A falling global population will have a huge impact on the labour market - Rashmi Dube

Are you in manufacturing? Are you directly or indirectly affected by the manufacturing sector?

The answer is yes, you are likely to be impacted, particularly in Yorkshire. As we work towards exiting the pandemic, we see across the horizon the issue facing us is people. There is a reducing population and globally we are ill-prepared for what is around the corner. By 2100, 23 nations will expect to see their population halved, including the UK.

The World Population Data Sheet 2021 version released by the Population Reference Bureau (PRB), shows that there is a decline in childbirth and “middle … and high-income fertility rates for all age groups have declined since 1950”.

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With the population being predicted as reducing, this inevitably will lead to an inverted age structure with more older people than young. We have always topped up our labour market with migrants in the UK and are beginning to feel the impact of reduced access to this pool of labour. We cannot also ignore the impact of technology and changes that is bringing such as Artificial Intelligence.

A falling global population is set to have a huge impact on the labour market

The Business Standard reported: “A recent Oxford Economics report estimates that 20 million manufacturing positions will be lost by 2030 with lower-skilled regions hit the hardest. Oxford’s econometric model found that, on average, each newly installed robot displaces 1.6 manufacturing workers. About 1.7 million factory jobs already have gone to robots since 2000, including 400,000 in Europe, 260,000 in the US and 550,000 in China. ”

But the news is not as dire for two countries, China and India, who it is predicated will have the highest population globally. This is not to say they will not be impacted by the decline, they will.

The other caveat is for African nations. Asian countries have the same issue of an aging population and Africa will surpass Asia.

The demographic changes are rapidly occurring and time is also a critical factor yet currently, even in the pandemic, the UK manufacturing sector is worth £191bn of output, showing “…a 7 per cent growth in the last five years …with 46 per cent of UK goods being exported…” and currently the “UK remains the ninth largest manufacturer”.

I end up therefore circling back to a road I have spoken about before – reskilling and upskilling the older generation. Who in government is making the 100 plan for our country? The starting point has to be skills particularly in the north and in Scotland.

I believe that the blame is likely to be laid at the feet of women, with such comments as “women are having fewer children” as if the sole decision lies with women.

But, in fact, this is likely to be a product of employers not giving the flexibility to women to have children and not be concerned about returning to work. Women having children have to consider whether they will: a) still have a job b) lose the promotion c) have to work full time but have the ability for flexible working.

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Given the prediction that the population will peak globally at 9.7 billion around 2064, “before falling down to 8.8 by the end of the century…” (University of Washington), I think there is time to change the course, but it will take vision, strategy, resources and, above all, sheer guts.

Business alone cannot do this and changes in regulations and legislation are needed. Sweden took this route and increased fertility from 1.7 to 1.9. Are you willing to try whilst remembering not to comprise women’s rights?

By Rashmi Dube - Partner – gunnercooke