MONEY Macroeconomic trends

8 Surprising Economic Trends That Will Shape the Next Century

crowd of people
Douglas Mason—Getty Images

Here are the stories that will matter in the years ahead.

Forget monthly jobs reports, GDP releases, and quarterly earnings. As I see it, there are eight important economic stories worth tracking right now that could have a big impact in the coming decades.

1. The U.S. population age 30-44 declined by 3.8 million from 2002 to 2012. That cohort is now growing again. By 2023 there will be an estimated 5.8 million more Americans aged 30 to 44 than there are now, according to the Census Bureau. This is important, because this age group spends tons of money, buys lots of homes and cars, and start lots of new businesses.

2. U.S. companies have $2.1 trillion cash held abroad. Much of this is because we have an inane tax code that taxes foreign profits twice: Once in the country they’re earned in, and again when companies bring that money back to the United States. If Congress ends this rule and switches to a territorial tax system — in which countries can bring foreign-earned cash back to their home country without paying another layer of taxes, as every other developed country allows — there could be a flood of new dividends, buybacks, and investments in America. It’s huge, pent-up demand waiting to be spent.

3. U.S. infrastructure is in disastrous shape. Roads, bridges, dams, and other public infrastructure have been neglected for years. The American Society of Civil Engineers estimates that $3.6 trillion in new investment is needed by 2020 to bring the country’s infrastructure up to “good” condition. Will this happen soon? Of course not. This is Congress we’re talking about. But the good news is that this work must eventually be done. You can’t just let critical bridges and water structures fail and say, “Damn. That Brooklyn Bridge was nice while we had it.” Things will have to be repaired. Sooner rather than later would be smart, because we can borrow now for zero percent interest. But someday, it will happen. And it’ll be a huge boon to jobs and growth when it does.

4. The whole structure of modern business is changing. I’m not sure who said it first, but this quote has been floating around Twitter lately: “In 2015 Uber, the world’s largest taxi company owns no vehicles, Facebook the world’s most popular media owner creates no content, Alibaba, the most valuable retailer has no inventory, and Airbnb, the world’s largest accommodation provider owns no real estate.” Fundamental assumptions about what is needed to be a successful business have changed in just the last few years.

5. California is one of the most important agricultural states, growing 99% of the nation’s artichokes, 94% of broccoli, 95% of celery, 95% of garlic, 85% of lettuce, 95% of tomatoes, 73% of spinach, 73% of melons, 69% of carrots, 99% of almonds, 98% of pistachios, and 89% of berries (the list goes on). And the state is basically running out of water. Jay Famiglietti, senior water scientist at the NASA Jet Propulsion Laboratory, wrote last week: “Right now the state has only about one year of water supply left in its reservoirs, and our strategic backup supply, groundwater, is rapidly disappearing. California has no contingency plan for a persistent drought like this one (let alone a 20-plus-year megadrought), except, apparently, staying in emergency mode and praying for rain.” This could change rapidly in one good winter, but it could also turn into a quick tailwind on food prices. It could also be a huge boost for desalination companies.

6. New home construction will probably need to rise 40% from current levels to keep up with long-term household formation. We’re now building about 1 million new homes a year. That will likely have to rise to an average of 1.4 million per year, which combines Harvard’s Joint Center for Housing Studies’ projection of 1.2 million new households being formed each year and an annual average of 200,000 homes being lost to natural disaster or torn down. This is important because new home construction is, historically, one of the top drivers of economic growth.

7. American households have the lowest debt burden in more than three decades. And the largest portion of household debt is mortgages, most of which are fixed-rate. So when people ask, “What’s going to happen to debt burdens when interest rates rise?”, the answer is “Probably not that much.”

8. America has some of the best demographics among major economies. Between 2012 and 2050, America’s working-age population (those ages 15-64) is projected to rise by 47 million. China’s working-age population is set to shrink by 200 million, Russia’s to fall by 34 million, Japan’s by 27 million, Germany’s by 13 million, and France’s by 1 million. People worry about the impact of retiring U.S. baby boomers, but the truth is we have favorable demographics other countries can’t even dream about. This is massively overlooked and underappreciated.

There’s a lot more important stuff going on, of course. And the biggest news story of the next 20 years is almost certainly something that nobody is talking about today. But if I had to bet on eight big trends that will very likely make a difference, these would be them.

For more:

TIME public health

5 Ways to Celebrate World Water Day

water
Getty Images

A holiday for H2O

Sunday is World Water Day, a United Nations initiative to celebrate clean water and bring attention to those who don’t have enough of it. A new report released ahead of World Water Day warns about a looming shortage, and centers on this year’s theme: water and sustainable development.

