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Table A: this general breakdown of Bermuda’s population shows the difference in numbers associated to each generation. Note that percentages do not sum to 100 as the population below the age of three has been excluded from the generational groupings (Source: Bermuda 2016 Population and Housing Census Report and Anchor Investment Management Ltd)

Populism is reverberating throughout the world. It manifests via polarised political outcomes; trade skirmishes or immigration backlash and it affects nearly all regions. In fact, demographically we are likely entering a period of heightened tensions revolving around key generational differences. This thesis is based on data coming out of the recent 2016 Census: The great intergenerational shift for Bermuda appears to be under way.

One could argue that a major aspect of populism develops from intergenerational differences and the shift that naturally occurs due to a change in the demographic profile of a nation over time. When one generation takes over from another in terms of size and influence, social, political and economic norms shift. Much change is simply based on those generations personal experiences.

For example, millennials (people born in the early 1980s through the 1990s) are different. I don’t mean that in a bad way, it’s just that the way they view the world and their preferences are often at odds or very different than those of other generations. The Pew Research Centre has a series of research reports on millennials. Here are some highlights:

• Millennials are the largest generation in the US labour force.

• Millennials are expected to overtake baby boomers in population in the US in 2019

• More millennial households are in poverty than households headed by any other generation.

• Home ownership has declined most among younger households and millennials are significantly less likely to own their home than prior generations of young adults. They are most likely to also live at home for longer stretches of time.

• The Gen X and millennials tend to be more liberal in political leanings versus the silent generation and the baby boomers who are more conservative in political opinion.

• A study by Everbrite-Harris found that “More than three in four millennials (78 per cent) would choose to spend money on a desirable experience or event over buying something desirable”. Millennials appear to be increasingly focused on experiences in life rather than materialistic goods. Bermuda’s tourism strategy to attract millennials with experiences seems well thought out in this regard.

It would be incorrect to automatically assume that Bermudian millennials are the same, but it may be fair to at least consider that much of the research done on millennials in the US is similar for Bermuda.

Notable exceptions on generational composition may be seen when we look at the actual numbers from the recent census. Take a look at Table A, the “Generation Table”, which divides Bermuda’s overall population as at the 2016 Census date into various generational groupings.

Some overall commentary on this breakdown:

• The millennial group in Bermuda does not feature as prominently as in the US and is not as significant in size.

• Generation X appears to be a dominant group in the future for Bermuda in terms of the future labour force (assuming immaterial immigration trends and consistency).

• If one views the political and social opinions between Generation X and the millennials to be more aligned versus the combined opinions of the baby boomers and the “silent generation”, the Gen X/millennial population holds a larger dominance and in the future and will increasingly be more relevant.

With over 13,000 non-Bermudians, however, this generational breakdown may be deceiving. In Table B we have taken the Bermudian population and created the same generational breakdown.

There are obviously some stark differences. Here are some highlights:

• In terms of the Bermudian population, it appears the millennial generation is currently the least significant in terms of size. This is likely due to the larger scale of emigration in this group and the island’s declining birthrate over time. Emigration statistics support this to some degree — 54 per cent of the emigrants from 2010 to 2016 were aged 15 to 29.

• In the next election, the political leanings of the silent generation and the baby-boomers will be a significant consideration, but subsequent political contests will be more extensively determined by the youth in Bermuda. In fact, the Gen Z/millennial cohort will likely be a larger voting mass than the baby boomers ten years hence.

• The census continues to highlight that Bermuda is becoming a very aged population. The total number of Bermudian persons 65 years and over is now 20 per cent.

• In relation to other generational groups, the millennials and Gen X groups have a high proportion of non-Bermudians. This is not surprising as this would be the logical groupings for most guest/foreign workers. This does, however, highlight that the labour forces view on many issues may diverge significantly from local opinions and we do see this in many contentious disagreements over things such as immigration.

We will look at one other generational breakdown to consider. It attempts, at least in one simply way, to decide if this generation is better off by comparing real median annual gross incomes from one’s main job from 2000 to 2016.

A few things to note from these figures, as shown in Table C:

• Although median main job incomes in general have seen no real growth and in fact have not kept pace with Bermudian inflation, the younger cohort of workers (millennials) appear much worse off. Every family hopes their children will be better off and that subsequent generations “have it better than them” — this dream may be fading. It’s also worth noting that as a major workforce group, the millennials show an unemployment rate of about 8 per cent, much higher than that of the other major generational workforce groups which register unemployment of about 5 per cent.

• While gross income is already lower in real terms for millennials, their “net” income is likely to be even lower still. Payroll taxes, social security and healthcare deductions have only increased over this 16-year period. Healthcare, in fact has jumped multiples of the overall CPI inflation rate and its draw from salaries is much higher than prior generations earnings. So, in many cases the gross figure underestimates the plight of the millennials.

• The younger millennials are really feeling the pinch. I suspect, given the skew to the lower age of this group, that the younger Bermudians with limited or no secondary education are disproportionately affected. It’s evident from the table that the millennial generation is at risk of becoming a lost generation when it comes to income.

• The data is gross in aggregate and therefore further research is needed to dig into the details as the make-up of positions and occupation could be skewing these figures. It may in fact be that recent emigration/immigration trends have pushed some higher-level entry jobs off-island and thus there is a negative mix shift. Emigration trends point to a large number of Bermuda’s youth leaving Bermuda, possibly due to better employment opportunities.

