Immigration patterns, Racial Diversity and Age Diversity
The other big thing we’re seeing in the news today is how COVID-19 has changed work patterns and immigration patterns and how it impacts racial diversity and age diversity of the workforce. One of the big trends is that people from Brazil, India, Bangladesh and the Philippines are traveling to places like the Middle East, UK, Canada and the US to work. Many of them stay there, become permanent residents and become citizens. But with COVID-19, we’ve seen a bottoming-out of certain parts of the economy, particularly low salary jobs.
Countries have to get their economies kick-started and growing again. There are two ways to do that. First, you increase your productivity per citizen, or you bring in more people through immigration so your GDP grows.
Canada set an immigration target of 400,000 people in the next year. This means that they want to bring in 1% of the population to apply for permanent residence and eventually become citizens. That’s a big number. Canada, obviously, has a track record of integrating people well, and they also have a points-based system so they’re sure that the people they invite in have the wherewithal and means to earn a good salary, integrate into society and be a net-positive contributor. It’s worked for Canada. They have a different system, and they seem quite happy with it, so well done to them.If you have a country where the population isn’t declining—the population is more or less steady, but you don't have enough new people coming in—the population ages. Over time, you have more old people and fewer young people. In that case, there… Click To Tweet
What’s the insight? It isn’t about countries. It’s about companies and families. If you have a country where the population isn’t declining—the population is more or less steady, but you don’t have enough new people coming in—the population ages. Over time, you have more old people and fewer young people. In that case, there are fewer young people to take care of more old people, and you have fewer young people who have to work much harder.They always say that any developing economy needs to become richer before it becomes older, which is a difficult demographic challenge that China is going to have to deal with. Click To Tweet
They always say that any developing economy needs to become richer before it becomes older, which is a difficult demographic challenge that China is going to have to deal with. For example, you see this often in families and companies. Imagine a company that never hired any new employees. So, its headcount is 10,000 people, and in 20 years, the headcount will still be 10,000 people, but everyone is 20 years older. The people who are 20 years old will now be 40, so they’re at their peak earning potential. Those who were in their 40s are now in their 60s. Those in their 60s are now in their 80s, which means, on average, they’re not as productive. They can’t work the hours. They don’t have the stamina, flexibility or agility. Their output is going to be—all other things being equal—lower than the younger people.
Imagine a family where no babies are born for 40 years. What is that family going to be like? Who cleans the yard? Who takes care of people? Forget about practical work. What about the joy of hearing a baby laugh? That may be one of the most beautiful sounds in the world.you have to replenish not just the racial diversity of your workforce, but also the age diversity of your workforce. Today, there's a big focus on diversity, and I applaud people who are focusing on that. Please continue and do more on that. But… Click To Tweet
The point is that you have to replenish not just the racial diversity of your workforce, but the age diversity of your workforce. Today, there’s a big focus on diversity, and I applaud people who are focusing on that. Please continue and do more on that. But at the same time, there also needs to be an equally big push to change the age profile of your workforce. There has to be a conveyor belt of bringing in younger people. You can’t get away from it.Long-term trends are driven by the ages of populations, not the diversity of populations. You can have the most diverse population in the world, but if they're too old to be productive, it doesn't matter. Click To Tweet
I would hope that those who are reading this and pushing through diversity programs do not ignore the fact that long-term trends are driven by the ages of populations, not the diversity of populations. You can have the most diverse population in the world, but if they’re too old to be productive, it doesn’t matter. You’re not going to be competitive. If you look at what’s happening with China, it’s the aging of the population, not the diversity of the population. The long-term health of the US is driven by the fact that it’s unusual among developed, wealthy nations to have a relatively young workforce. I can tell you right now that if the US had an older workforce, we wouldn’t be having a discussion about diversity. We’d be ringing alarm bells about the age of the workforce.
This is an excerpt from Monday Morning 8 a.m. newsletter, issue #21. Many of you have found Monday Morning 8 a.m. so useful that you’ve asked us to release a book version of these newsletters. We’ve obliged and released a Kindle version, which you can find on Amazon under “Strategy Insights.” It contains the insights from previous Monday Morning 8 a.m. issues, edited into a bite-sized format that’s very easy to use. And you can learn about other FIRMSconsulting books here.
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