Here are five ways to celebrate World Water Day

Learn about poop water

First charcoal juice becomes a thing, and now poop water? Hey, Bill Gates drinks it—thanks to a new machine called the Omniprocessor that literally transforms waste into water through a steam engine. On his blog, Gates writes about drinking a “delicious” fresh glass of it and marvels at the possibilities to improve sanitation in low-income countries. “The processor wouldn’t just keep human waste out of the drinking water; it would turn waste into a commodity with real value in the marketplace,” Gates writes.

Take a break from meat

Showering and hydration are hardly your main uses of water—but food is. The average American uses 7,500 liters of water each day, according to the U.N. If you’re eating meat, your water usage shoots way up; a steak dinner for two requires 15,000 liters of water for the meat alone. Eating more meat and dairy has been the single greatest factor for water consumption in the past 30 years, says the group—so going vegetarian, even temporarily, can make a difference.

Wash your hands the right way

Only 5% of Americans do, according to a study of men using public restrooms. (If you need a refresher on proper technique, you should use soap and water and wash for at least 15 seconds.) Sounds gross—and it is a public health hazard, according to UNICEF, organizers of Global Handwashing Day, another water-related holiday worth celebrating. “Handwashing with soap prevents disease in a more straightforward and cost-effective way than any single vaccine,” supporter UNICEF writes.

Support a future female farmer

Most of the world’s hungry are women, says the U.N.’s new report, and most don’t own land—or even have time to make an income, since 25% of their day is spent collecting drinking water. “With equal access to resources and knowledge, female farmers, who account for the majority of all subsistence farmers, could produce enough additional food to reduce the number of the world’s hungry by 150 million,” the report says. Investing in water and sanitation actually helps improve equality, which helps stimulate the economy—every dollar invested yields between $5-28, the UN estimates.

Give better water to the world

A new report from WaterAid America found that one in five babies born in the developing world dies during its first month of life because of a lack of clean water. And 35% of facilities in middle- and lower-income countries didn’t have water and soap for hand-washing, another report from the World Health Organization found.

John Green, author of The Fault In Our Stars, recently teamed up with Bill Gates to raise money for clean, safe water in Ethiopia. You can donate to water.org here.

TIME Environment

UN Report Warns of Serious Water Shortages Within 15 Years

INDIA-UN-ENVIRONMENT-WATER
Manjunath Kiran—AFP/Getty Images Residents in Bangalore wait to collect drinking water in plastic pots for their households on March 18, 2015.

If we continue on our current trajectory, warns the report, we'll only have 60% of the water we need in 2030

The world will only have 60% of the water it needs by 2030 without significant global policy change, according to a new report from the U.N.

While countries like India are rapidly depleting their groundwater, rainfall patterns around the world are becoming more unpredictable due to global warming, meaning there will be less water in reserves. Meanwhile, as the population increases, so does demand for potable water, snowballing to a massive problem for our waterways in 15 years’ time.

The report suggests several changes of course that nations can take, from increasing water prices to finding new ways of recycling waste water.

TIME Environment

California Announces $1 Billion Emergency Drought Relief Package

California Drought-Field Poll
Rich Pedroncelli—AP Houseboats sit in the drought lowered waters of Oroville Lake, near Oroville, Calif. in 2014.

The move comes days after new rules cracking down on lawn watering and tap water at restaurants

As if Californians needed another reminder that their state is dangerously hot and dry, they got it on March 15 when more than 30 runners at the Los Angeles marathon were hospitalized due to record high temperatures. The late winter heat wave — the mercury climbed above 90 in the city and surrounding areas — offered stark notice that, four years into a severe drought, the Golden State remains desperately parched with little relief in sight.

Gov. Jerry Brown and a bipartisan group of state lawmakers attempted to deliver some form of it Thursday when they announced a $1 billion plan to provide immediate relief and stave off future problems.

“This is a struggle,” Brown reportedly said during a press conference announcing the package. “Something we’re going to have to live with. For how long, we’re not sure.”

While the legislation includes millions of dollars in emergency aid, it also earmarks $660 million for flood prevention. Brown explained that flood control and drought relief were of a piece, according to the Los Angeles Times, describing them as “extreme weather events” related to climate change.

The new measures come two days after state officials voted March 17 to enact some of the broadest and strictest statewide water limits in California history. Outdoor lawn and landscape watering, which accounts for about half of all consumption in urban areas, will be limited to two days per week.

