I realise that today’s post is actually meant to be an Investor Diaries one. Unfortunately, in what must be the most ridiculous #FirstWorldProblem ever, I left my Macbook at home this morning (I was watching Criminal Minds just before bed last night, so it’s probably still lying on my bed, hiding under a pillow, in case of thieves). So I’m working off another laptop today; and sadly, it doesn’t have the spreadsheets. So that’ll be tomorrow’s post.
In the interim, I’m going back to a piece that I started writing in December last year, and then decided that it was too much effort for a Christmas-time post. And part of the reason for the return is this week’s issue of the Economist, which has “A Billion Shades of Grey” as its headline.
Over the next few decades, the first world faces a particularly pressing problem. And I’m not talking about Climate Change (although, to be honest, that’s probably a bigger deal).
The problem is changing population demographics.
The trend in population demographics is toward the elderly. We’re living longer, and reproducing less, and that means that the issues of the elderly are featuring ever more powerfully in public and economic policy.
- Healthcare – age comes with medication, operations, and palliative care.
- Lengthening Work Lives – Warren Buffett is 83 and still running Berkshire-Hathaway. As healthcare improves (and as necessity demands it – expecting a pension to last 20 years on average is quite an ask), so the elderly will work past the traditional age of retirement. This means that the up-and-coming will be doing their upping and coming at a glacial pace. In fact, the only real labour turnover will take place in the more physical professions, where the aged can’t compete with the young and boisterous. And because the more skilled jobs will be taken up by the elderly, it means that they’ll earn the higher wages. On the upside, it means that they’ll be paying the taxes that will be funding their healthcare…
- Pensions – where the State offers pensions, these might just break the governmental back. Although, that said, it could be offset by lengthening work lives…
- Inequality – the elderly are going to be working longer, earning more, and (traditionally) spending less. Of course – that could flip (maybe the new waves of the elderly will take a devil-care-less approach to semi-retirement: blowing their money on yachts and extravagance à la Hugh Hefner, dancing their way into the grave). But if I’m honest, my vote is with spending less. It takes a lot of energy to party hard; and even as a near 30 year old, I’m already annoyed by small children in malls and the youth of today and the general inconvenience of visiting laudromats while travelling. Translation: I’d probably spend more time at home in an attempt to avoid being generally irritated. What that means is that the wealth will continue to accumulate Thomas Piketty-style.
There is general concern that all this will add up to slowing economic growth.
On the upside, the climate could get us all long before we hit that wall.
In the meantime, here’s an infographic: