Economist David Foot challenges conventional wisdom when he looks at population trends and tells us what he sees.
In the fall of 1988, David Foot, an economist with a reputation for contrary views on demographic trends, spoke at an Ontario Ministry of Tourism and Recreation planning meeting. Foot told the bureaucrats that with the aging of the dominant baby-boom generation, interest in participation sports was likely to decline in favour of less demanding pursuits such as walking and bird-watching.
One sceptical official asked what Foot thought of the future of downhill skiing. Unaware that the official had long been funding ski facilities with Wintario-lottery dollars, Foot quipped, “I’d say downhill skiing is headed downhill.”
An acrimonious discussion ensued, and that night Foot stayed up late matching Ontario population trends again participation rates by age for leisure activities. The next day he sent a memo to the ministry demonstrating that downhill skiing was one of the slowest growing of 20 activities surveyed.
Foot says his memo disappeared without a trace. But a year later the ministry asked Foot to produce a research paper on leisure trends. It showed such pursuits as bird-watching, sight-seeing and concertgoing growing at three to four times the rate of more strenuous activities such as skiing, skating and tennis.
Foot’s ideas are so unpopular with many provincial and municipal builders of hockey arenas and tennis courts that he has been called a dangerous thinker, but he is philosophical about that. He is used to initial rejection of his views, followed by growing acceptance when the demographic impact is finally felt.
“Five years from now,” he says, “people will understand. But by then we will have built too many hockey arenas and there will be too much municipal debt out there to service them. Instead, we could have turned all those old railway tracks into walking and cross-country-ski trails at a tenth of the cost. And the baby bloomers would have been much more likely to use them.”
A cheerful, bearded academic with ginger hair, spectacles and a noticeable Australian twang, Foot draws upon demography, the study of population trends, to reach sometimes startling conclusions.
In 1988 he told a forum on construction and real estate that the demand for downtown office space was about to collapse because labour-force growth would plummet from 3-1/4 percent a year in the 1970s to less than one percent in the ’90s. Challenged at the time, he was invited back in the fall of 1992 by an industry chastened by a surplus of office buildings, and the downfall of the Olympia & York and Campeau real-estate empires.
Waves of Boomers. Though Foot’s conclusions are not always what planners want to hear, he is much in demand by organizations as varied as the Canadian Bankers Association, the Ontario Public School Boards Association, the Canadian Institute of Actuaries, and companies such as Northern Telecom, London Life and Quaker Oats. They pay substantial fees to hear how his views may guide their planning.
Says Gordon R. Cunningham, president of London Life: “Knowing who our customers are and how their needs are changing, both today and tomorrow, is crucial to understanding the kind of marketing and sales expertise we will require going into the 21st century.”
While Foot welcomes the exposure he gets and uses the money to fund research, he doesn’t let it interfere with his teaching. In 1992, for the second time, he was named by University of Toronto undergraduates as the most effective teacher in the social sciences. He was also awarded a 3M Teaching Fellowship, one of ten university teachers selected across Canada for excellence and leadership in education.
“He was the best teacher I ever had,: says Randall Powley, a vice president and senior economist for the investment dealer ScotiaMcLeod.
Born in England and raised in Australia, David Foot took first-class honours in economics at the University of Western Australia, won a scholarship to Harvard and was awarded his Ph.D. in 1972 shortly after he had joined the University of Toronto as an assistant professor.
He firs applied demographics to public-policy analysis when he was asked to contribute a study to an Ontario commission on declining school enrollments. When he advised that school boards should plan for a drop in revenues from the province because the baby bloomers were moving out of school age, the commission’s report criticized him for venturing into a “dangerous area of economic forecasting.”
Instead of recommending cost savings, the commission urged that spending levels be maintained and more money be spent on buildings and programs.
His interest whetted, Foot took sabbatical leave in 1979 to study the relationship between demographics and the economy. What he saw was “wave after wave of baby bloomers entering the work force in the late ’70s and early ’80s, driving the unemployment rate up, pushing inflation down.”
Universities Unprepared. The key issue facing Canada, Foot soon decided, was an aging population. The country’s fertility rate had jumped sharply in the postwar years, peaking in 1959 at almost four children per woman. As a consequence, our baby boom – embracing children born between 1947 and 1966 – lasted longer and produced relatively more children than that of any other developed country except New Zealand. Since then, fertility has plunged, stabilizing in the late 1970s at 1.7 children, well below the replacement level.
