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Ageing Populations- Boomers, Their Walkers and Fiscal Overload

June 24, 2010

Updated July 21, 2011

David Foot, a respected demographer at the University of Toronto, has said that demographics explains two thirds of everything that occurs in society and the economy. I first heard that comment when professor Foot released his book Boom, Bust and Echo in the late nineties. Since then the demographic time bomb has loomed closer and closer. But how many people are worrying about it?

Canada has a population of 34 million people and a Baby Boom population (those born between 1948 and 1966) of about 10 million. Of the industrialized Western countries, Canada has the largest percentage of its population composed on Boomers. Consequently, the imminent tidal wave of retiring Boomers is one that should wake up corporations and governments.

Of course, there are many other countries that face huge pressures from ageing populations. China, for example, as a result of its one-child-per-family policy faces a freight train of labor market-related problems. On top of that, the country already has an imbalance of some 40 million males in excess of females (accelerated in part to the practice of female infanticide). The social costs of this imbalance are already being felt in violent suicidal attacks on children in schools.

I’ve stated before in my blog posts on global competitiveness that a nation’s number one asset is its human capital (in economist speak), or its people. When a country’s age pyramid becomes inverted, from a base of younger people to one of older people, then a rethinking of how human capital is effectively deployed across an economy becomes a critical strategic issue for governments and corporations. One element of this is how to develop and deploy knowledge transfer strategies for retiring workers, combined with leadership succession strategies.

Intertwined with the imminent the exodus of Boomers from the labor market to retirement land, if Gens X and Y have their way, is the exponential rise in healthcare costs. That Gens X and Y have had enough of we Boomers is completely understandable. We’ve buried you in corny TV sitcoms and the re-re-releases of sixties and seventies rock groups, who now struggle to access the stage in their walkers. But before you give us a final kick in the pants, is this what you really want?

Yes, many Boomers, more in America than in Canada, will have to work beyond their desired retirement dates, the result of greed and incompetence by the financial services industry. If you want an insider’s view, read Michael Lewis’ The Big Short.

But when you look at the steady exponential increase in healthcare costs due in part, but not entirely, to ageing Boomers then any intelligent Gen Xer or Yer will realize that not only do Boomers need to remain in the workforce but they also need to play a viable role in organizations. If you think that we’ll agree to being Walmart greeters, dream on.

We’re ALL in this fiscal situation together, and the only effective way to address the many inter-connected issues is to work together and collaboratively figure out solutions. And when it comes to global competitiveness issues, trust me when I say that the knowledge and wisdom acquired by Boomers over decades of working is an asset you do not want to see vaporize due to retirement and disengagement.

Share your thoughts.

Opportunities are like buses: There’s always another one coming.

– Richard Branson

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7 Comments leave one →
  1. July 22, 2011 6:29 am

    Reading this article again, I see some new points I’d like to comment on. The idea that demographics explains everything that occurs is very interesting….in a way, just knowing that can take a lot of psychological pressure off of many people….success is not always 100% about one’s individual efforts–demographics highly influences opportunities. My father always said he was very thankful to have been born in 1929, at a time when relatively few people had babies. He said this made it much easier to find a good job when he finished college, as there were not many people graduating at the same time, and he had much better opportunities in the labor market.

    What is this about violent suicidal attacks on children in schools? You didn’t provide any details and I would like some.

    Lastly, I’d like to know if you think the inverted pyramids around-the-world caused by aging populations are a one-time occurrence as populations adjust to a smaller birthrate? Wouldn’t you think that within another two generations, most of those older people will have died off, leaving a much more supportable pyramid in the countries that are now experiencing this problem?

    • July 22, 2011 12:47 pm

      Yes, your dad’s right. I don’t think my dad quite realized that, however. The job for life was something that people (read males) in my dad’s generation expected and demanded. And it brought corporate loyalty. My reference (indeed pithy) to attacks on children refers to news incidents in China, most notably.

      The population projections I’ve been reading push out towards 2050. China, South Korea, Japan, Italy, Greece, France, some Canadian provinces, and many more other geo-graphic areas will face plummeting youth populations. The dependency ratios (those over 65 and under 15) in these countries will increase further, causing huge revenue problems for governments, their abilities to provide services (notably healthcare), pensions, etc. Conversely, countries like India, parts of the Middle East and much of Africa will benenfit from what The Economist has called the Demographic Dividend.

      That’s over the next 40 years. Of course, population compositions are always in flux over the long-long-term.

  2. Crystal permalink
    July 21, 2011 6:21 pm

    Thought-provoking article, Jim.

    I, too, am fascinated with the demographics of the workplace–being that I’ll be in it for some time to come. As someone on the cusp of Gen X and Gen Y who’s already been working for quite a while, I’d say that it’s no so much that our generations want the Boomers to exit so we can have some decent jobs, but in the numerous industries I’ve worked in, I’ve not once really seen appropriate succession planning. I’m willing and able to be mentored and to succeed, but the opportunities seem lacking.

    Boomers either don’t want to retire (because their work is so pivotal to their sense of self and identities) or they don’t feel they can retire because they have gotten used to a cushy high standard of living that retirement may not infinitely afford.

    • July 21, 2011 7:32 pm

      Thanks Crystal. I’d say that most Boomers want to retire when they had planned. Some may feel overly attached to their work (as Peter Senge would say, “I am my position,” one of the Seven Learning Disabilities.”) The decimation of retirement plans in North America is forcing Boomers to work longer. And before Gen Y or Gen X starts to argue that Boomers have a cushy standard of living, keep in mind that their offspring have benefitted from this. It’s well documented by economists, demographers, etc. that Boomers not only competed in a competitive labor market but also worked like dogs. Hence why younger people don’t want to replicate their parents. But it’s wrong for Gen Y and Gen X to shit all over Boomers. Sure they made mistakes.

      The generations before Boomers had it made in the labor market. All you needed was a pulse to get a job and a promotion. My late dad and his peers were in that boat.

      Every generation has its unique issues. It will be interesting to see what the children of Gens X and Y have to say of their parents 20-30 years from now.

  3. Mary Mimouna permalink
    June 24, 2010 3:53 pm

    I didn’t realize the U.S. was in good shape with their population pyramid. It seems like everything I read predicts disaster for Social Security, but I forgot about the immigrant part of the equation. Thanks for your additional comments.

  4. June 24, 2010 3:39 pm

    Thanks Mary for your comments.

    Boomers typically had small families. I’m the exception with four (now adult) kids. The irony is that I grew up in a family with just one brother. Most of my friends in the sixties and seventies came from large families.

    The demographic changes underway spell disaster some economies. Japan is perhaps the best example. China has huge looming problems. The Province of Quebec, which had a high birth rate up to the late sixties (due to the influence of the Catholic Church) faces serious problems because of its extremely low birth rate. America is one of the few developed countries that is in good shape when it comes to its population pyramid, the result of immigration and a rapidly expanding Hispanic population.

  5. Mary Mimouna permalink
    June 24, 2010 3:29 pm

    I had a thought while reading this. It’s also the Boomer Generation which is responsible for promoting declining population….if we had continued to have larger families (everyone having kids, and having more than one, instead of many people no longer having kids and others having only one) of two or more, Boomers would not be in the present situation. Of course we did have to slow population growth for the planet, but things you are speaking of here are a direct result of that slowed population growth.

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