society. The government and aged people need to operate in tendam to alleviate negative circumstances. |