Tag: demographics

Trends – maybe

“I don’t set trends. I just find out what they are and exploit them.” ~ Dick Clark

In previous posts, I’ve highlighted trends that will likely impact our communities. Dick Clark’s quote is particularly relevant to communities. A community needs to be ready for the trends that are impacting them, or may impact them. If the trend is negative, a community should take action either to minimize the impacts or to be able to rapidly recover. If the trend is positive, the community should be ready to exploit and accentuate it, if possible.

The fly in this ointment is that we sometimes think we see a trend when there may not be one at all. We humans are pattern-seeking animals. We owe our survival as a species to our ability to recognize slight changes in familiar scenes; our ability to recognize strange whispers intruding on the rhythms of our lives.

In this post, I’m going to look at two different potential trends. One of them already seems to be impacting our communities. The second may be real or not. Only time will tell.

Peak Population

According to the United Nations, the rate of growth of the global population peaked at 2.3% in 1963. Since then it has decreased to today’s 0.84%. The UN projects that the global population will peak before the end of the century (~2080) with a very high probability. Recent model developments are indicating that the UN model is very conservative; peak population may well occur decades sooner. The Eurozone, China, Japan and Russia have all already peaked. The African population is set to continue to expand throughout the rest of this century, but not enough to overcome the declining populations elsewhere.

Peak population appears to be driven by two entangled factors. Compared to 1990, women globally are having one less child. In countries with declining populations, the birth rate is simply too small – below the 2.1 births per woman – to maintain the population. In large part this seems to be a consequence of greater prosperity. In richer countries families don’t need childrens’ work to sustain themselves. In richer countries women are more likely to be working. Life expectancies are greater in richer countries.

In fact, life expectancy is increasing globally – the UN predicts that about 1/4 of the world’s population will be 65 or older in 2080. By 2070, people’s longer life spans will result in over hslf of the world’s deaths occurring after the departed has reached age 80 (compared to only 17% in 1990). In the US by 2035, the number of people 65 or older will exceed those 18 and younger.

As the UN points out, the only reason the US has not peaked (and probably won’t) is immigration. Without immigration, the UN projects that the US population would slowly decrease from today’s 340+M to 245M by the end of this century.

An important global consequence of this trend is what it implies about climate change. All of the scenarios built into our climate models assume that global popuation will not peak (at around 10.5 B people) until early in the 22d Century. Fewer people mean fewer emissions. Thus, adjusting these models to account for fewer people may drastically alter the expected climate impacts.

In the US, the consequences of this trend will vary greatly depending on the community. Communities that rely on exports to Eurpoe for their economic vitality may find that their markets are shrinking due to the decreasing population. Competition for these markets is already intensifying. However, the growth that will occur in the developing world, particularly Africa, in the next decades means that there may be new markets to exploit.

Communities that do not have a significant immmigrant population may stop growing or even contract. Longer life spans are already increasing the demand for elder services (pet care is an interesting example); these communities may not have enough people with appropriate skills to satisfy that demand. These communities may also start to hemorrhage higher paying jobs. Companies requiring a technologically adept workforce may leave because of a lack of skilled workers.

In fact, the Peak Population implies that human capital will be at a premium. We are already seeing this in a decline in the ratio of those employed to job openings – now less than 1. A part of this is the Baby Boomer generation leaving the workforce. This increased demand for workers implies that wage-induced inflation is likely to persist.

However, this does not necessarily mean that our economy will decline. Gross Domestic Product is the working population multiplied by their productivity. If AI is able to increase productivity enough, our economy may even thrive.

As we’re already seeing in our stores, immigrants bring with them a demand for products we have seldom encountered before – food, fashion, and entertainment. They also potentially bring with them severe demands for community services – schools, medical facilities, transportation and welfare. While our new President may be able to stem the flow of immigrants, he won’t be able to stop it.

Peak Population will likely have a significant impact on Higher Education. The declining number of students will place great pressure on colleges and universities to survive. This will place a premium on their reputations and “branding.” Institutions of Higher Education likely will begin to react more forcefully to acts of student hooliganism.