“It’s the number one thing that could be done and it’s easy,” says Jay Famiglietti, the senior water scientist at NASA’s Jet Propulsion Laboratory in Southern California.

The water board regulations will also ban residents from irrigating during rainstorms and for two days afterward. And restaurants will be permitted to offer tap water to patrons only upon request.

Given how little the new water regulations ask of residents, it’s easy to wonder why they weren’t enacted earlier. With surface water at dangerously low levels and non-renewable groundwater being depleted at a rapid pace, Famiglietti warned in a recent Los Angeles Times op-ed that the state must immediately ration water before California’s supply is gone completely.

“Because of the severity of the situation, I do think the public is ready for it,” Famiglietti says.

Several polls appear to back him up. An October 2014 survey found that Californians are just as worried about the drought as they are about the economy. Ninety-four percent of state residents polled in February said they consider the drought to be “serious.” Still, Californians seem unwilling to voluntarily curb their water consumption as much as officials would like. In January 2014, Brown urged Californians to reduce their water use by 20 percent. Statewide usage this past in January was just 9 percent less than the same month in 2013.

“Even though it was historically dry, it was still raining,” says Sarah Rose, CEO of the California League of Conservation Voters. “People see the rain and think they can go back to their old habits. We’re going to have to create new habits.”

While experts call the new water board rules a step in the right direction, they worry that more drastic, but necessary, measures like rationing and water price increases still haven’t been proposed.

“No one wants to be responsible for delivering the hard news that people have to significantly change their behavior,” says Charles Stringer, chair of the regional water board in Southern California. “We’re trying to get where we need to go without too much pain and sacrifice. But what the water experts and policy makers are saying with increasing urgency is that’s not possible.”

New regulations come with their own problems of how to enforce them. “There’s not going to be the manpower to do it,” says Famiglietti. A recent investigation by the Associated Press found that after California authorized emergency drought measures last summer to allow local communities to issue $500 fines for excessive water use, few residents actually got tickets.

In the meantime, officials are hoping public information campaigns might be more effective. One water district in Northern California has adopted “Brown is the New Green” as a new motto, encouraging residents to let their lawns die to conserve water. “People should feel really proud of having a brown lawn,” says Famiglietti.

TIME Innovation

Five Best Ideas of the Day: March 18

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. What does the world’s indifference to Syria’s horror tell us about ourselves?

By Barry Malone at Al Jazeera English on Medium

2. California has about one year of water left.

By Jay Famiglietti in the Los Angeles Times

3. Traditional democratic institutions are failing. It’s time for an upgrade.

By John Boik, Lorenzo Fioramonti, and Gary Milante in Foreign Policy

4. For the first time in four decades, the global economy grew last year, but carbon emissions didn’t. That’s huge.

By Brad Plumer in Vox

5. Can we build an Internet that includes the hearing impaired?

By Steve Friess in Time

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Vanuatu

Relief Groups Rush Aid to Vanuatu’s Cyclone-Stricken Islands

(PORT VILA, VANUATU) — Relief workers rushed to deliver desperately needed food and water Wednesday to survivors living on Vanuatu’s outer islands, after a monstrous cyclone wiped out entire villages and flattened vast swathes of the South Pacific nation’s landscape.

Teams of aid workers and government officials were planning to send a boat packed with supplies to hard-hit Tanna Island, where aerial assessments showed more than 80 percent of homes or buildings had been partially or completely destroyed by Cyclone Pam.

Lack of food was a growing worry for those who survived the storm, which packed winds of 270 kilometers (168 miles) per hour when it struck Saturday.

“Everyone in Tanna and other islands in the south, they really live subsistence lives, so they grow what they need for a short period. … And the reality is that much of that would have been washed away by this storm,” said Tom Perry, spokesman for CARE Australia. “That’s a grave concern because we desperately need to get food to people soon.”

Flyover crews who surveyed the outer islands saw a flattened landscape and widespread destruction, with survivors below trying to signal them for help, said Colin Collett van Rooyen, Vanuatu director for aid group Oxfam.

Teams of aid workers and government officials carrying medical and sanitation supplies, water, food and shelter equipment finally managed to land on Tanna and neighboring Erromango Island on Tuesday, after being stymied in their efforts for days by poor weather and a breakdown in the nation’s communications networks. The two islands were directly in the path of the storm.

