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Long before most of us, Tom Gillaspy knew 2008 would not be a great year.
He didn't know that Lehman Brothers would collapse that year, helping to trigger a financial crisis and the biggest downturn in the U.S. economy since the Great Depression. But as Minnesota's state demographer, Gillaspy knew that in 2008, the front of the wave of retiring baby boomers would hit age 62.
"We knew something bad was going to happen. We didn't know there would be a Great Recession," Gillaspy told the National Farm Business Management Conference in Bloomington, Minnesota, last summer.
Gillaspy, who retired last spring after 32 years, got his doctorate in economics at Penn State University. In the process, he learned that population growth is a key factor in economic growth.
In the U.S., the effect of what Gillaspy calls the gray tsunami is that it brings more exposure to the problems of government debt and the need for more government services, just as it contributes to slower growth.
"The recovery is modest. It is slow. It is difficult. This is not a surprise," he said.
A global trend
The trend is widespread across the globe. Greece, Spain, Italy, and Ireland have even older populations, he said.
"When you read about them, a big part of the story is they are older than we are," he said.
In the European Union, the trend toward an aging population is about a decade ahead of the U.S., he said.
Japan, whose economy crashed in the early 1990s and suffered years of stagnation, is about 20 years ahead of us in the growth of an aging population. In fact, the growth of working-age population is slowing or declining in most industrialized nations. That will be a drag on the global economy, Gillaspy said.
How does this affect agriculture?
If you think the market for food exports to China will be the same forever, think again. In the coming decade, China will add more people over 65 than North America, Central America, South America, and Europe combined.
Will cheap farm labor from Mexico always be abundant? Mexico's birthrate will soon be below that of the U.S.
"We are seeing changes in the world today that are unprecedented in human civilization," he said.
Part of the answer to the challenges facing the world economy will be increasing productivity, according to Gillaspy.
"Agriculture has always had a single-minded focus on productivity," said Gillaspy, a Texas native who is also an agricultural economist. Other sectors of the economy are going to have to increase productivity at a faster pace in order to maintain economic growth.
The world is on the verge of a third industrial revolution that will use robotics, new materials, software, and bioengineering, he said.
Gillaspy's audience in Bloomington included part-time farmers and ranchers. But the group was made up of professionals who work with farmers on improving management, analysis, and record keeping. It was a combined meeting of the National Association of Farm Business Analysis Specialists and the National Farm & Ranch Business Management Education Association.
Tom Gillaspy | www.gilldem.com