In the mid-eighties country music icon George Jones sang “Who’s Gonna Fill Their Shoes?” In the song he lamented about an immanent vacuum of talent in country music to replace what had once existed. Today it seems we are in the midst of a similar situation in the job market. We are in the midst of an exodus of Baby-Boomers with an aggregate stalling of job market participation from Millennials. Who’s going to fill their shoes?
While Baby-Boomers might be delaying retirement to some degree, their impending exit from the job market is not going to stop. The smaller generation between the Baby-Boomers and Millennials is Gen-X. With their career experience, they will likely fill many of the positions that the Baby-Boomers leave vacant. Yet, where, or maybe the more appropriate question is how, will the Millennials fill in where the Gen-Xer’s left off?
In the U.S. and other western countries the scope of the economy is wide and deep. Many different types of jobs exist and the knowledge to complete such jobs may take years to learn and even more to master. If Millennials do not transition into the job market at a similar pace that previous generations did, then it must be assumed that the knowledge transfer that has occurred between generations in the past is lagging. The lag has consequences; not only for each individual, but for the entire society.
The collective delay of Millennials into the workforce creates an environment where the affliction of economic devolution is much more prone to arise. The incremental loss of knowledge, experience and ambition has a cumulative impact across society. For example, the auto mechanic that has one year experience might have the same mental capacity as the auto mechanic that has 10 years’ experience, yet the overall service will be superior with the more experienced worker. Why? Experience matters.
Being in certain situations or up against certain predicaments creates an environment where learning occurs. When workers lack these experiences, the quality and consistency of service and goods declines. This translates to into a devolution of the economy and thus the entire society.
We are living in historic time. Seniors are soon to become the largest segment of the population. This is a shift in the historic and natural norm, which has never been experienced. Concurrently, the replacement generation, the Millennials, are at a loss in their entry into a career a path. The generation that was supposed to ‘fill their shoes’ is exhibiting symptoms of being woefully unprepared to do so. It is certainly open to speculation as to what these two concurrent forces will mean for the state of our economy and society.
As a long-term investor, I do not see the trends outlined above as being bullish. I see both as being headwinds in the face of whatever positive economic momentum we experience in the years ahead. My recommendation is to invest in companies that are innovating new senior incontinence products. Even if the shoes aren’t filled, I’m sure the diapers will be.