The world's demographics are making an "unprecedented shift," and it will have an enormous impact on the world.

That's not a new discovery, but the subject is being explored in detail by HSBC economist James Pomeroy in an immense report sent to clients this week.

The note explores some of the massive changes coming to the global population over not just the next 50 or 100 years, but the next 10. Unlike many economic forecasts, predictions of what the size of the world's workforce will be like in a decade are pretty predictable, since the future workers have already been born.

Here's a snippet from the report:

Demographics have long been a key determinant of potential growth rates, but the change in the global population over the next few years is unprecedented. Japan's population started to shrink in the mid-1990s and Germany's started shrinking around the year 2000, but the world's most populous country, China, is now seeing its working-age population shrink for the first time.

Though the overall global population will continue to grow for some time yet, the growth of the working-age population is slowing down pretty much everywhere.

That's relevant for a bundle of reasons. For starters, it means that around the world there will be fewer workers to support a growing number of retirees. But it also has some economists expecting significant pressure on wages. If employers have to fight for a group of workers that is growing more slowly, or even declining, they will need to encourage people to move, and their labour will be more valuable.

The demographic change is a two-sided coin. If the upside is wage growth, then the downside is having to deal with a lower level of economic growth for an extremely prolonged period. Some countries, like Japan, Russia, and parts of Europe, have already entered the stage that the rest of the world is going into — and they've struggled with it.

In Japan, slowing economic growth has made the county's ever-expanding pile of public debt more and more difficult to deal with, and the working-age population has already declined by 11.1% in the past 20 years.

Here's another snippet from the report's author:

Smaller populations mean less demand and less potential output. More retirees relative to the number of working-age people means more fiscal pressure: greater expenditure on healthcare and less tax income. Globally, although working-age populations are still growing, we would expect global potential growth to be 0.6ppt lower per year over the next decade compared with the past decade given these demographic changes. Not great news for heavily indebted economies.

Whatever the effects are, this is one forecast that you can rely on — global demographics are shifting, and there's no way to go back.

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