Beware the IDEs of the Super Age
Let’s Talk Supply Chain
The pandemic has brought a number of issues to light that most people would not have never considered before in their day to day lives. At present, it is the volatility of the supply chain.
From toilet paper to televisions, the world’s markets rely on a complex network of production centers and distribution networks. This system of commerce is encountering a stress test unlike any other, and the pandemic is often to blame. Goods and services are simply harder to access; there are delays in some cases, and outright shortages in others. This scarcity is causing prices to shoot upwards.
But what if the pandemic was simply shining a light on systemic fissures that had emerged years ago, if not decades? What if the pandemic was a convenient distraction from the reality that demographics, in particular population aging, were impacting the way in which people around the world obtained goods and services? What if we knew where to spot these cracks years before they became structural? Some of us do, and that’s where the concept of “interconnected demographic economics,” or IDEs, comes into play.
IDEs are causal relationships that describe how seemingly innocuous relationships like the average age of a certain sector (and oftentimes individual businesses and business units) can directly impact the ability to produce and distribute goods to market, which directly impacts cost. By paying attention to IDEs, we can make reasonable predictions about where and when there will be challenges in the marketplace of goods and services.
Keep On Truckin’
As we continue to explore the coming realities in the Super Age, our newsletter will explore a number of industries that are being affected by IDEs. We’ll share those that are adjusting well, as well as those that could use some help.
Take, for example, the American trucking industry. Did you know that the average age of a long-haul trucker is nearing 50? It’s a profession that is largely made up of white men. It’s hard and solitary work, but it pays well enough – on average $64,000 per year – to land these drivers squarely within the middle class. Yet, a combination of high turnover and dried up pipeline of new workers are causing headaches nationwide. A report from the American Trucking Associations in 2019 suggested more than 70 percent of goods consumed in the U.S. are moved by truck, but the industry needed almost 900,000 more drivers to meet rising demand.
The trucking industry isn’t alone. Multiple industries across varied sectors are experiencing similar challenges recruiting and retaining workers, but let me be abundantly clear here: There is no immediate labor shortage. There are still plenty of people to go around to fill the jobs that are available today. It’s the businesses that are struggling to shift their employment strategies in the Super Age.
New Challenges for a New Era
The strains on the labor market are due, in part, to our over-reliance on cheap labor. The United States, and most of the world for that matter, hasn’t experienced this tight of a labor market since the period between the end of World War II and when the first boomers entered the labor market in the 1960s.
Older, more expensive labor was moved out of the workforce in favor of younger and cheaper workers. In the United States, the labor force participation rate for older workers shifted from nearly 50% in 1950 to only 14% in 1990. Reintroducing older workers is central to any business strategy. Businesses that embrace the change will reap the greatest rewards.
There’s an adage that necessity is the mother of invention. Tackling the demographic realities upfront will help ease disruption to the supply chain, but also to the economy at large. This only happens if private sector enterprises are willing to assess their workplace demographics, understand employee realities, and develop strategies to retain and recruit ALL workers. We created the CASE model, which encourages Super Age employers to compete, augment, support, and extend:
Compete for new talent by increasing salaries and improving benefits
Augment the current workforce with automation and artificial intelligence
Support the lives of all employees by offering flexible work schedules and working environments
Extend working lives by improving workplace ergonomics and conditions
What are you doing to meet the IDE’s of the Super Age? We’d love to hear about your innovations.
