Alan Nevin, KeyNotes Editor
I’m a demographic geek. As many of you know from having read my book “The Great Divide” it is demographics that drive the industrialized world, probably more so than politics.
For many decades I have been a subscriber to the Population Reference Bureau, a non-profit that tracks population growth throughout the world.
Its latest report looks at the current numbers on aging and work force participation in the industrialized world.
The main theme of the report is that the growth of the world’s working-age population (ages 15-64) is slowing. In the world’s more developed countries, the working-age population will decline by 5.0% in the next 15 years. In North America, it will increase by only 1.4%. And China’s work force will decline by 4.7%, primarily due to their former one-child policy.
Many developed countries would face major labor shortages if it were not for immigrants. In the U.S., there are 47 million immigrants, 14% of our 320+ million population. Germany has 12 million migrants, the UK, France and Canada 8 million. Canada is particularly interesting because its migrant population is 22% of its total population. Canada has made a major effort to attract migrants with particular emphasis on the Far East.
As an aside, 100 years ago, the immigrant population percentage in the U.S. was the same as today.
In the past quarter century, the youth labor force (ages 15-24) has also seen major declines. In the developed world, the percent of the youth labor force has declined from 59% to 47%. In many developing countries, the youth work force has declined 30-35% in the past quarter century both because of falling birth rates and rising levels of education (kids stay in school longer).
As the youth labor force declines, there is also a counter-trend of NEETs (not in education, training or employed). In countries like Spain and Italy more than 20% of youths fall into that category.
That runs counter to the Pacific Coast where our youth strive to work hard and move up the affluence chain. Those youths are known as HENRY’s (High Earnings, Not Rich Yet).
Due to the shortage of youth labor, folks are working longer in the developed world. In the U.S., 24% of males over 65 are still working and 14% of females. In countries like Japan that have a severe labor shortage, 29% of males over 65 work and 13% of females. Perhaps more astounding is that in the 60-64 year age group, 75% of males work (compared to 61% in the U.S.). In South Korea, which has a labor shortage paralleling Japan’s, almost half of all males over 65 males are working and 23% of females.
Some of the reason why so many of the 60+ folks work is financial, but most often it’s because they are healthy and able to work. And, of course, few are doing the type of labor that was prevalent in the early 1900’s when half the employment was agricultural drudgery compared to 3% today.
And, of course, we now live longer. In 1900, the average life expectancy was 46. Now it’s 77. Although 40% of our senior population is obese (according to government measurement), they are still working.
Now, what does all of this mean to the future economy of the developed world:
First, it probably means that we need a lot of robots because we will not have enough folks to do the dull jobs.
Second, in the developed countries, the youth need to accelerate their education because tomorrow’s jobs are going to require skills in math and coding and even writing.
Third, seniors need to continue their education because they are going to be needed en masse in the skilled work force. WalMart just won’t be needing many greeters and Amazon needs none.
Fourth, females will gradually gain equality with males in the work force. It’s inevitable and very important; and
Fifth, folks in many countries that are now in the third world will learn skills that will allow them to compete in the developed world market and earn incomes that will allow them to live a middle-class life. And that will dramatically expand the market for goods and services – many of which are provided by the developed countries. Everybody wins.
None of these population and work force trends occur overnight, but they are occurring and will have a major effect on our children and grandchildren.
Did you have a computer or cell phone or Netflix or a drone a quarter century ago? Life changes. Stick around. It’s going to get even more exciting.