Well, we don’t know if you have noticed, but things have been changing rapidly around the world and many of the changes have been dictated by demographics.
According to many leading economists the biggest impact on the global economy – good or bad – will be made by changing demographics. Let’s discuss some of the major demographic changes and tell you how they are going to change the world economy.
#1: Millennials are soon going to outnumber Baby Boomers in the United States.
Millennials – young people born from 1981 to 1996 – are going to cross the Baby Boomers in sheer numbers in the United States. Millennials number 71 million right now, they are going to overtake Baby Boomers by 2019. Why does it matter, even if you are not from the U.S.?
Well, to begin with, Millennials are big believers in socialism and most Millennials are ideologically liberal-left. This means you can expect the United States – the biggest free market capitalist nation on the planet – to turn more socialist in the future.
United States of Sweden? Yes, that looks more and more likely the way things are going. Capitalism as we know it, probably won’t be practiced anywhere in the world. Is that a good thing or a bad thing – only time will tell.
#2: The institution of marriage is going to find fewer and fewer takers.
If you have noticed, there are a lot of unmarried adults between the age of 25 to 35. The average age of marriage has gone up sharply around the world. In the United States, the average age of marriage for men is 29 and for women 27. In the 1950s, this was 21 for men and 18 for women.
Only half of U.S. adults are married right now. This is down from 1980s, when over 80% of American adults were married. There is a sharp increase in single-family households and unmarried parents. The marriage rate is 65% for those with college degrees and 50% for those with a high school education or lower.
How does this impact the global economy? Well, for one marriage is becoming unpopular not just in the U.S. but across the world. When the traditional support system of marriage is taken away, then the state will have no choice but to step in.
This means there will be a greater demand for social security schemes or benefits for single-women and children from broken households – which are going to be funded by the tax payer. So you can expect your taxes to go up, and not down in the future.
#3: Legal immigration is going to make the West more competitive.
Immigration to the West has gone up sharply over the last decade and a half. There is a big debate over illegal immigrants and the refugee crisis, but legal immigration has also gone up in a big way.
The number of international students in the United States, for example, has doubled from 2008 to 2016. Many of these students stay back and work in the United States. The number of naturalized immigrants went up from 14.4 million in 2005 to 19.8 million ten years later, with a large number coming from India, China and other Asian countries.
This is a “good” thing for the United States and other Western nations such as the UK, Germany, Australia and the New Zealand. Because of legal immigration, there is no skill shortage in the West. This keeps the technology companies in the U.S., Europe and Australia competitive.
Why? At a time when most young Americans are moving towards liberal arts, legal immigrants are trained in STEM fields. They find work in technology companies such as Google, Apple, Facebook, Microsoft, etc.