Impact of Changing Demographics

It is known that nation has a relatively high birthrate compared to other developed nations in the world. This attributed to the increasing number of immigrants, who bear more children compared to the residents and their families have stayed in the United States for several generations. In 2014, the United States Census Bureau stated that there are 20 million children under 5 years living in the country, and more than half of this children were African-American, Latino, or Asian. It is also highlighted that the population white Americans will drop to 44 percent in 2060. The purpose of this essay is to discuss how the changing demographics impact the business and economic landscape in the United States. The declining rates of innovation and startups will also negatively affect the productivity growth of the nation.

Moreover, demographics will shape the aggregate consumption, investment, and saving decisions. There will be increased demand for healthcare services and housing, particularly for the aged population. These demographic shocks will influence the output and the cycle in businesses (Mester, 2017). Another major factor in the demographic trends in the United States is immigration. The business world will be affected because demography involves people, and people constitute the market. Therefore, businesses and marketers must closely assess the developments in the market. The changes in age, family structures, geographical population shifts, educational attainment, and enhanced diversity have direct implications on the marketing and business strategies. The existing demographic factors influence the buying power and spending habits of households and individuals. Income distribution is equally shifting as the middle class is shrinking and companies are optimizing their product for a two-tier market: the affluent and less affluent.