Studying demographics has to be a key factor for all for are marketers or members of the investment class. To me, demographics are a steady and relentless tidal wave that are headed right at the western world. Can they be shifted a bit? On paper, it seems possible but it has not gotten much traction in the real world. Countries as widespread as Singapore and France have provided bounties to families who had more children but the programs have not shifted birthrates with any significance.
So, why bother to study the topic? It is an excellent, and some say the best, long term forecasting tool. Consider this—United State population growth has slowed to the lowest level in 80 years. The under 18 population is actually lower than it was in 2010 when our last formal U.S. census was taken. Many pundits saw the birthrate decline beginning in 2007 and shrugged saying that it was due to the Great Recession of 2007-2009. Well, the birthrate has not snapped back. The U.S. fertility rate is now the lowest in history. And, a survey on family growth recently found that more than half of U.S. Women with one child said that they would not be having another.
You have all heard of Zero Population Growth (ZPG). Women are now having their first child at 27. When I was in college, it was 21. America is now below ZPG (2.1 children) so we cannot replace our existing population. We have now joined most of Western Europe as a rapidly aging society. Census adjusted figures indicate that US residents under 18 have fallen about 1% since 2010 but those over 55 have moved up 8 percent. The New England states and parts of the industrial midwest are getting older the fastest.
Another factoid has come to the fore which surprised me. The mobility of Americans are at a historic low. I understand it now during the Covid 19 pandemic but even before this crisis, people were not moving for jobs as much. Perhaps the high cost of living is keeping people out of San Francisco, Seattle, Boston and New York even though that is where the super high paying jobs are.
What does all of this mean? The math is scary. Our health care system is buckling at present due to the pandemic but what about 30 years from now? How can we keep the current Social Security system going (fewer people paying in and more taking out) not to mention Medicare/Medicaid and some provisions for senior housing? Estimates say that the shortfall for these items is as low as $70 trillion up to $210 trillion. Can these relatively few young bail out us greybeards? The math does not work. We will need reform in entitlements and higher taxes. And, we cannot grow our way out of demographic shifts.
One answer is heightened immigration but that tends to be a tinderbox political issue with many Americans who sadly do not realize that we are a nation of immigrants and young hard working immigrants could really help bail us out of this mess.
Villages in the Great Plains are becoming ghost towns and the trend is showing no signs of slowing down. What happens to small isolated towns when the few youngsters move away and schools close and the nearest doctor is 40 miles away? These are issues that are upon us.
So, the future demographics of the US and Western Europe are nearly set in stone. People who dismiss it as a political hot button miss the point. It will affect the media world, the marketing world, healthcare and stunt economic growth if it considers on its current path.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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