Another major problem is the rapidly growing number of Americans who are either uninsured or underinsured.  As the chart below shows, while some of it can be attributed to the explosive growth in the cost of health insurance, it is also related to the falling incomes that make it difficult to carry coverage.  The bursting of the bubble, outsourcing of jobs/creation of only low-paying jobs, and poor public policy are responsible for the current situation.

• Lower consumer spending (eventually).  Americans have not cut as much as they should have primarily because they have benefited from rising real estate assets.
• A less healthy population.
• Major lifestyle changes

Impact on businesses

There is no part of the economy that is going to be left untouched by these demographic changes.  Here are a few thoughts for business leaders:

• Consumers will increasingly seek lower priced products - these can only be provided by lowering the cost of doing business.  While lower American wages will help businesses somewhat, executives have to find other ways to cut costs to compete with overseas suppliers.  In other words, take a look at your supply chain and analyze how you can cut costs.
• Consumers will also be more willing to accept watered-down version of offerings.  For instance, an affordable healthcare plan that provides some coverage will be attractive to millions of Americans.  We are also seeing that in cars, for example.  Hyundai and Kia have had enormous success at the low end.
• Businesses that fail to respond to these structural changes in the economy may miss the new business opportunities and also face threats to their existence.