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Demographic Shift - Decreasing working age population


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what I was impressed by was the Brits just accepted the situation and accepted the demographic reality that the pension age needed to be increased. The French had to have these big demonstrations and make this big noise about it, to no effect of course. All it was was just another excuse to take a day off.

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The year is 2011, for 5 years there is a demographic shift in the UK where the UK working age population shrinks.

 

We can lose jobs and increase the employment rate.

 

But will those jobs come back when we need them?

UK Population 'to hit 65m by 2016

 

There's another aspect that hasn't been considered. Many people are familiar with the concept of Peal Oil, but how many have heard of Peak Spending?

 

When will the economy pick up? Are the stimulus packages being considered the right ones? Where should I invest? What strategies should my company follow to get back on track as quickly as possible?

 

Here's the sobering reality we all need to consider as we shape personal, business, and policy decisions this year: demographics support a view of a slower-growing rate of consumption, not just for this year, but for at least the next decade or so in the United States, Europe, and even parts of Eastern Asia.

 

The number of big spenders is decreasing.

 

Historically, consumers in their forties and early fifties spend the most money. This is when most people move up to bigger homes, furnish those homes, and support their growing children's economic needs for goods and services, including education. It's also when most people reach their peak earnings, thus reinforcing the propensity to spend.

 

The unshakable fact, impervious to any stimulus, is that the number of people in this "big spender" age group is declining in many parts of the world.

 

LINK

 

Peak spending age is estimated to be reached at age 48, after that, spending slowly declines.

 

The UK baby boom generation is starting to retire now. Why is this important? Because we live in a consumer based economy.

 

In 2004, the UK baby boomers held 80% of the UK's wealth and bought 80% of all top of the range cars, 80% of cruises and 50% of skincare products.

 

LINK

 

The generations that follow the baby boomers are not only smaller, they are less wealthy (student debt, high housing costs, limited or no wage increases).

 

When your economy is strongly based on people buying imported Chinese tat, that spells trouble.

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They have all been decreasing for a while.

 

Europe has gone below replacement.

 

The UK is still below 2.1 too.

 

Europe isn't this monolithic bloc. UK is going against the trend, women are having more children now than at any time since the 1970s - the overall fertility rate in the UK is now 1.96. Only the USA has a higher birth rate than the UK of the G7 countries.

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