An aerial assessment showed extensive damage on Erromango, with communities ranging from 70 percent to 100 percent destroyed on the archipelago’s fourth-largest island. On other islands, Collett van Rooyen said plane crews saw people had made big, white “H” marks on the ground in multiple villages, and people on Tongoa island flashed mirrors to attract attention.

Radio and telephone communications with the outer islands were just beginning to be restored, but remained patchy four days after Cyclone Pam tore through the islands.

Meanwhile, fears of a measles outbreak prompted aid workers to launch an emergency vaccination drive for children across Vanuatu, which has low rates of immunization and already suffered one outbreak of the disease earlier this month. Teams were traveling to evacuation centers and other storm-ravaged areas around Port Vila to vaccinate children, provide Vitamin A and hand out bed nets to help stave off mosquito-borne malaria, according to UNICEF.

The U.N. Office for the Coordination of Humanitarian Affairs reported that 11 people were confirmed dead, including five on Tanna, lowering their earlier report of 24 casualties after realizing some of the victims had been counted more than once. Officials with the National Disaster Management Office said they had no accurate figures on how many were dead, and aid agencies reported varying numbers.

The confusion reflects the difficulty of handling a disaster that struck whole communities on remote islands with a near-total communications blackout.

“Vanuatu is a challenging place at the best of times, in the sense of getting around and logistics,” Perry said. “So a situation like this is pretty testing.”

Baldwin Lonsdale, Vanuatu’s president, returned to his country on Tuesday night from Japan, where had been attending a U.N. disaster conference when the cyclone struck.

“I trust the people of Vanuatu. I trust my government. I trust the people that they will stand united together as a nation and to rebuild the nation,” he said.

Poor weather and communications issues have hampered relief workers efforts to reach the outer islands for days. Most of the islands have no airports and those that do have only small landing strips that are tricky for large supply planes to navigate. On the main island of Efate, bridges were down outside Port Vila, impeding vehicle traffic.

“There are over 80 islands that make up Vanuatu and on a good, sunny day outside of cyclone season it’s difficult to get to many of them,” said Collett van Rooyen of Oxfam.

The destruction on Tanna was significantly worse than in the nation’s capital of Port Vila, where Pam destroyed or damaged 90 percent of the buildings, Perry said.

“The airport was badly damaged, the hospital was badly damaged but still functioning … there’s one doctor there at the moment,” he said. “It’s obviously a pretty trying situation.”

Vanuatu has a population of 267,000 people. About 47,000 people live in the capital.

The U.N. Office for the Coordination of Humanitarian Affairs said 3,300 people were sheltering in dozens of evacuation centers on the main island of Efate and in the provinces of Torba and Penama.

___

Associated Press writer Kristen Gelineau in Sydney contributed to this report.

TIME public health

Nearly Half a Million Babies Die From Poor Hygiene

MSF Works To Reduce Maternal Mortality In Sierra Leone
Lam Yik Fei—Getty Images Doctors give emergency treatment to a new born baby at the Gondama Referral Centre on March 9, 2014 in Bo, Sierra Leone.

Two new reports show a lack of rudimentary sanitation in the developing world

Nearly half a million babies die every year from being raised in unhygienic conditions, according to a new report.

The briefing, from the non-profit organization WaterAid America, reveals that in the developing world one out of every five babies dies during their first month of life, but having clean water to bathe in could likely have prevented many of those deaths.

According to the data, babies born in Sub-Saharan Africa are 30 times more likely to contract an infection during their first month compared to babies in the developed world. In Sierra Leone, one out of every 21 women will have a child die from an infection during its first month of life. In the United States, that rate is one in 2,958 women.

One study the researchers reviewed showed that among 63 healthcare facilities with maternity units in Southern Nigeria, only one in five had soap near or in the delivery room.

The new WaterAid report comes on the same day the World Health Organization (WHO) released its own report on water, sanitation and hygiene. The WHO report, which looked at facilities in middle and lower income countries, shows that 38% don’t have access to an adequate water source, 19% don’t have sanitary enough conditions and 35% do not have water and soap for hand-washing.

That’s not good enough, WaterAid and the WHO both agree in their reports. When national and international governments develop plans to tackle public health problems like malnutrition, childhood diseases and newborn deaths, they need to also address basic hygiene services, the authors of the WaterAid report conclude.

MONEY Travel

$5 Bottled Water at Airport Inspires a Lawsuit

Water near a checked-baggage inspection station at Terminal One at Los Angeles International Airport.
Reed Saxon—AP Water near a checked-baggage inspection station at Terminal One at Los Angeles International Airport.

