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Baby Bust / Netflix Slides / Going Back

Low fertility rates set off a chain of economic events. Fewer young people leads to a smaller workforce, hitting tax receipts, pensions, and healthcare contributions. An economy with a labour shortage problem may experience higher labour costs, declining productivity and a lower standard of living.

The number of births in advanced economies has largely rebounded to levels before the coronavirus pandemic, a Financial Times analysis shows, a recovery that experts say was partly because of stimulus policies deployed to mitigate the economic impact of the crisis. Births began to fall sharply in late 2020 after COVID took hold and people were confined to their homes in lockdown, worsening an already perilous demographic trend of population decline in wealthy nations. The trend mirrored drops during the 1918 flu pandemic, the Great Depression and the global financial crisis in 2008. But an analysis of national data shows a rapid rebound in most developed countries. “The short-term decline in births observed in many countries is consistent with other historical crises . . . but in the case of Covid-19, these declines have been more shortlived,” the UN said. This is largely because of government spending and efforts to make and distribute COVID vaccines. The economic uncertainty caused by the pandemic was “addressed by the stimulus packages and the expansionary reactions of central banks”, said Klaus Prettner, professor of economics at Vienna University of Economics and Business.

There is a ticking demographic timebomb waiting for most developed economies; pandemic-era stimulus packages may have given policymakers a glimpse of how to defuse that it.

Netflix Slides

When an industry leader stumbles, plenty of others are there to take its place. But in the case of Netflix’s recent issues, it could be an omen for the streaming industry rather than an opening. Netflix said this week that it lost more subscribers than it signed up in the first three months of the year, reversing a decade of steady growth. The company’s shares nose-dived 35 per cent on Wednesday while it lost about 50 billion USD in market capitalization. The pain was shared across the industry as the stock of companies like Disney, Warner Bros., Discovery, and Paramount also declined.

People are asking questions that will have to be answered in the coming months as more traditional media companies race toward subscription businesses largely modelled after what Netflix created. Is there such a thing as too many streaming options? How many people are really willing to pay for them? And could this business be less profitable and far less reliable than what the industry has been doing for years?

Our bet? The industry is super-saturated. As it stands, the plurality of streaming services ends up being traditional cable with extra steps. The reckoning will come, and Netflix’s stumble means that the streaming wars are about to enter their next chapter.

The Cost of Going Back

With so many workers finally going back to the office, many of them are facing sticker shock. All of those expenses they were able to cut due to working from home are back with a vengeance. Part of this has to do with the simple fact that people got used to not paying for transit, gas, restaurants, coffee, etc. The other main issue is inflation; the prices of everything have gone up. This double-whammy means that workers are finding their paychecks do not go as far as they once did.

What does this mean for employers? There is going to be more pressure to pay their employees more to offset costs. At a minimum, employees will expect greater benefits. It is one thing to remove the comforts of working from home; it is an entirely different when there are added burdens that weren’t there pre-pandemic.