Our Aging Population Can Be An Economic Powerhouse–If We Let It

By 2050, the number of people over 65 will more than double. Cities, communities, companies–and our entire culture–have some adjusting to do. If we can, the benefits will be enormous.

Our Aging Population Can Be An Economic Powerhouse–If We Let It
Illustration: Oliver Munday Illustration: Oliver Munday

Patrick O’Halloran is 82 years old, “but I’m still a work in progress,” he says. After a long career as a Jesuit priest and a clinical psychologist in San Francisco, O’Halloran retired to the northwest part of San Mateo, California, where he lives alone. He’s sprightly: His exercise routine includes circuit training, cardio, and boxing, and he volunteers at a nearby jail, teaching classes in mindfulness.


O’Halloran’s doctor tells him he has maybe five to 10 years left living on his own, but he’s considering a move to a senior center sooner; he’s social, and he doesn’t like living without easy access to people to chat with. But there’s one sticking point. “I need to talk to young people–millennials,” he says. “At the senior center, I can sit down and schmooze, talk about jitterbugging,” he says. “But it’s all the same perspective.”

The Impending Graying Crisis

Like many people heading into their later years, O’Halloran has found himself in a bind. He’s not ready to give up on the things that give him energy–communication, conversation, sharing different experiences and perspectives–for the homogeneity of a senior center. But as an older person in America, he finds himself in a world that’s not set up to receive what he can offer. “It’s the saddest thing we hear people say: Our world starts to die around us before we’re ready to,” says Vandana Pant, the senior director of strategic initiatives for Palo Alto Medical Foundation, which provides senior care services in San Mateo, where O’Halloran lives.

Like climate change, says Paul Irving, the chair of the Center for the Future of Aging at the Milken Institute, the graying of the U.S. population–and that of the whole world–is a phenomenon that has been a long time coming, but that we remain largely unprepared to confront. The fact that science has basically doubled lifespans in the past century and a half, Irving says, “is maybe the most extraordinary accomplishment in the history of mankind.” But unless we shift our attitudes and responses to aging, it will go from being a miracle to a crisis.

Underpinning both the infrastructural and economic shifts that must occur to accommodate the rapidly graying population is something more intangible: We need to adjust our overall attitude toward growing old. As a culture, we tend to treat aging as a separate phase, not an extension of the same life. “You see people in retirement communities and they’re infantilized, spoken to as if they were infants even though they’ve lived these rich lives and had remarkable experiences,” Irving says.

Our cultural and structural disregard for older populations “is almost the last prejudice we’re allowed to have,” says Kathryn Lawler, the director of the Atlanta Regional Commission’s Area Agency on Aging. Which is deeply ironic: Not only is aging–if one is blessed with a long life and good health–one of the few truly universal experiences, it is something that is becoming more and more pervasive. By 2050, the global population of people aged 60 and older will rise to 2 billion, up from 900 million in 2015. Every day in the United States, 10,000 people turn 65. Between 1990 and 2013, global life expectancy rose by around six years, from 65.3 to 71.5 (removing accidental death from fatal crashes or overdoses raises these estimates by around a year). For people born today, the likelihood that they will live to triple digits is strong: A child born in 2011 has a one-in-three chance of living to her 100th birthday.


These facts invite a range of concerns, from what aging people will do with a prospective extra three decades of leisure given that the retirement age is still typically 65, to how social security could and should change in response: When the retirement security was introduced in 1935, the average life expectancy was just around 62, lower than the retirement age, which, even then, was still 65. The proportion of adults collecting social security was significantly lower when the benefit was introduced, and they would live, on average, for fewer years after stopping work. Now, that’s not the case, and the safety net is stretched to snapping. Among the middle age and younger populations, anxiety about caregiving responsibilities is growing.

In many ways, aging is a personal concern, but coping with this demographic shift will not come down to individual effort. Rather, it’s going to take a comprehensive approach–on the part of cities, communities, and companies–to make room for a population that has much to offer, and that we all, someday, will be a part of.

Re-Imagining The Aging City

In 2006, the World Health Organization (WHO) convened a meeting with city leaders in Vancouver, Canada to discuss the parallel trends of global aging and urbanization: By 2030, around three out of every five people will live in cities, and many of those people will be elderly. Out of that conference, the WHO released a guide to “Global Age-Friendly Cities,” which outlines a comprehensive framework that cities can and should adopt in order to allow their older populations to remain in place–instead of being moved to senior centers or retirement communities in places like Florida–and contribute actively to their communities. The WHO’s Age Friendly Cities And Communities Program, which was designed to foster dialogue and information-sharing around how to meet the needs of older residents, has grown to over 1,000 community members in 20 nations; in the U.S., the affiliate program launched in 2012 and, run through the AARP (formerly the American Association of Retired People), contains 148 communities representing more than 61 million people.