Everything is overpriced at the airport. But a new lawsuit alleges that gouging travelers to the tune of $5 for a bottle of water is taking things too far.

Travelers might rightfully feel that airport stores charging an outrageous $5 for bottled water is just plain wrong. A new lawsuit raises just this issue, but surprisingly, it hasn’t been filed by a traveler coalition or group of consumer advocates. Instead, the squabble involves two retailers squaring off at Los Angeles International Airport (LAX).

The New Jersey-based Hudson Group is under contract to run two boutique Kitson stores at LAX. Recently, Kitson filed a lawsuit after Hudson allegedly refused to sell bottled water at a price of $2.55 per liter—instead charging a “hugely” inflated price of nearly $5 per bottle.

“Water is one of the most basic necessities for travelers and Hudson is taking advantage of the post-9-11 airport restrictions” by inflating water prices, Kitson attorney Steven Bledsoe explained to the Associated Press.

The fight isn’t over the price of bottled water alone. Kitson has been trying to get out its licensing contract with Hudson for months, if not longer, and both sides are accusing the other of breach of contract. A few weeks ago, according to the Los Angeles Times, Kitson accused Hudson of a “candy-gate” scandal, claiming that Hudson put new wrappers with later expiration on candy bars—and that it overcharged for the stale chocolate to boot. More recently, Kitson says that it sought to stock shelves at the airport with SmartWater for $2.55 per liter, but the Hudson Group refused. Hudson, which operates other stores at the airport, charges $4 to $5 for bottled water at LAX.

Just how much of a rip-off is that? In a 2009 study concerning airport pricing, all major American airports charged $2.60 or less for bottled water—and the prices then were considered exploitive. Some airports, such as Dallas-Fort Worth, cap prices for airport concessions at 10% above street level rates. That equated to $2.25 for a 20-oz. bottle in 2009; at the time, the same bottle cost “only” $1.84 at LAX.

At $3, the price of a bottle of water purchased aboard Spirit Airlines is considered outrageous, but that’s probably more to do with the fact that an airline charges for water at all, rather than the price charged. Prices at LAX are roughly in line with pro sports venues, which are also renowned for gouging customers. Levi’s Stadium, home of the San Francisco 49ers, charges an absurd $5.75 for bottled water.

In any event, Hudson maintains that the two LAX-location Kitson stores will close at the end of March, while Kitson says there is no such agreement and that their contract doesn’t end then. What’s more, Hudson representatives say that if travelers are worried about being ripped off, it’s actually Kitson that should concern them. “Kitson is known for selling pricey items in its high end boutiques,” Hudson attorney Timmons said in a statement. “Anyone who thinks that Kitson is really motivated here by an altruistic concern over how much consumers are paying for water at LAX has either never shopped at a Kitson store or is really naive.”

Oh, and if you’re really concerned about how much water costs at LAX or any airport, just bring a refillable bottle, or even just an empty plastic bottle. Then, once you’re beyond the security gates, where you can’t cross through with liquids, find the nearest water fountain and fill up.

TIME Innovation

Five Best Ideas of the Day: March 3

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. What if a microbe could solve the fracking wastewater problem, all while generating additional clean energy?

By Michael Casey at CBS News

2. Thank your dog: A new paper credits domesticated wolves with giving humans the evolutionary advantage over Neanderthals 40,000 years ago.

By Robin McKie in the Guardian

3. With all their innovation, apps on tablets can’t give kids the experience of building with blocks.

By Eric Westervelt at National Public Radio

4. This device could revolutionize childbirth. It was created by a car mechanic.

By Ed Stocker in GlobalPost

5. The old models for statecraft don’t account for the power of networked communications. Welcome to Netpolitik.

By Charlie Firestone and Leshuo Dong in the Aspen Journal of Ideas

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME space

ISS Astronauts Do Their Third Spacewalk in Eight Days

They were helping to set up antenna that future space taxis will use to dock with the ISS

Two U.S. astronauts left the International Space Station on Sunday for a spacewalk — the third time they had left the orbiting station in just over a week.

This time, station commander Barry “Butch” Wilmore and flight engineer Terry Virts were preparing berthing docks for space taxis being developed by Boeing and SpaceX, reports Reuters.

Their job was to rig more than 122 meters of cables for two sets of antennas that the new vehicles will use as navigation tools before they dock at the station. The mission was completed after just 5.5 hours, less than the seven hours originally planned on.

After the spacewalk, Virts found a small amount of water inside his helmet but said it didn’t pose a risk to his safety.

[Reuters]

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