[DongleDongle] "Is it the Great Depression?"... The Silver Tsunami Hitting the US

Increase in Elderly Homeless in Major US Cities
Failure to Accumulate Assets Due to Economic Crisis in Youth
Low Pensions and High Rent Lead to Homelessness
Surge in Applicants for Medical and Housing Support

News has emerged that South Korea's employment rate among the elderly ranks first among the Organization for Economic Cooperation and Development (OECD) countries. As of 2021, the employment rate for those aged 66 and older was recorded at 44.6%. This figure is nearly double that of the United States (22.3%) and Australia (19.1%).

The reason why elderly people return to the workforce is attributed to insufficient retirement preparation and inadequate pensions. In fact, according to 2021 statistics from the Korean Statistical Office, South Korea's elderly poverty rate (37.6%) is the highest among OECD countries.

However, since the COVID-19 pandemic, the United States has also been struggling with poverty issues among the elderly. Recently, the number of homeless individuals from the Baby Boomer generation (born 1946?1964) has rapidly increased. What has caused these people to be pushed onto the streets?

Increase in Elderly Homeless in Major US Cities... 'Silver Tsunami' Approaching

The Wall Street Journal (WSJ) recently focused on the sharp rise in the proportion of elderly homeless people in major cities such as Miami, Florida, and New York City.

A homeless person is loading belongings onto a shopping cart in Phoenix, Arizona, USA. [Image source=Getty Images]

Looking at cities individually, Miami in Florida and Denver County recorded homeless rates for those aged 55 and older at 31.4% and 27.9%, respectively, last year. Before the pandemic in 2019, the proportion of homeless people over 55 was only 25.8% and 22.7%. Over three years, the number of homeless people increased by more than 22%.

These figures are compiled from statistics by homeless support centers in each state. Nationwide statistics for all US states have not yet been released. The US Department of Housing and Urban Development (HUD) has begun a belated investigation covering all states after observing the rapid increase in elderly homelessness. The data recently released by HUD is from 2017, which showed that among those staying in homeless shelters, 23% were aged 51 or older. This represents a 6.5 percentage point increase compared to 2007. It is expected that the elderly homeless rate will be even higher when this year's statistics are released.

Experts have started calling the growing phenomenon of elderly people losing their homes and being pushed onto the streets the "Silver Tsunami." Dennis Culhane, a professor at the University of Pennsylvania, pointed out, "The increase in elderly homelessness is a phenomenon not seen since the Great Depression."

Rents Rise While Pensions Remain Low... Economic Crisis Delays Asset Accumulation

Why have Baby Boomers become homeless? The cause lies in rising rents. Since the 2008 global financial crisis, housing rents in the US have increased sharply. Due to the subprime mortgage crisis, real estate prices fell, construction companies gave up building homes, and a long-term supply shortage accumulated, causing rents to soar rapidly.

A man in his 50s is working at the manufacturing plant of Ford, a U.S. automobile manufacturer.
[Photo by Getty Images Bank]

In contrast, social security benefits have only increased slightly and have not kept pace with rising rents. The average social security benefit in the US this year is $1,791 (approximately 2,375,762 KRW). This is a 26% increase compared to $1,425 in 2019, before the pandemic. Meanwhile, housing prices soared by 61% during the same period, from $1,655 to $2,669.

WSJ reported that while elderly people earn about $1,000 to $1,100 per month, the rent for a studio apartment is at least $1,800, far exceeding their income.

Moreover, analyses suggest that the younger Baby Boomer generation in their 60s has not accumulated more retirement assets than the older Baby Boomer generation. They experienced the oil crisis during their childhood in the 1970s, the dot-com bubble burst and Nasdaq crash in their 30s during the 2000s, and the 2008 global financial crisis in their 40s. After turning 60, they lost part-time jobs they had taken after retirement due to job cuts caused by COVID-19.

WSJ explains that the Baby Boomer generation faced consecutive economic crises during their youth and adulthood, leading them to work in jobs that do not provide pensions. As a result, they have inevitably fallen behind other generations in wealth accumulation.

Baby Boomer Poverty Leads to Welfare System Crisis

There are concerns that poverty among Baby Boomers could eventually lead to the collapse of the US welfare system.

[Image source=Bloomberg]

Already, the number of elderly people relying on welfare policies is increasing across the US. A nonprofit organization in Florida rents out 11 buildings at low cost for the elderly, but there are 3,500 people on the waiting list. In Pinellas County, Florida, 2,600 people have applied for government-supported medical assistance programs. The average annual cost of nursing home rooms reaches $110,000, forcing elderly people who cannot afford this to depend on welfare policies.

South Korea, which has a higher elderly poverty rate than the US, is also facing elderly poverty as a social issue. However, South Korea is among the OECD countries with the lowest government expenditure on public pensions, second only to Iceland. It may be time for members of society to come together and consider how much more taxpayers should bear in welfare costs to reduce elderly poverty.

This content was produced with the assistance of AI translation services.