Tuesday, September 22, 2009

Demographics and all that

There is a discussion on the Real Estate Forum about whether BC should continue to attract young people. Migrants from other Provinces or immigrants to keep the tax base high.

There are lots of opinions but no data.

Well here is one piece of data- median age:


As you can see we are sitting at a pretty high median age in most parts of the Province. Some parts like South Okanagan are over 50. That means half the population is over 50 years of age!

Lots of areas are over 40, and the curves are pointing upwards. BC's over-all median is 40 and is likely to keep moving up. Even if we had a baby boom now, and the median age came crashing down, those bouncing babes wont be paying tax for two another two decades.

Take out the children and students and retired folks and that doesn't leave a lot of people left to carry the increasingly heavy tax burden. WE NEED YOUNG PEOPLE NOW.

By contrast China's Median age is 33. In India it is 25. Canada is 39. Ontario is 37.

The fight in the near future will be to how attract young people. Countries which have low birth rates and low immigration, and an elderly population who expect good benefits are near implosion.

eg Japan which has been a two decade long deflation partly due to demographics.. has a debt to GDP of...wait for it...of 197%!!

How are young Japanese going to pay this huge debt, when there are less of them and lots of older folks who will need care and support? It defies belief.

This graph demonstrates the shift that is going on quite dramatically:



  1. BTW the median retirement age in Canada is 61.

  2. Well, the Japanese will probably use robots. Boosting population is a sure way to boost GDP, however it also tends to produce a lower quality of life in the short term so people howl. I agree that Western countries need more immigration to sustain their ponzi economies based on debt. The good news is there is no shortage of young people worldwide who want our standard of living and would be willing to work for it. We have more opportunities here than in 80% of the world.

    The bad news is that that letting everyone in would greatly accelerate wage deflation and lead to crushing unemployment among the less competent. We could have a viciously competitive country, but too much of that is not healthy. A giant rat race is not something to be envied, although I'm sure it would have many admirers on the outside.

    So any immigration policy has to strike a balance between growth and values. This country tries harder than most not to leave people behind, and over the long term that has paid dividends. We have lower crime and our poverty is less extreme. I'm sure there will be a race among the developed world to import talent over the next few decades. I hope we do not forget what made this country good in the first place. Most people just want a nice place to live.

  3. I agree Anon.

    Couple of things to remember though:

    1) Rural Canada is very spread out and very sparsely populated in most places. Yet everyone expects power, healthcare, food, safety to be brought to them. That costs a fortune.

    2) Urban Canada is aging and wants all the above too.

    Somehow we have to pay for this gilded lifestyle. We may make it with resources..oil, gas, etc like The Gulf States..but we still need young people to do the work. Dig the mines, clean up and feed the elderly, keep the peace etc.

    If we cant make enough we have have to get them from somewhere else:)

    After this recession is over (?2012 or so). The next battle will be for young healthy productive workers. In between with high umeployment it may not seem so, but we will get there.

    By 2040, in Japan, the male workforce between 20-65 could be as low as 25% of the population. Even if all the women work that still leaves an unsutainbale 1:1 ratio between those working and those too young or old to work.

  4. Why is it that I know so many educated young adults who can't seem to get consistent, long-term, quality employment? Something isn't adding up. Or is it the boomers refusing to give up any of their perks?

    Before we open the immigration floodgates again, we need to make better use of the under-40 crowd.

  5. PW- I think the forecast surge in boomer retirement has been delayed a bit due to lack of savings, stock-market set-backs etc. If RE drops you can expect a further delay.

    However it will happen eventually due to aging, and then there will be the sudden demand for replacements and tax-payers!

  6. Maybe we should ask the First Nations what they think about this, since we tricked our way with false treaties onto their lands.

  7. Patiently- maybe they are educated in the wrong things?

  8. frank, fine, but what are the right things? I'm having a hard time coming with more than a few examples, and once everyone trains in those, they are no longer the right things. :P

  9. Anon 7:13

    WE didnt trick anyone. My parents didnt trick anyone. My grandparents didnt trick anyone. People 200-300 years ago did some dishonnest things. No connection to me. The government is generally trying to make up for it now, though they are crooks themselves so who knows if they are being honest.

    None of this has anything to do with real estate so drop it.

  10. On another more related note. Doesnt this bode pretty well for people in their 20s and 30s now as there will still be tons of jobs to do after all of these people retire? As far as I can see young skilled 20 somethings such as myself will be in demand over the next 20 years, I just am worried that all of the money I earn will go to paying off this debt we are generating as well as the pensions of the millions of boomers in the next few years.

  11. davers, it bodes better for people in their 20s. Those in their 30s quite often have wasted a few years stuck career-wise with a logjam of boomers ahead of them. I agree this will change, but not before many of those are in their 40s and running out of time.

    The recession would make career choices a bit easier, I guess. So many directions are no-go for now. I hear they need Paramedics. But despite being in demand, the government uses its powers against them.

  12. Davers.

    I suspect anyone in the 15-25 range will be on the wave of the next boom, but there will be some hard times in between.

    The world population is growing, and eventually consumption and growth will pick up, once this speculative bubble burst has done it's worst (2-3 years)

    I also worry about the debt we are leaving the younger generation.

    I suspect eventually there will be the default I mentioned (print your way out)

  13. Fire up the turntable - Logan's Run is coming to a nursing home near you!

  14. I don't know why you're worried. Boomers can sell their houses to offset their retirement expenses. This boon will pale in comparison to any taxes the government can raise from 30somethings. Most of the incomes will be going to paying down the mortgages of the houses they just bought. Not much left for the taxman LOL

  15. Davers,
    There are plenty of "young and skilled" workers trying to survive on less than a dollar a day in third world countries. Think about it.

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