This article was posted in Aussie Firebug’s FIRE discussion group on Facebook and, as a child-free person myself, the headline caught my attention enough to have a read and then take a look at the research upon which the article is based (the article being, like many these days, fairly superficial).
The research was UK-based, focused on how the Coronavirus pandemic has affected peoples’ retirement plans and pension savings, and only sampled 2000 people so was quite narrowly focused. (However, it would be interesting to see whether the same views hold true in other Western countries.)
While neither the article nor the research gave any indication of what age Generation Z considered to be ‘early’ in relation to retirement, the research did show that Gen Z thinks people should retire around 57, and that 10% of current Gen Z-ers indicated that they intend to remain child-free so they can retire early.
It’s pretty much impossible to determine just what percentage of the population at large is consciously working towards FIRE – regardless of which country you’re in – but it surely has to be more than just us bloggers and the members of the various FIRE-focused groups on social media; there’s bound to be people on this path who prefer not to talk about it. I’m no data scientist, but I’m reasonably sure 10% is a significant percentage for one demographic group. I tend to think of FIRE as being not all that well-known, but it would seem from this that the concept, if not the movement itself, is more widespread than I realised.
Anyway, the article got me thinking about how this might play out long term. Not just in terms of huge proportions of young people forgoing having children so much (although the outcome of that would certainly be interesting to say the least), but what our society would look like if everyone worked towards FIRE from when they first start earning. I don’t have answers, just questions, but here are some of the things that occurred to me. Just a couple of words of warning first – a) this may not flow all that well or even be particularly logical because I’m just spit-balling here, and b) this might get a bit dystopian. (I do read a lot of speculative fiction, after all. 😊)
One of the reasons that most of us are working towards FIRE (or, at least, FI) is to have the ability to walk away from a crappy job if we need to. Whether the work itself is unengaging or the management style is untenable, having savings and/or an income stream that isn’t reliant on employment puts you in a position of power. But what if everyone had this option after, say, about 10-20 years of working, earning and investing?
What if everyone chose to retire early or, at least, only work part time? Would we see better working conditions? Would we see employers competing for workers, rather than workers competing for jobs? And what effect could that have on rates of pay? Would employers offer higher wages to attract good candidates? However, capitalism needs a large pool of people to form the workforce, and those people need to be kept, if not necessarily poor, financially limited enough that they rely on having to work to be able to live, buy or rent a home, and feed, clothe & educate their children (if they have any). Perhaps instead we’d see unions outlawed completely, forcing individuals to negotiate their remuneration with their employer directly in an effort to keep wages down, resulting in anyone who misses the FIRE boat never being able to reach financial independence; maybe there’s a natural point at which the FIRE movement itself creates a society where FIRE is no longer attainable. This, however, would be highly undesirable. The architect of Australia’s superannuation system, former Prime Minister Paul Keating, introduced compulsory superannuation in 1992 because he could see the writing on the wall for our ageing population. Over a four-part series on the ABC’s 7:30, ‘The Future of Retirement’, Mr Keating has been arguing for the legislated rise in the superannuation guarantee to go ahead (if you’re not aware, the current government has been debating undoing that legislation as a result of the recent Retirement Income Review). He pointed out that the number of taxpayers supporting each social security recipient has been steadily decreasing from 6.7 in 1992 to 3.7 today and is expected to be only 3 by 2030. He then went on to say that, given those projections, the pension in the future may not be as generous as it is today, therefore the ability to fund one’s own retirement is more important than ever. “Nothing beats self-provision,” he said.
Maybe, as is becoming more popular amongst younger demographics, more people will become content creators and make their income from YouTube, Twitch, TikTok and other online platforms. But then, what if, because everyone is retiring early and/or making their money online, there simply aren’t enough workers to do the work that needs to be done to keep society running? I for one would not want to lose industries like garbage collection and sewerage systems maintenance for lack of people willing to do that work – although perhaps these will become fully automated eventually. Perhaps some industries will become unnecessary altogether.
