Free Essay: What Will Be the Impact of Changing Demographics on the US Business and the Economy?

The US is undergoing a demographic change at an unprecedented rate. According to population forecasts, White Americans will be less than 50% of the population by 2060 (pbs.org). As compared to other developed countries, the US population is growing at an alarming rate due to widespread diversity in terms of racial and ethnic composition. Studies indicate that Asia has overcome Latin America as the source of immigrants in the United States. Nevertheless, the Latino composition is still high at an estimated 18% of the population while African-Americans and Asian make up 13% and 8% respectively. According to a PBS documentary "The New Deciders," the minorities in the US are stepping up to participate in elections and activism to fight racial and ethnic discrimination. The documentary also highlights the rise of millennials in public participation to eradicate social ills. Therefore, the paper aims at analyzing the impact of the changing demographics on the US business and the economy.

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Demographic shifts have a significant impact on the economy. In the 1950s, the population of Americans over the age of 65 accounted for 8.1% of the population. Currently, the average age of White Americans is 43 years. Future forecasts predict that the population of the aged will rise to 20.2% by 2050 which will surpass the millennials (Goodnough, 2014). As such, aging has a negative impact on the economy. First and foremost, an aging population implies a greater demand for healthcare. The healthcare system in the US will face challenges due to shortage to the workforce to meet the rising healthcare demands. Similarly, the country will need to implement health care reforms aimed at improving patient care which will also require increased funding to promote the universal healthcare system. On the other hand, due to increased diversity in terms of racial and ethnic composition, states in the US are facing a hard time adding the Latino population in the healthcare system. Majority of Latinos are uninsured because they face low incomes and are affected by poverty. The Affordable Care Act implemented by the Obama Administration aimed at providing insurance coverage for low-income families and communities. Immigration policies bar immigrants from procuring insurance coverage at the federal and state exchanges, hence, are not eligible for Medicaid.

An aging population negatively impacts the US economy through loss of the labor force. A majority of whites in employment are almost in their retirement age which implies reduced productivity. Nevertheless, the growing population of millennials will benefit the US economy in terms of available labor. Furthermore, there is a growing population of millennials from the minorities that if embraced by the economy can steer positive change in the US since a majority of them have access to education. According to "The New Deciders" the rising population of young people is important especially if they participate in the public governance of the country. These people are the drivers of change through innovation, creativity and via embracing technological advancement.

Likewise, the changes in demographics have major implications on business. Therefore, businesses analyze the changes in family structures, population shifts, age, diversity, and education. The economic environment is significant because it impacts the purchasing power and consumer behavior that businesses closely evaluate. In other words, the changing demographics demonstrate a shift in consumer spending patterns with the current consumer emphasizing the value for money through improved product quality. The increased population diversity also indicates that businesses have to be innovative to meet new target consumers. For instance, in the period between 2010 and 2012, the sale of ethnic food rose by 4.5% and generated $8.7 billion (Strom, 2013). The rising population of Hispanics also indicates the need for businesses to provide products and services consumed by Latinos. This proportion of the population consumer behavior is guided by cultural aspects and as such, is more likely to consume products and services that match their customs. For example, the fruit-based drink, Jarritos is popular among the Hispanics, especially among the Mexicans. However, with its growing popularity, the soft drink is being purchased by other Americans that are not necessarily Latino. Therefore, food and beverage companies are investing billions of dollars to transform the product line to access the new American palate (Strom, 2013). Besides, other than food, media consumption is also changing as Hispanic media companies are striving to venture in the US population to reach the 50 million Latinos residing in the country. The bottom line is that demographic changes create new opportunities for businesses to expand due to the increased consumer market. The rise in the population creates a demand for goods and services because businesses produce for a ready market. However, demographic changes can lead to negative business practices to source revenues. Beth Jacobson, a former loan officer at Wells Fargo claimed that the company offered bad loans to African-American for subprime mortgages (Mui, 2012). According to her, the firm provided mortgage financing to black communities at higher interest rates even for people who could not afford credit on a normal circumstance. In return, the firm profited greatly from the shoddy loans churning an estimated $50 million (Mui, 2012). Without proper legislation, businesses can exploit the diverse population that may be unfamiliar with the US statutes for profit.

On the contrary, the changing US demographics have created tension in the political arena. When President Trump announced his bid for the presidency, one of his core priorities was for Latinos to provide their documentation to prove their legal status of being in the US. As a result, he promised that his administration would deport 11 million undocumented Latino immigrants living illegally in the country (Varela, 2015). Furthermore, Trump proposed the construction of a wall in the US-Mexico border to hinder illegal immigrants from crossing over to the US. However, due to his stance, there was uproar and a contentious debate between Democrats and Republicans over the state of immigration policies. In light of Trump's proposal on how to solve the immigrant influx in the US, the majority of Hispanics vowed to vote for Hilary Clinton in the 2016 presidential election. Furthermore, when Trump won the election and was sworn in as the 45th US President, he issued a presidential order that blocked the entry of immigrants from Muslim majority countries particularly Iran, Somalia, and Yemen among others. The move led to contentious debates that even attracted the attention of the Supreme Court. In light of this, the PBS documentary illustrated how Arab Americans are also rising up to vie for public office like the case of a Christian Arab with roots in Egypt who was vying for a seat as a judge in Ohio. In addition, the documentary illustrated how minorities have enrolled as voters in the last two general elections with the aim of changing governance, policies, and politics in the US. Therefore, the New Deciders have a major role to play in America as they rise for liberation and activism to protect their American identity.

References

Goodnough, J. M. (2014, February 13). States Struggle to Add Latinos to Health Rolls.

Retrieved from https://www.nytimes.com/2014/02/14/us/states-struggle-to-add-latinos-to-health-rolls.html

Mui, Y. Q. (2012, June 12). Ex-loan officer claims Wells Fargo targeted black communities for shoddy loans. Retrieved from https://www.washingtonpost.com/business/economy/former-wells-fargo-loan-officer-testifies-in-baltimore-mortgage-lawsuit/2012/06/12/gJQA6EGtXV_story.html?noredirect=on&utm_term=.2286fc3631fa

Strom, S. (2013, July 09). American Tastes Branch Out and Food Makers Follow. Retrieved from https://www.nytimes.com/2013/07/09/business/american-palate-grows-more-adventurous.html

The New Deciders. Retrieved from http://www.pbs.org/video/2365833145/

Varela, J. R. (2015, August 31). Trump's immigration plan would require every Latino to show their papers, please | Julio Ricard Varela. Retrieved from https://www.theguardian.com/commentisfree/2015/aug/31/donald-trump-immigration-plan-would-require-every-latino-to-show-papers