Although impossible to predict with certainty how Bermuda’s social landscape evolves over the next decade we would suggest some major shifts are likely. Our assumptions include no significant generational shift in net migration and life expectancy around 85. In general, we would expect increased intergenerational conflict that naturally occurs as the older generations fade in demographic, political and social influence and the newer younger group ascend in dominance with a much different background and set of opinions. More specifically we would not be surprised to see the following:

• Religion (a less popular institution among millennials) becomes a smaller aspect of social life and less influential in dictating social policy in general.

• In line with this, a shift to a more inclusive society that focuses on more liberal tenants as opposed to conservative opinions.

• A push back from younger generations to support the current pension and healthcare schemes that are currently being propagated. If real incomes do not accelerate for this group there will be even more extensive dissent. Bermuda’s denominator problem is only accelerating as Bermuda continues to age, the dependency ratio ticks up and the much smaller generations continue to pay for this burden. As a note, the median age is now 44 (up from 41 in 2010) and the old age dependency ratio has jumped from 19 to 25 (or now 25 older dependents per hundred persons 15 to 64)

• If inflation in Bermuda continues to persist at levels exceeding wage growth and those seen in neighbouring economies, further youth emigration may persist with a growing number of millennials permanently leaving Bermuda and a growing number of Generation Z remaining abroad for employment opportunities. An unsurprising outcome of this may be that support for independence could fade as an independent Bermuda does not offer an “escape valve” to the United Kingdom for future employment opportunities.

• A more open and inclusive immigration environment is likely to evolve. The Pew Research Centre has found “younger people are far more likely than their elders to take an inclusive view of what it takes for people to be truly considered ‘one of us’ — whether the measure is being born in their country, sharing local customs and traditions or being Christian.” As a result, it is likely that over time immigration restrictions and even nationality considerations will become more liberal and accepting. Whether this happens in time to help alleviate the declining population is another matter altogether.

Major intergenerational change in Bermuda is just getting started and this will require the consideration of social shifts when one ponders economic analysis going forward on the island. If not arrested and changed, the declining and ageing population will increasingly become a drag on economic growth into the future. To alleviate this, Bermuda needs to focus on bringing its youth back by creating more entry-level jobs. It also needs to focus on policies to encourage generational fairness. Policy changes should focus on reducing the younger generations burden of escalating liabilities (shifting the cost to those more responsible if possible) and a focus on lowering living costs which can disproportionately affect the islands youth.


• “Millennials: Fueling the Experience Economy” — Everbrite-Harris. Link: https://tinyurl.com/hj7jrr7

• The Changing Economics and Demographics of Young Adulthood: 1975—2016. https://tinyurl.com/kr3b4zc

• “Defining generations: Where millennials end and post-millennials begin”, by Michael Dimock, Pew Research Centre. https://tinyurl.com/y95tdxbk

• “Millennials projected to overtake baby boomers as America’s largest generation”, By Richard Fry, Pew Research Centre. https://tinyurl.com/y84uqjfh

• “Millennials”, by Zara Kessler, Bloomberg View. https://tinyurl.com/ycphajs4

• “Five facts about Millennial households,” by Richard Fry, Pew Research Centre. https://tinyurl.com/y8g63p6n

• “It’s becoming more common for young adults to live at home — and for longer stretches”, by Ricarge Fry, Pew Research Centre. https://tinyurl.com/ydhesdjf

• “A wider partisan and ideological gap between younger, older generations”, by Shiva Maniam and Samantha Smith, Pew Research Centre. https://tinyurl.com/mn7g7me

• “Millennials in many countries are more open than their elders on questions of national identity”, by Bruce Stokes, Pew Research Centre. https://tinyurl.com/zh58lrn

• “2016 Population and Housing Census Report” Government of Bermuda Department of Statistics. https://tinyurl.com/y92utyok

Nathan Kowalski CPA, CA, CFA, CIM is the Chief Financial Officer of Anchor Investment Management Ltd. and can be contacted at nkowalski@anchor.bm

• Disclaimer: The sole responsibility for the content of this article, lies with the author. It does not necessarily reflect the opinion, policy or position of Anchor Investment Management Ltd. The content of this article is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy or for any other purpose. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by the author to be reliable. They are not necessarily all-inclusive, are not guaranteed as to accuracy and are current only at the time written. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. Readers should consult their professional financial advisers prior to any investment decision. The author may own securities discussed in this article. Index performance is shown for illustrative purposes only. You cannot invest directly in an index. The author respects the intellectual property rights of others. Trade mark or copyright claims should be directed to the author by e-mail

Table B: this is the breakdown of the Bermudian population showing the difference n numbers associated to each generation. Note that percentages do not sum to 100 as the population below the age of three has been excluded from the generational groupings (Source: Bermuda 2016 Population and Housing Census Report and Anchor Investment Management Ltd)
Table C: the working population from 16 years upwards by median annual gross income from main job, comparison between 2000 and 2016 with adjustment for inflation (Source: Bermuda Population and Housing Censuses 2016 and 200, Anchor Investment Management Ltd and Bermuda Department of Statistics)