The refusal of the Boomers to have children at or above replacement rate levels in combination with the massive expansion of debt and the evisceration of jobs across all sectors leading to forced socioeconomic stratification for the younger generations with no serious, viable, long-term solution to the problem are not separate but integrated issues. What has happened is that a glut of people exists without the systems to support their current way of life that is going to collapse in a miserable way in the future, with the economic consequences coming directly from the demographic ones. This reality, which has been warned about for years, is now starting to become a larger part of public consciousness.
If birth and death are the bread and butter of demography, then marriage is the knife. Married people have more babies and have much lower odds of dying. Marriage dramatically reduces the odds of death for men in particular while modestly lowering the odds of death for women.
But the point is that marriage is the demographic engine, and the increasing postponement of marriage among upper-class Americans, and the growing total abandonment of marriage among many working-class Americans, is yielding its demographic harvest. Increasingly isolated Americans, and especially men, are engaging in high-risk, anti-social behavior that greatly increases their odds of death, while these same generations are simply not replacing themselves with children. This despite the fact that birth rates among married people have been approximately stable for two decades.
Most bankers recognize the role that marriage plays. Married couples come in together to open new bank accounts. They take out life insurance policies on each other. They buy and move into a new home together. They start planning in a different way for their life together. And that life is more likely to actually occur, thanks to marriage’s positive influence on demographic fundamentals. But more than this, economic and sociological research has shown that married people tend to be happier and wealthier. This isn’t just selection effects either: marriage actually creates new economies of scale and scope for a couple, allowing new specializations in the household, eliminating redundant costs, and giving a stable legal guarantee of future life circumstances. In other words, married people make great customers.
Community banks can’t rewrite society—and can’t be asked to do so. But they can keep their eyes open. Bundling life coaching services and physical fitness programs with financial advising is probably a winning market strategy. Many financial services companies got their start as mutual aid societies for churches or other communities where this “holistic life planning” approach was normal. Modern banks may need to bring that model back.
Beyond this, banks should be aware of how long-term demographics may impact their community. Migration is volatile and won’t last forever. If local birth rates are low, then banks should plan for diminished market size 30 years down the road. (source)