There’s plenty to pick over in the UK Commission for Employment and Skills (UKCES) report The Future of Work: Jobs and Skills in 2030. It contains some thought-provoking (and quite disturbing) scenarios about the world of work in 2030. I will probably write more on this in the coming weeks.
Among other things, the report suggests that, as people work longer, we might have a ‘4G workforce’ with four generations at work in one workplace. If people work into their 70s and 80s it could be possible to have people working alongside their great grandparents.
The report also raises the prospect of ‘reverse migration’, as people from western countries leave for better lives in the growing African and Asian economies.
I’m a bit sceptical about the second point, given that per capita GDP in western countries is still likely to be higher than that of most other parts of the world even by the middle of this century. It may be, though, that rates of immigration will slow down after 2030.
The western countries went through their demographic sweet spot, where dependency ratios were at their lowest, in the postwar period, which is why they experienced high economic growth in the second half of the twentieth century. Countries like India and the Philipines will be going through their demographic sweet spot sometime over the next few years.
But, just as they have done everything else in a shorter timeframe than we did, the emerging economies will age at a faster rate too. By 2030 their demographic dividends will be running out and by 2050, most countries will have a higher proportion of their populations over 60 than Britain has now.
Percentage of population over 60 – 2012 and 2050
Source: United Nations
As per capita income levels around the world start to catch up with those of western economies and more opportunities become available for young people in their home countries a decline in immigration towards the middle of this decade looks plausible. A significant level reverse migration looks unlikely but some people may be enticed away, especially if, as UKCES says, they have family ties in developing countries.
Even without the reverse migration scenario, though, the UK’s supply of eager young migrants is likely to dry up at some point, hence the need to have four generations in the workplace.
Without immigration or an ever-rising birth rate, the only way to maintain the dependency ratio in ageing societies is to redefine what we mean by old age. And, given that the whole world is ageing, the 4G workforce will be coming to all of them sooner or later.
As John Mauldin said earlier this year:
I occasionally get into an intense conversation in which someone decries the costs of the older generation refusing to shuffle off this mortal coil. Typically, this discussion ensues after I have commented that we are all going to live much longer lives than we once expected due to the biotechnological revolution. Their protests sometimes make me smile and suggest that if they are really worried about the situation, they can volunteer to die early. So far I haven’t had any takers.
So if no-one is volunteering to die early, we’ll just have to find ways of dealing with longer lives. Working with great grandparents and great grandchildren might well be one of them.