Introduction

WHEREVER PEOPLE ARE, they are always making a demographic impact. Whether a population is large or small, people always leave their mark. I believe that the science and art of demographics is grossly underrated and unappreciated. It is a simple science, really, that deals with live births, fertility, immigration, migration, aging, and death. This book was written to demonstrate the enormous power of counting people, promote the understanding of population change through time, and show how distinct population groups and shifts in population size significantly impact the world around them.

While the impacts of shifting and changing demography are global, the eye of the perfect demographic storm is in the continent of North America in general and in the United States in particular.

Immigrants will continue to pour into the country and enhance and complement the U.S. population at a rate of about 1 million per year. Our fertility remains above replacement level, and we are having enough children—about 4 million per year—to sustain the country for future generations. The members of the largest generation in U.S. history, Generation Y, are moving out of their parents’ homes, entering the workforce, setting up households, marrying, and having children. One-third of the U.S. population of 320 million or so—composed of about 40 million African Americans, 55 million Hispanics, and 17 million Asians—will benefit socioeconomically from a new and honest diversity. The largest generation ever to retire in the United States will do just that, as Baby Boomers will retire at the rate of about 4 million per year. This will create new markets, cause a drop in unemployment, and dramatically boost the economy of the Southern and Western “Sun Belt” states. It is all good!

There is more. While the demographic climate of the United States looks especially good, the demographic-based outlook for much of the rest of the world is bleak. The labor forces of the European Union, Eastern Europe, and all of Asia will be decimated by poor fertility. A country that does not have babies cannot expect to maintain its numbers of adult workers, consumers, and taxpayers over the course of twenty to thirty years. The net result will be a steady flow of manufacturing back to the United States to take advantage of the best labor force in U.S. history.

This book is about finding the potential “upside” opportunities borne by changing demographics. While in many cases demographic change tends to be gradual, sometimes change comes on much more quickly. In both cases, though, recognizing the potential upside can be difficult.

Generally speaking, potential upside opportunities are more prevalent with growing population shifts than they are with declining populations shifts. And, as with the above-referenced population change in general, it is also difficult to foresee the potential downside caused by population declines.

I sometimes refer to growing population shifts that represent potential upside as “tsunamis” and often refer to declining population shifts that represent potential downside as “sinkholes.” The former represents a counterintuitive metaphor because I am seeking positive results from it. Nevertheless, “tsunami” perfectly describes the power of large growing shifts in population: These shifts are immensely powerful, hard to see, and incredibly challenging because the power is not really recognized until, like a tsunami, the shift actually hits. Just think of America’s Baby Boomers, who, as you will read in the pages ahead, have collectively acted like a tsunami as they’ve aged through all the key epochs of life. And now, as they enter the retirement years, as by far the largest such cohort to ever retire, they will sweep over all things related to retirement like a tsunami—an “upside tsunami.”

Interestingly, people knew that this Boomer retirement tsunami was coming, but for the most part America heard a warning siren that sounded way too early and has been looking out to sea ever since in a vain effort to mark its approach prior to making preparations. Well, the tsunami is hitting the shoreline, but we’re still not ready for it.

While perhaps more apt as a metaphor for the purposes of this book, referring to demographic changes related to population decline as “sinkholes” makes perfect sense as they are also immensely powerful but difficult to perceive until the ground actually collapses. America’s Generation X has caused some sinkholes as it has aged through time, one of which caught me back in the late 1980s with the collapse of the U.S. market for Japanese motorcycles.¹

So, for the purposes of this book, when you read about a demographic tsunami it will almost always represent a potential upside, and when you read about a demographic sinkhole I am more likely than not warning you about potential downside. But remember, forewarned is forearmed, and upside opportunity can sometimes be discovered on the cusp of potential downside. Or, to put it another way, tsunamis and sinkholes both create immense challenges, but while tsunamis definitely provide more potential upside opportunity, sinkholes can provide upside opportunities as well. Read on to learn about this fascinating science—some would say “art”—called demography, understand its incredible power, and learn how to discover potential upside in demographic tsunamis and sinkholes before they strike, or bury you.