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Monday, August 1, 2016

Western World Demographic Outlook

Several years ago, I was about to put up a post entitled “Demographics are Destiny.” When I could not get most of my panel members to weigh in, I knew that the title must have been deadly. So, I renamed it “Jennifer Aniston is 40!” (Media Realism, April 23, 2009) and soon my e-mail box was loaded with comments and there were many hits on the actual post from across the world.

Well, a lot has happened in the last six years but, as you might expect, politicians around the world have “kicked the can down the road” instead of addressing a demographic iceberg that will hurt all and clobber many western democracies in the next two decades.

In terms of demographics, things have gone from rotten to worse over the last few years. There is not a single country in the European Economic Union (EEU) which boasts a fertility rate that guarantees an increase in population over the next three decades. In some countries, the population will decline drastically such as Italy and Spain. Others have serious issues for unknown or unresolved issues. Take Russia, for example. The World Health Organization (WHO) posits that the average Russian male has a life expectancy of under 60! They attribute this to big increases in heart disease, strokes, smoking and alcoholism. This gives them a life expectancy lower than males in Nigeria, Tanzania and Pakistan.

Japan is setting records for a peacetime decline in population. By 2050, 40% of the population will be over 65. Supporting the elderly will bankrupt them.

So, how will these countries survive or maintain an infrastructure? There is only one way--big increases in immigration.

In the United States, Treasury department estimates project that we will need 10 million immigrants per year to maintain our ratio of workers to retired citizens. Read this carefully. They are not calling for 10 million new immigrants. What they are saying that to keep the CURRENT RATIO intact, we will need that many new people. So, if we do not reform Social Security with some mix of higher S.S.taxes, older age for eligibility,  and net worth means tests, the system along with Medicare will collapse without a huge injection of immigrants to prop up the entitlements. And, many of us old folks will keep working longer as well.

Many rural places in America and throughout the western world are suffering acute labor shortages. Immigrants can help turn these areas around or provide vital services. Someone told me that young Brits, Germans, or Frenchmen would not wish to work in a small town Finnish old age home. I agree--wiping oatmeal off the faces of octogenarians does not have much appeal to them nor would it to most American youth.   Yet, if you were from Syria or a frontier market in Africa or Asia you would welcome the chance to live and work in a western nation with healthcare, free education, and a social safety net. People forget that unskilled immigrants often do the jobs that people in wealthier nations do not wish to do. I vividly remember being in Zurich, Switzerland in late 1973. Hundreds of then Yugoslavs hung out in the train station on Sunday afternoons. They had nine month or two year work permits. It had to be lonely but it was a step up from their life at home. British writer Randy Charles Epping put it well when he wrote, “a job, even a relatively low-paying one by Western standards, is the best hope for a worker to start building a better life.”

So, the impact on marketing will be profound. The old people have much of the money (sorry, kids). Many will live very long lives and will need caregivers who may well be immigrants. Marketers still have not adjusted to this emerging reality as many messages are still aimed a the under 35 group who are often struggling economically across the western world.

Politicians in Europe, and Japan need to do something and quickly. In the U.S., we need to act but not as drastically. Will any have the political will to take the necessary measures to right the demographic shifts? History tends to damper my normal optimism about the future in this regard.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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