If we return to the theme of the article, while it’s highly unlikely that the majority of young people will choose not to have children, what if a large enough percentage of them do that eventually there aren’t enough wage-earners in the system to generate the taxes that pay for our society’s infrastructure and services (as projected by Paul Keating)? Or, if the balance swings that far, they’re then taxed so heavily to compensate that their ability to save and invest is then wiped out? I can’t imagine any government, even a progressive one, failing to address what would become a massive societal imbalance that would completely throw out of whack all of a country’s economic and social mechanisms. There are only two ways of increasing population that I’m aware of – having a higher rate of births than deaths, and immigration. Given the rise of terrorist activity in recent decades, immigration has become less favourable with governments, but perhaps that stance may change. As for how a government might go about encouraging more women to have children or encouraging those who do want to have children to have more than they would prefer, well, the “baby bonus” we’ve had going in Australia for quite a while now apparently hasn’t increased our birth rate. I doubt that these kinds of financial incentives would help much in the long term, particularly if the potential parents were already happily financially independent.
However, much of the reasoning for not having children is not simply an aversion to the processes of pregnancy and childbirth, which put a lot of strain on the mother’s body, or the significant costs of child-raising, it’s more often driven by environmental concerns. This is not just considering the impact of another human being’s consumption of the earth’s resources, although many young people are deeply concerned about whether our planet can continue to sustain the current population levels, much less an increased population. These days it’s more likely to be concern about what kind of world these children will be left with due to the effects of climate change. They worry whether the earth will remain liveable at all and therefore see their decision to remain child-free as being both environmentally responsible and socially responsible towards the life they’ve chosen not to bring into the world.
On the positive side, if a large proportion of FIRE-ees choose to work part time or not at all, that would (presumably) make positions available for those who need them. Maybe the employment rate, rather than the unemployment rate, would become a focus of government policy. A reduction in unemployment also tends to lead to a reduction in petty crime rates (organised crime is a whole other kettle of fish).
Additionally, those FIRE-ees that do choose to continue working once reaching FI have the choice to work in voluntary roles or in jobs that may pay less but provide more satisfaction. They may choose to do work that contributes to society in a positive way, thereby helping to create a better society for all who live in it. Perhaps that work might contribute to improving conditions in developing countries – in fact, there are plenty of businesses that have been started up by younger generations with the express aim of improving the lot of citizens in these parts of the world. Off the top of my head I can think of:
- the ‘Thank You’ company, which started with bottled water (which they have now gotten out of due to environmental concerns around single-use plastics) to help provide access to safe, clean water in third world countries. They have since changed direction into personal and baby care consumables with the aim of ending extreme poverty.
- ‘Who Gives a Crap’ toilet paper, who donate 50% of their profits to the building of toilets and sanitation systems in third world countries to help combat disease. And yes, I do use their TP! And their tissues. In fact, they’re the reason I didn’t need to panic-buy TP at the start of the pandemic 😊.
Imagine a society where, because the citizens don’t need to spend nearly fifty years working a minimum of five days every week, peoples’ time can be spent doing the things that actually keep our society functioning and ensure that those who can’t manage for themselves can be taken care of. I’m thinking our elderly for a start – if most adults didn’t need to work (beyond the initial period where they work to reach FI), many older people might not need to go into aged care until they got to a point where that level of professional care is absolutely necessary. Families would be free to help ageing relatives stay in their own home longer. The same goes for children – most parents say that they wish they could spend more time with their kids. All the things that are currently done by volunteers and parents to ensure that children get the opportunity to participate in sport or the arts or whatever other extracurricular interest they may have could be spread across a larger number of people, reducing the burden on those who currently do most of this work. Even simply having the free time to give to individual children to help them grow as people could help combat what seems to have been an exponential growth in mental health issues amongst young people in the past couple of decades.
With more free time, people could pay more attention to their health and fitness, including their mental health. You can’t use the “I don’t have time” excuse when you don’t have to work (and we don’t want to end up like the people depicted in Pixar’s Wall-E). This could reduce the dependence on our health systems. Having time to interact with others socially and strengthen your relationships both inside and outside your family contributes to better mental/emotional health and helps to stave off the cognitive decline that leads to Alzheimer’s Disease or dementia. Even our pets would benefit from more interaction with their owners. And, for that matter, owners would benefit from more interaction with their pets. As they say, all pets are therapy pets, but most of them are freelancing. 🙂
What other potential outcomes do you think could come from a world on FIRE?