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Among Bill Gates’ classic observations, the following statement may be the most prophetic. “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” In today’s world, there are many worries concerning the markets, the economy and of course, immigration, especially as it relates to recent terror attacks. This article doesn’t address the emotional and political issues surrounding market headlines, but discusses a longer term challenge—an aging population and workforce.
As the Wall Street Journal noted, “for the first time since 1950, the world’s combined working-age population will decline. At the same time, the share of the world’s population over 65 will skyrocket. Previous generations fretted about the earth having too many people. Today’s problem is too few.” This demographic phenomenon is not limited to the U.S. In Japan today, more than two out of five people are over the age of 65. Similarly, in Germany and Italy more than 20% of the population is older than 65. The peak of the baby boom here in the U.S. occurred between 1957-1961, meaning today’s most congested population segment is now 53-58 years old. That is precisely the age when many people are planning to exit the workforce.
Looking at long-term challenges—perhaps not in the next two years but clearly in the next 10 years—our economy’s challenge is maintaining and building a growing workforce. The current landscape is also continuing to move toward a service-based economy. Manufacturing may or may not be able to use technology to navigate a lack of new workers and an aging workforce but the service industry isn’t so lucky. Machines can’t make great food, paint houses, provide medical care for loved ones or cut hair. Nor can many service jobs be outsourced – they require human hands.
Immigration is a complex political conversation, but it’s clear that our workforce is depleting and our economy functions on the energy and efforts of people. Even if today’s birthrate was expanding, children let alone babies are not capable of replacing the knowledge and experience of the countless Baby Boomers moving toward retirement.
How we address the current fears of terrorism and concerns about other nations’ citizens taking jobs from U.S. workers is not easy, but the facts remain the same. The number of workers —especially skilled workers like welders, plumbers and carpenters—is decreasing and none of us want the economy to shrink. The world’s economic leaders, both foreign and domestic, are cognizant of contracting workforce’s and the fight for new workers will be at the forefront over the next 10 years.
Mr. Gates is right in his assessment. We have to be diligent in keeping our borders safe today. Looking at the long term, if we lose our economic advantages, our borders will be weaker than they are now. We have challenges my friends. It’s easy to focus on the fear of today but let’s not forget our future.
Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column offset=”vc_hidden-lg vc_hidden-md vc_hidden-sm”][vc_widget_sidebar sidebar_id=”sidebar-main”][/vc_column][/vc_row]