Boomers, Mexicans, and Trucking

Demographics are at the core of what we do here at Zeihan on Geopolitics. More than just a count of population, demographic data–often expressed as a pyramid-shaped graph–can deliver a wealth of information about a society. Is the country in question rapidly aging? Are they going to experience a labor or tax revenue shortage, or a windfall? Coupled with other information, a firm grasp of a demographic profile can help you easily start to put together a country’s geopolitical reality. 

Here in the United States, our demographic realities have long been dominated by the Baby Boomers. The largest generation in American history, they have had an outsized impact on the rapid social and economic transformation of the American post-War era. And as the Boomers enter mass retirement, their exit from the labor force is going to have a similar impact on the American economy.

But these impacts won’t be felt equally across the board. Cultural and generational differences mean that in certain fields–such as the trades–American Boomers occupy an outsized percentage of jobs. Society pushed Gen X and millennials toward higher education and away from things like blue-collar work. The United States was able to lean on immigrant labor, chiefly from Mexico, to fill gaps. But it was still mainly Mexican Boomers coming to do the work.

With the Baby Boomers aging out of the labor pool en masse, and with immigrant flows from Mexico unlikely to ever reach their heyday of the late 1990s and early aughts, significant pressures on the US labor market are here to stay. One of the industries most impacted? Trucking. And the reverberations of that reality are being felt across the entire US supply chain.

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The economic lockdowns in the wake of COVID-19 left many without jobs and additional tens of millions of people, including children, without reliable food. Feeding America works with food manufacturers and suppliers to provide meals for those in need and provides direct support to America’s food banks.

Food pantries are facing declining donations from grocery stores with stretched supply chains. At the same time, they are doing what they can to quickly scale their operations to meet demand. But they need donations – they need cash – to do so now.

Feeding America is a great way to help in difficult times.

The team at Zeihan on Geopolitics thanks you and hopes you continue to enjoy our work.

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Supply Chains No More: The Question of California

You’d be forgiven if you though the biggest challenges facing the US supply chain was its overreliance on the state of California. While some 40% of US containerized imports come through the ports of Los Angeles and Long Beach, the ports are not the problem. 

And while the cities of Los Angeles and Long Beach certainly haven’t been quick to come to the aid of their beleaguered–and admittedly quite advanced–port terminals, the problem is so much bigger than the administration of any one port complex, or city, or state. Even one as tremendously and tremendously afflicted as California.

Current supply chain woes aren’t just about goods getting to Southern California, or how efficiently Southern Californian dockworkers can get those goods in containers off of ships. It’s all ports, it’s all transport, and it’s about a cascading series of crises impacting not just how goods get to the US from China, but how we move goods from Savannah and Long Beach and Tacoma and Houston to Topeka and Louisville and Phoenix and Duluth.

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Please join us for our upcoming seminar tackling these issues and more. 

Scheduling concerns? No problem. Webinars will be recorded and shared along with presentation materials to all registrants to watch at their convenience. 

Part II: Supply Chains No More
Friday, November 19

And coming soon, 
Part III: The Face of Inflation
Wednesday, December 1

REGISTER FOR PART III: THE FACE OF INFLATION

Supply Chains No More: Semiconductors

The American economy faces shortages of every conceivable product, but few widgets have captured the public imagination as much as semiconductors. Ubiquitous and powerful, these little silicon bits are what separates the modern digital world from the rest of human history. We need them. Lots of them. In everything.

Unfortunately, manufacturing semiconductors isn’t nearly as easy as flipping a few switches. Each facility costs about $10 billion in funds, at least two years in time, and necessitates a small army of specially trained labor. Even worse, as our needs change, fab facilities must be retooled. Even if that could be done overnight — and it cannot — there’s a lengthy lead time between a fab beginning work and the first new chips coming out. Months. And that’s just to get the chips our the door. You still need to get them delivered to manufacturers who will put them into the components where we’ll use them: into flash drives, wiring harnesses, phones, microwaves, household appliances, televisions, computers, and so on. The months necessary to make the chips is just the beginning–they are only a part of completely separate, complex, and global supply and assembly chains.
 
And therein lies the rub. The long delay for getting a semiconductor supply system tuned just right is just the first thing that has gone wrong in our world of globalized manufacturing.
 
Join Peter Zeihan November 19 for Supply Chains No More, the second of a three-part series of seminar exploring the challenges facing the American and global economies.

REGISTER FOR SUPPLY CHAINS NO MORE

Also in this series:
 
Part I: Wither the Workforce
November 17

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And Part III: The Face of Inflation
December 1

Please Join Us: Wither the Workforce

Peter’s back from chatting with dozens of firms across the manufacturing, finance and agricultural space and one topic kept popping up: what’s up with COVID vaccine mandates? The answer — from the business community — might surprise you!

The impact of vaccine mandates is only one of a plethora of issues impacting the American workforce. Join us Wednesday, November 17 for Wither the Workforce, a wide-ranging discussion of everything from COVID to manufacturing trends to technology to security to demographics, all from the point of view of the labor markets — with a heavy emphasis on the workforce of the United States and those of America’s partners and competitors.

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Part I: Wither the Workforce is only the first of a three-part series on the life and times of current major economic trends. Also in this series,

Part II: Supply Chains No More
Friday, November 19

REGISTER FOR SUPPLY CHAINS NO MORE
 
And coming soon, 
Part III: The Face of Inflation
Wednesday, December 1

Part II: Supply Chains No More

Anyone try to buy anything recently? Like, anything?

Throughout northern Mexico, parking lots full of finished automobiles (that are just waiting for a few semiconductors) have become common. Year-on-year prices for used cars are up 25 percent — a hands-down record. New models of televisions and consumer electronics are simply not happening this year. If you haven’t finished your Christmas shopping already, then ha! It is probably too late.

Let’s make this about me for a moment:

  • Last May a jihadist dove attacked one of my windows. I immediately ordered a replacement pane, which still hasn’t arrived.
  • I installed a heating system over the summer, but the control module that enables me to turn the heat on has now been on backorder for four months.
  • The publication of my next book, The End of the World is Just the Beginning: Mapping the Collapse of Globalization, might be delayed because of difficulty importing the materials needed to produce paper.

There are any number of factors feeding into these problems: COVID complications, labor shortages, changing regulations, whipsawing demand patterns, container shortages. One that is a bit louder are port bottlenecks.

The issue is that most of America’s product imports come via container, and ports’ abilities to handle containers simply cannot ramp up to meet demand. Not that they can’t ramp up fast enough, they cannot ramp up at all. Every port specializes in specific sort of cargo, and when they are at 100% capacity, they are at 100% capacity. California’s regulatory and efficiency issues notwithstanding, if you don’t have the infrastructure in place, you don’t have the infrastructure in place.
 
The results are not simply bottlenecks at the ports, but backlogged shipments going back onto the ships as well as snaking through the entire road-and-rail system. Each problem has generated more which have merged together into an interlocking mess of meh. Crazy thing is, even if all of this could be magically fixed, we would still be facing supply shortages until at least mid-2023.
 
Join Peter Zeihan Wednesday, November 19 for the second in a three-part series on the here, now, and soon-to-be of the American and global economies. Part II: Supply Chains No More will focus exclusively on the products shortages plaguing us all.

REGISTER FOR SUPPLY CHAINS NO MORE

Also in this series:
 
Part I: Wither the Workforce
Wednesday, November 17

REGISTER FOR WITHER THE WORKFORCE
 
And coming soon, 
Part III: The Face of Inflation
Wednesday, December 1