Excellent article in this past month’s THE ATLANTIC magazine on the long-term implications of America’s shifting demographics. I’d say it’s a must-read for REALTORS®, who are already seeing first-hand the profound changes shaping the make-up of our communities. Here’s a clip (the link to the entire piece is at the end of this post):
Start with the stuff America makes, and the people who make it. Young people buy goods, like cars, houses, and iPods. Old people need services, like transportation, meal preparation, and health care. We have made great strides in enabling the elderly to get around—the scooters you see advertised on daytime television, for example. My grandmother, who is blind and physically frail, was able to live at home much longer than she otherwise could have because she had Meals on Wheels, a home health aide, and a Life Alert-type necklace to call for help in case she fell.
But these services require a lot of labor. According to an analysis by McKinsey Global Institute, the number of hours required to produce an automobile in North America fell by 1.7 percent annually from 1987 to 2002, to an average of about 100 hours. Meanwhile, it still takes about the same amount of time as it always did to drive a senior to a doctor’s appointment, or to help an older patient bathe and dress. Productivity growth is faster in the things that kids consume than in the things that the elderly need.
As the Boomers age, they will consume fewer of the things that we produce efficiently, and more of the things that we provide relatively inefficiently. Productivity is notoriously difficult to project, but many forces will be pushing it downward as the Baby Boomers age.
Since services are labor-intensive, and the number of service-consuming seniors will grow rapidly, we’ll need a lot more workers (that’s bad news for those who favor restrictive immigration policies, particularly the kind that keep low-skilled workers out). And, of course, the mix of service workers that we’ll need will be different from what it is today. In effect, the next 20 years will require a massive transfer of resources and people away from the care of children, who will decline in relative number, and toward the care of old people.
This rebalancing should have already started, but it hasn’t. Consider that approximately 29,000 pediatricians now work in the United States, caring for roughly 75 million children. To care for roughly half that number of patients over 65, the American Geriatrics Society reports, the country has only 7,128 board-certified geriatricians. Just 468 first-year fellowships in geriatric medicine were available in the 2006–2007 academic year; nonetheless, almost half of them went unfilled.
The story goes on to discuss the implications of demographic change on everything from Social Security and the stock market to the current debate over immigration policy (and how we’ll need MORE low-wage workers to care for our aging population, not fewer).