okay back to workforce uh the next generation down after the baby boomers are gen x that's my
generation we are the smallest generation uh to that point in american history now the problem
with gen x is that we looked at the baby boomers and we did not particularly care for what we saw
there were so many baby boomers that when they entered the workforce they pushed down the cost of
labor which meant that most two parent families that second parent had to enter the workforce
so they could make ends meet but all that did was provide more labor and push down the cost
of labor even more gen x saw this manifest as high divorce rates and so gen x made the
decision to not follow that path our divorce rates are not nearly as high as the baby boomers
but neither is our workforce participation so there are not enough of us even if we were all
working to step into the many baby boomer shoes but all of us are not working now based on who
you are as an extra this is great because we're finally seeing labor price appreciation we're done
being interns we're taking over all those high position jobs but there are nowhere near enough of
us which means we're seeing sharp labor inflation that will last for at least the next 15 years
now gen x's kids are the zoomers and they are unique as the generations that have come
compared to the generations that have come before because they're
anti-social they were raised by gen x so they were always told that there was never going
to be any money for you in social security or pensions or health care you have to work hard
you have to be better than it not just everyone in your class but everyone period you can rely
on no one but yourself as a result they've got the highest suicide rate in american history
and they have a real very very different approach to work they see it as an obsession so when
you think of millennials they're all you know touchy-feely they're all collaborative that's
very true they're good at management working with people they're good at sales the zoomers are good
at none of those things the zoomers want to sit in a closet and code in the dark i think it's
best summed up if you look at their fiction so if you're a millennial it's all about harry potter
you have a wand you're special you play a weird game of soccer and at the end of the day you
win you carry the day not because you're smart but because of who you are and then you've got
the zoomers they watch the hunger games you and you fight to see who gets to have lunch
very different mindset and look how small of a generation they are they're smaller than the
xers which means that as long as the boomers are the replacement workforce and they will be for
19 years employment will never recover to where it was in 2019 it is statistically impossible
and then last and not least are the millennials now they're a large generation which does give
us a bit of hope in terms of taking the sting out of what's going on in the labor markets
kind of there are two types of millennials the first half are the ones who meet the stereotype
they sleep until noon they didn't get their first job until they're 27
they their mom drives them to work they took an extended adolescence
they didn't enter the workforce till years later meet the stereotype the second group don't
they did what they were supposed to they put their nose to the grind stone in school and as soon as
they left they didn't go on a three-year trip to europe they immediately entered the workforce
only for the financial crisis to wallop them up at the side of the head
whether it's because they did everything right and so they were the last ones in and
first ones out during the financial crisis and lost years of experience or because
they went out to find themselves for several years and they lost years of work experience
the millennials missed out on three to five years of those first critical moment three to five years
of those first critical jobs that all of us normally had which means that the millennials
today are the least skilled worker cohort that we have ever seen and they will always be behind
the hope for the american workforce is not with the millennials per se it's that the millennials
as a large generation generate a large generation we're not waiting for the millennials to fix this
we're waiting for the millennials children to fix this which means that the american
labor market isn't going to be better in 6 months or 12 months or 36 months or 100 months it will
not be better until the next generation is old enough to enter the workforce in mass around 2045.
and then there's the canadian position this is where the demographic comparison between
canada and the united states breaks down because there isn't much of a millennial or
zoomer generation because canada does not generate its workforce from repopulation
canada generates its workforce via immigration
canada is dependent upon its tax consumption and financial base of people who were not born
canadian now there are some perks to this it does generate higher economic activity when you bring
in people in their 30s and 40s who always already have a lot of experience under their belt it
really helps for things like real estate that sort of growth that you guys are seeing up there would
not have happened without your immigration inflows and as long as immigration holds then okay you can
ride the bubble but should immigration break for whatever reason the single largest source
of financial liquidity the single largest source of economic growth in canada collapses because
real estate is what you've got it is the single largest economic sector by a significant margin in
the case of bc three to four percent of government revenue is nothing more than title transfers and
most of the construction that you're seeing is with foreign money it's it's kind of like what
was going on in the united states in miami in the 1980s but in canada it's a national phenomenon
if something happens to that immigration treadmill it all stops and the concern that i have not for
canada or at large but for bc specific is that in bc the treadmill is not working any longer
because if you're in quebec or winnipeg or toronto the immigrants come in they settle they get into
real estate for themselves logical they need a house in bc you're not getting the immigrants
you're just getting the money and so there's a whole phalanx of issues that can go wrong they
can just encourage that money to go somewhere else it makes british columbia by far the most
vulnerable pres the most vulnerable province not just in canada but in all of north america
anyway you think you've got problems consider where the money's coming from
this is the demographic structure of china in 1950 right when world war ii ended you can see
that a baby bust when the war ended perfectly reasonable you fast forward that 30 years and
this is what it looked like now this is the demographic structure that terrified mao he was
concerned that the explosion in the birth rate was going to generate a huge number of chinese
that were going to literally eat the country alive as a result we got the one child policy
so this is where we ended up in the year 2000. now when westerners look at this we
see a bottomless supply of cheap chinese labor threatening everybody's jobs when the chinese
pulit bureau looks at this they see a bottomless supply of chinese consumers not workers consumers
who will remake global norms we were both right were past tense this is china 20 years ago
here's china today kind of today peaking consumption a halloween labor force and a
rapidly grain population as of january of 2020 china was the fastest aging society in human
history the one child policy had been in place for so long the whole place was facing demographic
collapse the question was how soon now in 2020 playing the numbers forward the best guess was
that by the year 2100 that the chinese would have less than half the population that they have today
so from 1.4 billion down to 700 million but then the chinese started releasing releasing bits and
pieces from their census and that date 2100 got moved bit by bit forward until by the time we got
to october they were thinking they were going to be at that 50 point by 2050 just 30 years from now
for that to be true china's real population structure has to look a lot more like this
it appears that the chinese have over counted their population
by an in excess of a hundred million people and with most of the over counts for people who were
born during the one child period people who are under 35 the people could possibly theoretically
generate a replacement generation and considering how chauvinist chinese culture is the vast vast
vast majority of the overcounts are probably women which means that china's population didn't peak
in 2019 like they were thinking it probably peaked in 2004
and there are other statistics that have been gathered that support that this is where we
already are with labor costs probably being the primary one
here are a number of monthly labor costs for some southeast asian countries that i
actually think will weather the globalization reasonably well
here are our mexican partners right in the middle very competitive and here's the prc
china already has the fastest labor cost appreciation in the world
they've increased by a factor of 12 in just over 20 years but labor productivity has only gone up
by two to three hundred percent in the same time they are no longer cost competitive in anything
you