Other possible consequences:

  • Greater demand for workers may well mean greater career volatility as workers go after a wider universe of opportunity.
  • As the well-to-do elderly die or dowsize, there is likely to be a glut of McMansions in some communities. This should drive prices down so that middle class families can afford them, but this will have impacts on the tax base of local governments and schools.
  • Immigration into the US, is already impacting the country culturally and socially. Peak Population is likely to accentuate these impacts, both positive or negative.

The 2024 election and political realignment

We’ve had entirely too much theorizing over what our election meant or didn’t mean. Four things stick out to me:

  • Trump got slightly more votes than in 2020, meaning he got about the same proportion of the electorate in 2024 as in 2020 .
  • Much of the theorizing (scapegoating?) revolves around percentages, not the absolute number of votes. Since the total number of votes cast in 2024 was well below that of 2020, Trump’s percentage of the total vote was bound to be higher.
  • Trump’s coalition (his mix of the voters) changed. He picked up more votes from blacks, hispanics, and blue collar workers than before. Conversely, his proportion of white votes went down slightly, continuing a larger trend.
  • Harris got 10 M less votes than Biden. She ran an abysmal campaign, and was a worse campaigner. A lot of Dems just stayed home on election day. The telling stat – to me – is that Harris was unable to get out as much of the urban Dem vote as Biden did. She reached only 80% of Biden’s total in Chicago (Cook County) and Philadelphia, and 75% in New York (Bronx, Brooklyn, Manhattan, Queens).

All of this suggests that the demise of the Dem Party has been greatly exaggerated. Ultimately you have to give people “a reason to believe.” The Veep never did. Had Biden withdrawn sooner so that the Dems could have had a more “primary-hardened” candidate, they might have won.

Is there a trend toward political realignment of our country? A certain – “maybe.” Definitive conclusions about party realignment will have to wait for more detailed analysis of the absolute vote totals. I suspect that it will be a definite “Yes” in only a few states. Ideally this election might mark the beginning of the end of “identity” as an important factor in our elections. We can only hope.

The Roaring Twenties (and beyond)

It’s tough to make predictions, especially about the future.— Yogi Berra

This is the time of the year when all of the crackpots with crystal balls (most of them cloudy or cracked as well) try to predict the future. I’m going to join that crowded club (some might say I’m a charter member!) but I’m going to focus on communities.

Right away, you know that any predictions are going to be fuzzy – our communities are too diverse in size, in culture and in structure for any prediction to be universally true. Thus, I will highlight relevant trends for the coming decade (and beyond) and in a later post I’ll try to project how these trends will impact communities and their resilience.

Let me set the stage by taking a quick look back at the decade just past (the Twittering Teens?). Globally, it likely was the best decade ever. For the first time less than 10% of the world’s population was mired in extreme poverty. Global income and wealth inequality – especially in Africa – was reduced. Infant and child mortality fell to record lows. Famine became all but extinct. Malaria, polio and heart disease are all in decline globally. Globally, life expectancy continues to rise (except for middle and lower class white men in the US). The world also is on a more sustainable path – in much of the first world the use of resources to make “stuff” declined; not only on a per capita basis but on an absolute basis. Look at how little raw bauxite goes into aluminum cans now compared to 50 years ago, for example. We need much less land for food production – one-third to produce the same amount of food than was needed 50 years ago. Not to mention dolphins back in the Potomac for the first time since the 1880’s!

However, in the developed world there has been a growing sense of unease. The cultural clash between populism and statism – between Big Everything and the Little Guy – has become downright vicious. Brexit and Boris; Bernie and the Donald; the Elite and the Deplorables are manifestations of societies in which Big Everything (government, business, unions…) is all about the numbers and seemingly has lost the ability to care about – or even listen to – individual people. As a result, we see more and more anti-social behavior: little things like people making U-turns in the middle of a four lane road; bigger things like preventing speakers we don’t like from speaking. This has led to near-gridlock on the national level, which is trickling down to many communities.

