Last week we talked about six demographic trends impacting the U.S.
- The South rises again
- The browning of America
- Marrying out is in
- The Silver Tsunami is about to hit
- The end of men (?)
- Cooling water from grandma’s well
So what are we to do to react to or even better turn these trends into advantages for the accounting profession? Here are a few thoughts from Dr. Johnson with my own thoughts as well.
- Embrace immigrants and immigration – immigrants are much more likely to be young, and young people who do not strain our social services are exactly what we need to sustain Social Security, Medicare and even all of the local programs because the Silver Tsunami is going to hit. The problem with immigration is that it quickly comes to a debate on illegal immigration. The demographic facts are that if we are to thrive as a country we need to greatly expand legal immigration and in so doing we will probably solve a lot of the illegal immigration problem.
- Recognize that consumer markets and new businesses are going to be far more diverse – not only are immigrants usually young, but they are also much more entrepreneurial than the average non-immigrant. After all, they are risk takers simply by being immigrants. These entrepreneurs are the life blood of many businesses including growing CPA practices, so we are going to have to be able to relate to them if we are to be successful.
- Prepare for change in low-growth regions – While the South will continue with “growth as usual,” that won’t necessarily apply to the rest of the country. Our colleagues outside of the South will need to prepare for a significantly more difficult path to growth and all the problems that entails for a business scorecard where what you are going to do next year counts more than what you have done lately.
- Look for talent where no one else is looking – talented minority candidates at elite schools are in such high demand that they can work almost anywhere they want. If you want to make your workforce more diverse, then you need to look at schools without the big names. They are local schools you may have ignored for years, but you can’t afford to ignore any source of talent in the competitive future.
- Listen to the Millennials – Younger workers have made different lifestyle and workstyle choices from the older generations. Many people point out we were saying the same things about the baby boomers in the ’60’s and ’70’s, but unlike the baby boomers today’s generation knows their talent is in demand and they aren’t afraid to take it somewhere else to work; maybe even your competitor. You better figure out a way to make them a part of your business’ future or your business won’t have a future.
I know many of you will not agree with everything I have said and that is what is great about this country. We are allowed to disagree and do our own thing (as long as it isn’t illegal). If you don’t agree with my answers, that’s fine, but what are your answers, because ignoring the issues won’t make them go away.
We’ve all heard the old adage you can’t fight city hall. That may or may not be true, but adapting that adage to say you can’t fight demographics is certainly true. There was a speaker, Dr. James Johnson form the University of North Carolina, at the recent AICPA Fall Council meeting that talked about six disruptive demographic trends. Those trends are:
- The South rises again – the South has been outpacing the rest of the U.S. for decades in population growth and there are no indications this will change in the foreseeable future. But even in the South the growth has not been even. Instead it has been concentrated in four states – Texas, Florida, Georgia and North Carolina.
- The browning of America – Virtually all (92%) of the population growth in the last decade was non-white. In addition, the non-Hispanic white fertility rate has been 1.9, below the replacement rate of 2.1, for the last two decades.
And it doesn’t take a rocket scientist to see that these first two trends are linked. Those of us in the South can look around the new neighborhoods being built to hold all of the new people and our growing schools and see that the population is booming and it doesn’t look like the traditional cities of middle America.
- Marrying out is in – The percentage of people married to someone of a different race rose from 3% in 1980 to 8% in 2010.
I look at my kids and they are truly colorblind. I don’t think we have ended racism in this country, but I think we are far better than most of the world on the subject and the millennials are quickly eliminating the remaining vestiges of racism in our country. .
- The Silver Tsunami is about to hit – Let’s not forget about those baby boomers. They are hitting age 65 at the tune of 8,000 – 10,000 a day, and will do so for the next two decades. The baby boomers will continue to impact the economy in new and different ways as they age.
- The end of men (?) – the inflation adjusted median wage (not average, but mid-point) has dropped by $13,000 in the last 40 years (per one estimate), and men have made up less than half of the college graduates over the last 20 years.
- Cooling water from grandma’s well – we are seeing a significant rise in the percentage of households where grandparents are raising grandchildren.
All of these trends will significantly impact the economy and workforce in the coming decades. Next week we will talk about what the accounting profession can do to embrace these changes and make them work for the profession rather than against it.