In the next 15 years more people will exit the Australian workforce than enter it - a trend reversal contrary to the experience of the last 60 years.
This contraction of the workforce will mean less tax-paying workers and potentially less consumer demand. The last 60 years have, hiccups aside, delivered economic prosperity to a growing Australia, and growing countries around the globe.
Governments are about to face a new challenge. With retirees expecting the same level of services as before, the reduced workforce will need to pay more tax per person. The choice is stark: either the retirees accept less or the reduced workforce pays more.
Or perhaps you take our advice and choose never to retire!
In his new book "The Big Tilt: What happens when the Boomers Bust and Xs and Ys Inherit the Earth", demographer Bernard Salt argues that immigration is the answer, at least over the next 15 years. Beyond that the benefits of the Superannuation Guarantee should reduce Australian Government expenditures as retirees become more self-sufficient. He also argues that Boomers staying in the workforce a little longer is not the answer.
Salt says the Big Tilt changes everything. He estimates that by 2015 alone, the Australian workforce will fall by 30,000 as more people retire than enter the workforce. The implications for business and politicians are profound. With 30,000 less working consumers and 30,000 more retired consumers the economy will be very different.
The Big Tilt is not unique to Australia. Japan tilted in the mid-1990s. China will face the same problem around 2020 as will many industrial nations at various times. In Australia the Big Tilt is about to begin and, depending on Government policies, is expected to last 15 years.
Shakespeare also wrote "To be, or not to be: that is the question: " What do you want to be over the next 5 or 15 years? Will you update your skills and let them grow as you do, or will you simply let them age with you?
The Big Tilt is a challenge that will bring many opportunities. With potentially fewer people in the workforce, people skills will be a tremendous asset and keeping them up to date a rewarding investment.
QUOTES TO CONSIDER
"The golden age is before us, not behind us."
William Shakespeare (1564-1616), English author, playwright & poet.
Do you see a golden age before you, or only in review?
"We know what we are, but not what we may be."
William Shakespeare (1564-1616), English author, playwright, & poet.
Does your star only shine on who you are, or is it free to see what you yet may be?
Charles Kovess CSP
Australasia's Passion Provocateur ©