Postwar increases in life expectancy have been no less dramatic – from 65 to 73 years for men and from 68 to almost 80 for women.
Foot concluded that when the nine million baby bloomers reached childbearing age, every sector of Canadian life would be affected. He began to apply his demographic projections to university enrollment, housing and similar social concerns.
In 1981, when Statistics Canada and the Science Council of Canada were predicting that the decline in school enrollments would be followed by a similar drop in the university level, Foot argued at a conference on university financing that they were wrong; they had erred by basing their projections on the 18-24 age group. In fact, he said, students were going to get older, and 25-plus group would become an increasingly important segment of the university population as baby bloomers entered graduate school or returned for further education.
Though published as part of the conference proceedings, Foot’s paper was ignored. But events proved him right. Overall full-time enrollment rose steadily in the years that followed: 467,309 in 1985 to 553,931 in 1991, with students 25 and over comprising nearly half of overall enrollment.
“The universities were totally unprepared,” says Foot. “Having delivered research to justify cuts in government grants, they now find themselves in a financial squeeze.”
In 1985 Foot turned his attention to the housing market at a time of rising concern about the shortage of rental housing. Vacancy rates were low, accommodation for low-income people was scarce and governments were trying to ease the pain with rent controls. In a study for Ontario’s Commission of Enquiry into Residential Tenancies, Foot argued that the problem was almost entirely one of demographics.
Impact on the Job. Typically, he said, people rent in their 20s and buy their first house at 34. Thus, the rental market had been flooded by baby bloomers who were now about to move out and purchase their own homes. The rental crisis would be replaced by a dramatic increase in demand for single-family housing.
Without careful planning, he warned in a 1986 Toronto Star article, “every Canadian’s dream of moving into his own house may well become a nightmare.”
Sure enough, in the late ’80s, apartment-vacancy rates were high and house prices soared in major cities. Many families found they needed two incomes to carry their mortgage, and not a few were left high and dry when prices slumped at the onset of the current recession.
Foot says apartment vacancies will remain high until the bloomers’ children – the “baby-boom echo” – reach their 20s at the turn of the century, so “rental housing will be a lousy investment for a number of years.” He also expects a sharp drop in house prices in the mid 1990s when the peak of the baby boom passes age 34. And you can forget about housing as an investment in the first decade of the next century, he says.
The passage of the baby bloomers, Foot believes, is having an equally dramatic impact on the world of work. Unlike the over-50s, who were relatively few in number, the baby bloomers have found promotion much harder to come by. Many have moved out of big companies to start their own enterprises, boosting the growth of small businesses and the service industry.
On-the-job frustration could be alleviated, Foot tells his corporate audiences, if business took more account of demographic change. Until 1980 the labour force looked like a pyramid, with few people at the top and large numbers of young people entering at the bottom. Then, with the baby bloomers moving into their 30s and 40s and the baby bust reducing the numbers of new entrants, the pyramid became a barrel, with too many people in the middle and not enough at the bottom. “That’s why we have to start talking about flattening the corporate structure.”
What should a flatter structure look like? Instead of 40 or more job classifications, Foot says, companies should have no more than six. “Everybody from janitor to president fits into those six levels.” But for a flatter corporate structure to work, it requires lifelong education and the re-emergence of the generalist.
“When you flatten the pyramid, you are encouraging less upward and more lateral mobility. But you can make lateral moves only if the company makes a major commitment to re-education and training. Senior managers don’t understand this and will not be successful until they do.”
Foot’s latest focus is on drug abuse. In june 1992 he presented a paper to the Learned Societies Conference at the University of Prince Edward Island, arguing that hard-drug use is going to become much less of a problem as baby bloomers move into middle age.
Foot is convinced this trend will have major implications for policing and for health-care costs later in the ’90s. But when he first hinted at his findings at a Metropolitan Toronto Police conference, he was told that he was out of touch with today’s realities.
By now Foot is well used to uphill battles in selling his ideas, and he rarely expects instant agreement. “If I can stimulate debate,” he says, “that’s what being an educator is about. I would hope that my research will form part of that debate, so that when the people responsible for public policy make a decision, it will be informed by an understanding of demographics.”
“Demographic trends are essentially long-term. You can ignore them this year. You can ignore them next year. But if you ignore them over five years, they’ll get you in the end.”