In 2010, Portland, Oregon applied to become to become a member of the WHO’s Global Network of Age-Friendly cities; it was among the original nine metro areas selected, and the first in the United States. The application required cities to perform a baseline age-friendliness assessment, and present a three-year plan to improve that metric. Portland’s plan, drafted in 2013 in conjunction with the City of Portland and the Portland State University Institute on Aging, addresses the key areas for improvement outlined in the original WHO guidelines: housing, transportation, outdoor spaces and buildings, civic participation and volunteerism, employment and the economy, social participation, community and information, community services, and health services.

The scope and detail of Portland’s plan, which is now in its third year of implementation, can serve as a baseline blueprint for other cities looking to follow suit, but they key, Irving says, will be for cities and communities to approach the productive integration of aging communities as something that benefits not just the elderly population, but people of all ages. The Center for the Future of Aging at the Milken Institute, which Irving took over two years ago, “wants to draw attention not just to the challenges, but to the opportunities that this massive growth in human capital represents,” Irving says. At the core of that shift will necessarily be a philosophy of breaking down generational boundaries, that older people and younger people can and should benefit from each other.


Integrating Our Systems

For truly productive intergenerational communication and collaboration to take place, though, our cities and communities will have to engage in some fairly comprehensive structural overhauls. When the WHO surveyed seniors across the globe, they heard a range of feedback: There aren’t enough benches in public spaces; sidewalks are cracked and narrow. One person from Halifax said, quite simply: “Cross lights are made for Olympic runners.” Irving says that “urban designers need to think more about creating communities that are walkable and accessible and safe, but also attractive to this changing demography.”

While there’s room for improvement in every corner of infrastructure, Lawler names two places to start: transportation and housing. “At the heart of the issue is that communities have to have choice,” Lawler says. Structurally, communities tend to sequester aging populations into specific systems: senior centers and vans that transport elderly people from said centers to whatever activity is designated for them that day. By ensuring that communities are flexible and responsive to a variety of needs across ages, people can “age in place and not have to miss a beat,” Lawler says.

WHO outlines a list of requirements for upgrading transit systems for aging populations, and includes the expected: Making timetables and arrival boards legible; adding adequate priority seating; ensuring the routes run to destinations like medical facilities and parks. “But the sharing economy also presents an opportunity,” Irving says. Companies like Lyft and, eventually, autonomous vehicles, will make it possible for older people who can’t drive to access their communities without sacrificing the ease of getting into a car. While 88% of adults continue to drive at age 65, that proportion drops to 69% by 75. In many areas, though–particularly where public transportation is not fully fleshed out–driving remains one of the only consistent options for transit.

Only a quarter of people aged 65 and older have a smartphone (though that number will grow), but 82% who do say owning one is “freeing.” Forbes spoke to one Uber driver in Los Angeles who said 40% of her passengers were elderly; their grandchildren downloaded the app for them.

And there are a handful of apps geared more specifically toward the aging demographic. Lift Hero, a ridesharing service for seniors, has already capitalized on this idea, connecting elderly people in need of rides with drivers–many of them training to become doctors–who will get them where they need to go, and recognize any additional needs. Another tool, called Circulation, launched last fall to provide non-emergency transport for patients in need of seeing the doctor. It’s integrated with Uber’s API and hospital’s electronic records. Though the tool initially launched in partnership with the Boston Children’s Hospital, co-founder and CEO Robin Heffernan told HealthEgy that the service is also essential for seniors.


But transportation is only one side of the coin. It’s not enough to provide easy routes in between destinations if the destinations themselves are not places seniors really want to be. Dismantling the senior-center living model is at the heart of architect Matthias Hollwich’s book, New Aging: Live Smarter Now to Live Better Forever, which he released last year as a manifesto on how to age in place creatively and productively. In tandem with the book, Hollwich’s firm, Hollwich Kushner, released a prototype design for an intergenerational living building called Skyler, which would include services for all ages: a nursery for young kids where seniors can care for them, a spiritual center, and an open-plan design to foster connection.

