Gold Collar Seniors
A Force for Social Change
Taiwan's baby boomers are redefining the meaning of "old" and forming a powerful and affluent "gold collar" wave, ready to help younger generations create a new economic miracle.
A Force for Social ChangeBy Whitney Huang, Judy Lin, Yunfang Tao
From CommonWealth Magazine (vol. 504 )
As baby-boomers head into retirement, the concept of aging is being redefined. Where in the past retirees were thought to be destined to a cruel fate bedeviled by old age, poverty and sickness, "getting old" no longer implies a solitary existence.
That's because the influence of a group of "gold collar seniors" is on the rise around the world. This golden class not only has money, contacts and experience, but is also in good health because of the advances of modern medicine.
According to several studies, these baby boomers generally hold about 50 to 80 percent of the wealth in developed countries, and the United States Census Bureau estimates they hold 75 percent of the assets in the U.S.
In his book The Pinch: How the Baby Boomers Stole Their Children's Future, Conservative Member of Parliament David Willetts asserts that British baby boomers aged 45 to 65 hold more than half (3.5 trillion pounds) of the country's 6.7 trillion pounds of national wealth, with another 2.3 trillion pounds held by those over 65.
Corporate strategist Kenichi Ohmae noted in one of his books that senior citizens have the largest holdings of financial assets of any group in Japan, and those holdings are increasing as people age. In fact, Japanese people die with an average of 35 million yen (about NT$9.8 million) in assets in hand.
A similar phenomenon is emerging in Taiwan.
During their lifetimes, the country's baby boomers have gone from having to cope with a harsh economic environment to enjoying the benefits of rapid economic growth. These were times that produced heroes, and they were the heroes that made the age. In many different fields, in many different companies, this generation shouldered the heavy burden of starting from scratch and delivering prosperity.
Today, these retired or soon-to-be-retired baby boomers have emerged as the group of seniors with the most experience, power, knowledge, and resources in the history of the ethnic Chinese world.
In 2011, Taiwanese citizens aged 65 or over had average disposable incomes of more than NT$32,000 a month, far above the average starting pay of NT$26,000 per month earned by college graduates in 2011, according to the Directorate General of Budget, Accounting and Statistics (DGBAS) 2011 Survey of Family Income and Expenditure.
The DGBAS did not provide a statistical analysis of the assets held by Taiwanese citizens. In its survey of Taiwan's Top 1,000 Enterprises, however, CommonWealth Magazine found that 72 percent of the chairmen of the country's biggest enterprises are 56 or older, and this older guard had assets of NT$41.95 trillion, about 89 percent of the assets of the top 1,000 companies. As in many other countries, Taiwan's baby boomers stand out as a relatively wealthy "gold collar" class.
Many of these "gold collar seniors" spent the first half of their lives working arduously to make money, but now they are confronted with a completely different problem: how to spend it.
"How should I spend the money I toiled hard to earn? To me, it really is a big question," says Hsu Wen-lung, the founder of the Chi Mei Group. "Making money is difficult, but spending money is even more difficult."
This reluctance among the elderly to spend could have profound economic consequences for both Taiwan and Japan at a time when their populations are aging rapidly. To deal with the threat, Ohmae advocated that the Japanese government set up an innovative system that enables elderly citizens to enjoy life and not worry about depleting their savings, which would bring "benefits" to more people in society.
He suggested that the government adjust its inheritance and gift tax systems to allow the elderly to hand over their assets earlier and also set guidelines on how the money should be spent. The Japanese government has recently adopted his suggestion, using tax incentives to get wealthy seniors to invest in educating the younger generation.
A New Devotion: Revitalizing a Historical Site
Taiwan's government has yet to demonstrate such forward-thinking. But in the private sector, the gold-collar class's activism is slowly coming into play.
Next to the Taipei Fine Arts Museum on Zhongshan North Rd., not far from the Grand Hotel, stands an elegant butter-colored English Tudor-style building decorated with wooden moldings. The smell of cypress permeates the building's interior.
The structure is the Taipei Story House, and its executive director, Chen Kok-choo, is the first person in Taiwan allowed to be responsible for the upkeep of a historical site in a personal capacity.
When Chen retired as Taiwan Semiconductor Manufacturing Co.'s senior vice president and general counsel in 2001, the Taipei City government was restoring the old building, and private interests were involved in the renovation through the city's policy to "reuse" historical sites. Chen happily donated NT$30 million to set up a foundation and "adopt" Yuanshan Villa, as Taipei Story House was formerly known.
Today, this small museum with only 281 square meters of floor space has emerged as a model of historical site revitalization, serving as a venue for exhibits, performances, tea ceremonies and other cultural activities.
"During these 10 years, I've positioned myself as a missionary or a middleman," says Chen with a laugh, describing her involvement in Taipei Story House as the only job in which she has ever felt fully satisfied.
In terms of the building's operations, Chen faces an annual financial shortfall of about NT$3 million, but she is not the least bit perturbed by the situation. In fact, she considers herself extremely fortunate to be able to take on the responsibility.
"Even now, I feel that I should be the one to give thanks for having the opportunity to take on this project," she says.
Investing in Educating the Next Generation
Others in this elite group have made education their main cause.
One of Taiwan's most popular public figures, director Wu Nien-jen, was born in 1952 and grew up in a small mining village in Ruifang. The scripts and novels he has written, the plays he has directed, and the commercials he has shot all reflect the life of the common man.
Concerned that Taiwan's 12-year compulsory education initiative will only widen the urban-rural gap, Wu has recently joined with others of a similar age to organize a "Fun Learning Association." The application to set up the group is currently being processed by the Ministry of the Interior. Wu and his partners hope to provide after-school programs to children in areas lacking resources so that the children won't suffer from lack of attention after class.
The group's aspirations are "learning, companionship, giving them greater possibilities," Wu says.
He has always hoped that Taiwanese society would dedicate itself to genuine mutual aid and care, and that people would help others in any way they can.
Wu wonders, for example, if it wouldn't be a good thing for the wealthy to donate their wealth to society. "They should not leave it to their children. That only leads to bickering."
Another entrepreneur from the baby-boomer generation, 52-year-old David Sheu, retired last year as chairman of the company he founded, Spirox Corporation. When the board asked him what he wanted to do, Sheu said he wanted to get involved in the Spirox Education Foundation.
"The white hairs that have been popping out over the past year have increased at a faster rate than in the past when I was working," Sheu says, laughing.
His primary responsibilities at the foundation are concentrated on developing "after-school activities" for children and helping them grow happily, along with cultivating their "ability to catch fish."
Aside from giving people fish (money), giving them a "fishing pole" (life skills and a stage) is in fact the latest philanthropic trend internationally.
"Investing" Trumps "Donating"
"Why is it that everybody thinks donating money is not crazy, but investing money is more crazy?" asked 72-year-old Nobel Peace laureate Muhammad Yunus in an address he gave in Taipei on Aug. 15.
"Charity takes away initiative," Yunus said in an interview with CommonWealth Magazine. "I'm not saying that charity or philanthropy is not good, but there's a more effective way, and that is through business – not conventional businesses that make money, but social businesses that solve problems."
He suggested that retired people who might want to donate money to charitable groups should instead "invest" that money in what he terms "social businesses" – enterprises that "use the money and creative power and contacts all businesses have to solve problems."
The biggest difference between social businesses and regular companies is that from their core philosophy to making money, everything social businesses do is to benefit others and the public interest rather than indulge their own bottom line.
Yunus has invested in over 60 businesses to date, and one of the best known was a venture with his own Grameen Phone to form the nonprofit Grameen Telecom and promote the "Village Phone" program. Launched in 1997, the program distributes mobile phones to operators in remote areas who then rent the phones to others in the same area for both incoming and outgoing calls at cheap rates.
Sharing the stage with Yunus during his appearance in Taipei was Acer Inc. founder Stan Shih. After hearing the Bangladeshi economist discuss his social business model, Shih responded that the National Culture and Arts Foundation, of which he became chairman in early 2011, fits a similar mold.
The concept behind this "cultural social business," Shih said, was to get 14 entrepreneurs to donate money to the foundation and support a "Cultural Social Business Incubation Project" to help young Taiwanese artists find markets and create an artistic and cultural environment that can be developed over the long-term.
"Although I've retired from Acer, I haven't retired from society," Shih said.
Another executive who retired recently, Hsu Chung-jen, has also been pondering the best way to give young people a "fishing pole."
Hsu, who stepped down as president of President Chain Store Corp. two months ago, hopes to hand over all of his other responsibilities in the Uni-President Group within two years.
Though many people wonder how he will adjust to "retirement," Hsu seems quite calm over the prospects and finds himself much more relaxed. Having completely devoted himself for more than 30 years to his job, he now has time to re-cultivate the friendships he sacrificed during that time and share his pent-up good will with society.
He has thought about how to help the younger generation, and his first move will be to teach classes at Feng Chia University in Taichung and National Cheng Chi University in Taipei.
At a time when Taiwan's youth are coming under heavy criticism for a broad range of deficiencies, Hsu said he wants to share with them tips on how to harness their potential and get them to take initiative.
Hsu originally considered setting up a youth association along the lines of Japan's Seinenjuku to encourage the younger generation to contribute to society and the country. But fearing that the group might ultimately become a social club, Hsu held back on his vision to give himself more time to think about how to build an appropriate platform.
The former principal of Neipu Elementary School in Taichung, Chang Chi-chao, has also been contemplating education of a different kind since his retirement.
For the past seven years, he has volunteered at Taichung Women's Prison to teach inmates how to read. Most of his students, ranging in age from their early 20s to 40 or 50, are serving sentences of 20 to 30 years.
"What's most needed in prisons is education," Chang says with emotion, describing the importance of helping those detained regain their confidence and making them realize they have not been abandoned.
What is clear is that as Taiwan's population structure changes, society will grow increasingly dependent on the contributions of the country's older citizens.
According to government estimates, the percentage of the population 65 and over is rising rapidly, while the percentage of working-age individuals and minors is shrinking. By 2060, two of every five people in Taiwan are expected to be senior citizens, resulting in a serious manpower shortage. (See Table)
"The baby-boomers have been the main engine of economic growth, but they will soon retire. If there's a system that allows them to make use of their talents, they will constitute an important form of social capital and become a key driver of social stability," says recent retiree Ko Cheng-en, a former dean of National Taiwan University's College of Management.
Ko is optimistic about Taiwan's future. He believes that as the baby boomers retire over the next 10 years, if they can be productively used and help transform Taiwanese society from its current economic orientation into a more humane, more caring society, Taiwan could emerge as a model for Chinese communities around the world.
Translated from the Chinese by Luke Sabatier