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In recent years there has been a lot of discussion about the changes to the economy resulting from the retirement of the baby boomers, the coming environmental difficulties related to global warming, the mitigating effects of globalization, and the increasing price of oil. Each of these items could have a serious negative affect on both U.S. and global commerce if they come true. Assuming that all of the doomsday analysts that believe in any of these aforementioned difficulties were correct, few could imagine a day when all of them were true at the same time. What would society and business look like? Who would be successful and who would suffer under the new economic realities? Is it all simply made up in our mind or is it something that could be very true and disastrous? Let us discuss each of these items separately. Retirement of Baby Boomers: The baby boomers represent a time when the economy was zooming along and people could find jobs without really looking. People typically stayed employed with the same company their entire lives and when they retired a pension and gold watch was waiting for them. Baby boomers were born between 1946 and 1964. Assuming that they work about 30 years and entered the labor market around 20 years of age that would mean nearly all of them would be out of the work force by 2014. When these baby boomers leave, so will a huge source of revenue, knowledge and earning capacity. The loss of the baby boomers means that the value system of the country will shift to Generation Y which is much more self-centered and fluid than the originally thought selfish baby boomers. Thus the economy will be affected by this shift and likely lose a certain kind of mature stability. Environmental Collapse: The world is beginning to be concerned about the coming effects of green house gases in the environment. It is believed that in the next 20 years the environmental problems are not solved it will be almost impossible to solve them later. In other words the environment won’t be able to regenerate itself. If environmental collapse happens it is expected that climates will change damaging the economy of many countries, burning out many farms, lose of species that can no longer survive under the earth’s atmosphere, and flooding of productive land. Fixing this land requires a sizable corporate, government and world wide resources that are likely to slow down economic growth. Consumers will have to pay more for products that slowing down production even further. Globalization: U.S. workers must only be asked about the effects of globalization on their lives to truly understand people’s opposition to it. Where manufacturing workers made $20.00 per hour they are now drawing $10.00. Despite these lower wages inflation hurdles forward, colleges become more expensive, and housing costs are rising. In the end, the American worker loses his position as labor becomes abundant and jobs sparse. In the event that American workers can afford less they will begin to purchase the basic necessities of life versus Gucci watches, and two new cars. This slow down in purchase is likely to change the mentality of the average American person to survival and maintenance of family wealth. Relationships will become defined by wealth and influence leaving the lower class bared from better jobs. Rising Price of Oil: There is only so much oil in the world. As oil becomes more important and limited, its costs will rise. Not only will the cost of the oil but gasoline, heating costs, plastics, and just about everything else will rise with it. In the end the American consumer will be paying more for less. This dependence on foreign oil combined with the harmful affects of burning fossil fuel is creating an alternative energy crisis. Companies like Ford, GM and Chrysler are racing to build more fuel efficient vehicles. Ethanol processing plants are popping up all over the Corn Belt, new discussions have emerged on nuclear energy, business associations are soliciting government for reform, and wars are now being fought over the commodity. What will happen in the next 10-20 years when the baby boomers retire, the effects of globalization take full effect, conservation of the atmosphere consumes government resources, pay is low, college costs too much, and basic products increase in price due to oil shortages? Of course no one really knows. What we can say with some certainty is that changes unlike anytime in recent history are coming and today’s young professionals will have to handle them. Murad Ali is a three-time published author, a Ph.D. candidate and a human resource manager. http://www.thenewbusinessworld.blogspot.com
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