When looking into options for his next move, O’Halloran says that he was disappointed by the likelihood that he will end up in a senior home. He’d prefer an intergenerational model, like the combination nursing home-college dorms that have recently sprung up in the Netherlands, but even those facilities, to O’Halloran, are not perfect solutions. It’s not enough to put people of different ages into the same living space and hope they collaborate, O’Halloran says: living facilities also need to be integrated with systems that facilitate collaboration and meeting needs for all who live there. These types of developments, too, in conjunction with more comprehensive transportation options, will go a long way toward ensuring aging residents will be able to remain in their communities.

In the Pat Crowley House, one of three multigenerational living facilities run by Housing Opportunities & Maintenance for the Elderly in Chicago, younger residents–often college students–help their older roommates with computer questions and cook dinner on the weekends; the organization plans activities for residents, like trips to Garfield Park Conservatory, but most of the bonding happens organically, over shared TV shows and stories. The Chicago Tribune reports that while the arrangement is uncommon, it’s a “welcome option as society prepares to deal with the needs and challenges of a dramatically growing community.”

Seeing the Economic Benefit

In addition to improving lives for older Americans, there’s an economic benefit to communities and living arrangements that structure themselves in a way that allows older people to remain in place. The Atlanta Regional Commission (ARC), where Lawler works, performed an economic analysis of the impact of welcoming retirees in the 20-county area around the city. By adding an additional 1,000 new residents aged 65 or older, the ARC found that the region would see a $7.8 billion increase in its GDP. Keeping aging people in communities—and attracting new people of traditional retirement age and above–is an economic force on par with tourism, says Mike Alexander, research and analytics manager for the ARC. On a national scale, an Oxford Economics report found that the “longevity economy” is one of the most vital in the U.S., with 106 million people over the age of 50 collectively responsible for $7.6 trillion in annual economic activity, spending $4.6 trillion on consumer goods and services, and in particular, the health care industry.

In the longevity economy, the Oxford Economics report adds, 90% of seniors say they want to be able to remain in their own home as they age; this will require more robust and adaptable transit options, as outlined above, as well as innovative supportive housing, like the Pat Crowley house, becoming more widespread. The report also adds that the longevity economy also presents a business opportunity for the development of “aging-in-place” technology like MedMinder–an automated system that reminds people to take their prescribed pills. Overhauling how homes and communities respond to the needs of aging people will help keep them in place and contributing to the local economy.


Yet it’s not just spending power that should be a motive for keeping elderly people in communities and active in the economy. As part of Hollwich’s design for Skyler, he included an in-building business hub where seniors can pursue business ventures. The majority of entrepreneurs are actually middle-aged or approaching 65, and with more and more people hitting what was once considered “retirement age,” it’s impractical for cities and communities to count on young people alone to act as economic drivers. By 2022, it’s estimated that around 31.9% of people between the ages of 65 and 74 will remain in the workplace—as opposed to 20.4% in 2002. Despite the “lump-of-labor” fallacy, which arises from the faulty idea that the amount of labor available to all demographics is fixed (and previously invoked when women began to enter the workforce in large numbers), welcoming more older people into the workforce will not detract from the number of jobs available to younger workers. Rather, recent cross-national studies have show that higher rates of employed elderly people generally denote strong economic circumstances–which correspond with more jobs for younger workers.

Diversity in the workplace is crucial: It creates a more inclusive environment for a wide variety of talent, and it has positive ramifications for businesses’ bottom line. But diversity in business is generally talked about in terms of race, gender, and sexuality. “We have to begin to talk about aging being a part of the diversity matrix,” Irving says. As a Boomer who works on a team with millennials, Irving has seen firsthand how people of different ages can collaborate to produce innovate business solutions. “If I were advising a tech entrepreneur today about how to compose her workforce, rather than telling her to go hire two twenty-something Stanford grads with engineering degrees or two 65-year-olds who used to work in the aerospace industry, I’d tell her to hire one of each—one will bring the creativity and risk-taking, and the other will bring the experience and ability to see across sectors.”

Companies like BMW are already taking this approach: In 2007, the German manufacturer realized that over the next 10 years, the average age of its workforce would increase from 39 to 47. Instead of panicking, BMW decided to adjust and figure out how to best incorporate older workers into all aspects of production. The company chose one production line to model what they called the “2017 project”–a workforce that accurately reflected demographics for that year. Though younger workers on the line initially feared the influx of elderly workers would lower their productivity, the 70 management tweaks that BMW made–from introducing part-time work to providing workers with shoes designed to reduce the pains of standing–which amounted to a €20,000 investment, brought about a 7% increase in productivity. Contrary to the younger workers’ concerns, integrating an older workforce benefited all.