This cultural clash has been compounded by social media that have devolved into echo chambers. From where we live to where our kids go to school to who we interact with on Facebook and Twitter to what we watch on TV, too many of us are only hearing what we already believe from those like ourselves. Too few of us are willing to listen to thoughtful people who see things from a different perspective. As a result, we seem to be stumbling around the problems that surround us because our ideological red- or blue-tinted glasses keep us from seeing those problems and their possible solutions in proper perspective.

Perhaps one of the most important trends for communities center around population. Toward the end of this decade, and especially in the next, the Baby Boomers will start to exit the stage. They’ll take with them their pension liabilities and their health issues. If communities can survive the pension woes coming this decade, they’ll likely have more to spend in the 2030’s.

However, many communities will have a hard time doing that. The exodus from the high tax states (e.g., CA, NY, IL and NJ – the ones with likely the most unkept promises to retirees) will continue. Florida, Texas and the other southern states, and some of those in the western US, will experience growing pains as they try to accommodate the newcomers (Austin’s problem with homelessness – and the city’s non-solutions – sounds like something from California.). Immigration will add to these stresses.

College towns are likely to feel an even bigger pinch. The much smaller generations born after 1965 will lead to closures of many institutions of higher education (one study predicts one in six), or mergers (one study predicts one in five). If the push for free public education reaches fruition, private IHEs – relying as they do on tuition – will put in a vise. In turn, this will reduce the financial, human and social capital of their home towns.

Economically, the US will – at best – muddle through; the economies of much of the rest of the developed world are essentially stalled. Even China’s amazing growth seems to be slowing. There likely will be another recession within the next five years in the US (maybe sooner; Europe is probably already there), with the potential to rival the Great Recession in impact. However, the Federal Reserve and other central banks (with their near-zero to negative interest rates) and national governments (with their mountains of debt) will have even more difficulty responding to this one; recovery will be even slower. And it appears that the policies of the Federal Reserve and other central banks will continue to punish savers and inadvertently promote wealth inequality. The coming recession will reduce the apparent wealth at the top end, tbough. I intend to examine the “wealth gap” in a later post – closing it in a wise manner could have a huge impact on our communities.

A recession will likely accelerate two other trends: business consolidation and the growth of e-commerce. The growth of government regulations and the pressure of global competition has led to a situation in which every major industry is dominated by only a few companies. Credit Suisse estimates that by 2025 over one-fourth of all the malls in the US will be closed. E-commerce will make up to at least half of the retail economy by the end of the decade. Recession, business consolidation and e-commerce together spell big trouble for small businesses. After the Great Recession, job growth was dominated by intermediate and large companies for the first time; generally smaller businesses have been the driver of recovery. And small businesses are the lifeblood of the downtowns of many small and intermediate size communities. They’re the ones who sponsor youth sports teams; notices about community events are posted in their windows; they are often the anchors for the community’s sense of place.

Small businesses are also the entry point for most young people into the workforce. Spain, Greece and our own experience in the Great Recession point to disproportionate youth unemployment (This is also an unintended consequence of raising the minimum wage). Some of these youth will become isolated from their communities; with the potential for increased crime and drug use.

In fact, youth unemployment, in fact all employment will continue its inexorable change. As my friend Andy Felts is fond of tweaking me about, AI (and, more broadly, automation) will continue to erode the need for low-skilled workers. Past revolutions/evolutions in the nature of work have generally led to the need for roughly the same workforce in terms of numbers, but very different skill sets. Less farmland needed for food production and consolidation have led to fewer farms and farmers. We frankly don’t know what the advent of self-driving trucks and cars may mean for employment of cab and truck drivers, for example.

And perhaps the least recognized trend – the compression of time: the accelerating pace of change. Our communities are being assailed by demographic and social change, changes to their economic and environmental landscapes, and most of all changing expectations by their members. These are coming at communities faster and faster. As pattern seekers, our community leaders generally expect to have as much time to respond to these changes as they had “the last time,” but that expectation is no longer valid. To adapt to these changes requires both time and a willingness to take action. This places a premium on a community’s ability to foresee change and think strategically. I’ve written about this before, but I’ll explore this further in a later post.