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Esther Galiana, School of Economics and Business Administration, University of Navarra, Spain.

Pensioner: "Gold" consumer

Fri, 21 Jan 2011 10:54:13 +0000 Published in Expansion

These days there is a lot of discussion about the reform of the pension system, the unsustainability of the current outline , the delay of the retirement age, etc.

There is real concern about our pension system and its long-term financing deadline and structural reforms are necessary. An X-ray of the current Spanish population gives the following picture: population estimated at 46 million people; of these, 18.5 million are employed, i.e. 40%; the unemployed represent 10%, 4.6 million people, while pensioners account for almost 8 million, 17% of the total population.

Therefore, the weight of pensioners, with the expense of current and future transfers that this implies, is worrying for many reasons. Without denying this reality, it should be recognized that people who receive a pension make their own particular contribution to sustaining the Spanish Economics , especially since the onset of the crisis. Let me explain.

The consumption patron saint of a retired person is characterized by a contraction of expense, parallel to the decrease in income compared to his or her previous professional occupation. However, seniors are a growing and attractive segment of the population for companies. In marketing jargon, these consumers are called by a variety of sounding names: "Grey", "Golden", "Senior", "Gold", .... Most of them enjoy a public pension that may be supplemented by income from other sources. In other words, a recurrent and - if the system does not fail - reliable income. Companies have developed ad hoc products for the elderly population, the target of new leisure and health proposals... We are, at final, facing a new consumer, more conservative, but a consumer nonetheless. And this "Gold" consumer is here to stay.

Another noteworthy aspect is the growth in consumption of the "Gold" segment compared to the fall in total consumption and other segments. According to the latest survey de Presupuestos Familiares, the average expense per Spanish household decreased progressively from 32,000 € in 2007 to 30,410 € in 2009. However, the average expense of households where the main breadwinner is retired or retired rose from €24,991 to €25,920 in the same period. In other words, employed and unemployed households decreased consumption significantly while retired households increased consumption over the same period.

Therefore, this segment of the population has helped sustain demand for products and services in a time of drought for businesses. As one recent retiree said: "I don't plan to change my consumption habits, so I will help the Spanish Economics in my own way". And, of course, to the Economics of the neighborhood, where the snack, the press, the hairdresser, the shopping...

There are other economic and social contributions in the short term deadline that are worth highlighting. issue There is a growing number of households where the main breadwinner is over 65 years of age, with children and even grandchildren at position. The reasons are diverse: the difficulty to start working life, the tendency to lengthen the programs of study... And in this period of crisis, the "return to the parental home" phenomenon occurs: unemployment forces the children to return with their family to the grandparents' home. The importance of the family network in Spain allows this subject of resources.

Therefore, transfers to the elderly, sometimes seen only in their aspect of expense, also have a dynamizing component of the Economics. They are rapidly converted into consumption of goods and services, for themselves and, at this time especially, for their families. In addition, they are used for their own health care, which relieves family members and the State of this burden. They contribute to support the increases that we are suffering to relieve the Treasury coffers: electricity, VAT, local taxes...

That is why it is worthwhile to recognize and study the contribution of this population group to the Economics and the creation of wealth, and to ensure their decent purchasing power. And this, regardless of the fact that the pertinent reforms must be made in subject of pensions, which are many, and which must necessarily include a greater promotion of private pension provision. We will see how this process ends, what the final product is, and we wish the new "mediator", the former Minister Jesús Caldera, the best of luck these days.