However, it’s impossible to discuss the economics of welcoming older people into the workforce without also asking what happens when they leave it. Social security, as previously noted, was introduced at a time when average life expectancy was lower than the age of retirement; now, the boom in people availing of the benefit has set the program on a path toward a $32 trillion shortfall. However, Christine Herbes-Sommers, who produced the forthcoming documentary Coming of Age in An Aging America, says that over the course of her filming, she consistently heard one solution: Raising the maximum taxable income cap. Currently, people only pay taxes on social security on the first $118,000 they make; if you make more than that, it’s not taxed for social security at all. By raising that level to $215,000–a move that 88% of respondents to a Washington Post poll support–could provide the benefit the staying power it needs to withstand changing demographics. “If you look at this issue first through a telescope, then through a microscope, you can actually see solutions,” Hebres-Sommers says.

Changing The Cultural Tides

Implementing the solutions that Hebres-Sommers alludes to will require action now, and on the part of a generation that still might view the aging process as a remote concern. But collapsing the barriers between old and young will be perhaps the most crucial step in fostering these wide-spread changes. That will start with communication: There’s much that younger generations stand to learn from older generations. Hollwich imagines younger folks reaching out to the older people in their communities for advice and knowledge of the world that they might not otherwise have access to. And older adults would be receptive: The Harvard Medical School professor George Vaillant conducted a study on seniors’ attitudes toward helping the younger generation, and found that those who acted as tutors or mentors were three times as likely as their peers to feel joy instead of despair as they hit 70.


For aging people, the benefits of staying active and engaged with the whole spectrum of their communities are enormous. Social isolation has been called “a growing epidemic” by The New York Times, and it’s one that has an immediate effect on health: Adults who say they are lonely—a number which has doubled to 40% since the 1980s—have a 30% higher chance of dying in the next seven years than those who are surrounded by strong connections. The health risks of isolation are apparent: 43% of socially isolated seniors report receiving little or no help in managing their illnesses. The risk of diseases like Alzheimer’s is also exacerbated by isolation, but researchers have found that participating in “purposeful activity” in the aging process can slow cognitive decline by 30%.

“Purposeful aging” can take on a variety of forms. Continuing education programs, like the University of Wisconsin-Madison’s, which allows seniors to take classes for free, are something that more educational institutions should consider offering as a way to integrate older populations into community cornerstones. And there’s also volunteerism: Nearly a quarter of people 55 and older in the U.S. volunteer, contributing more than 3.3 million hours of service at food banks and fundraising enterprise in 2015, and bringing about an economic benefit of $77 billion dollars.

There’s a reason that Hebres-Sommers’s documentary, which will premiere in March at the American Society on Aging conference in Chicago, focuses as much on people in their 20s as it does people staring down their 80s: these shifts need to happen now, and they need to start with the generation coming of age now. “What we’ve focused on is the fact that this is a historic, transformative demographic shift,” Hebres-Sommers says. “And it’s not just the Boomers–it’s the future.”

Patrick O’Halloran solved his version of these problems, oddly enough, through some mail he didn’t read. Every day, he would pick his mail up and drop it in a pile, where it would accumulate, untouched. “I know the school of thought that says you should open everything you receive right away and deal with it,” he says. But he couldn’t bring himself to subscribe to it. “Never have,” he says. “I’m not apologizing for it.” But he was missing payments, and thought it might help to have someone come by to help him out.

O’Halloran had heard of a program called linkAges through a local retirement center where he sometimes goes and gives talks; the program, run through Sutter Health and Palo Alto Medical Foundation’s innovation center, acts as a platform where people of all ages can post requests for aid and offer assistance in return. It’s sort of like TaskRabbit, but reciprocal, and designed with intergenerational connectivity in mind. Since it launched in 2013, over 1,000 users have joined; around 420 are seniors. The first volunteer who came to help O’Halloran was a student at Santa Clara University. On one of her visits, she brought three friends and O’Halloran ordered pizza; they spent the day just hanging out and sharing stories. “It’s really fun, to be able to go back and forth like that,” O’Halloran says. “I have something to give and share, and I have something to gain.”


About the author

Eillie Anzilotti is an assistant editor for Fast Company's Ideas section, covering sustainability, social good, and alternative economies. Previously, she wrote for CityLab.