Automation and Deaths of Despair

June 12th, 2017

On Monday, June 21, 1965, the day The Byrds released their hit single “Mr. Tambourine Man”, I began my career as an actuarial student. I have seen many profound demographic changes in the intervening fifty-two years, but nothing prepared me for the change which is the subject of this article.

Demography –the study of population changes—is an area which I follow closely as an actuary, and I review a daily stream of material produced by the Canadian Institute of Actuaries (CIA) and the American Society of Actuaries (SOA).

In 2016 the CIA distributed a graph which showed the changes in mortality or death rates for people between ages 45 and 54 for populations in France, Germany, UK, Canada, Australia and Sweden. The graph also had results for US whites and US Hispanics.
Actuaries have assumed that mortality rates are in decline and, indeed, the graph showed that for seven of the groups, this is what happened: death rates in 2010 were significantly lower than in 1990.

The startling exception was US whites, where death rates bottomed out in the late 1990’s and then started to increase.

The real bombshell was contained in a recent newsletter from a Canadian pension actuary, Joe Nunes, reporting on Princeton University research on the increasing death rates for middle-aged, non-Hispanic whites in the US.

The Princeton research identified two causes for the increased mortality rates. The first was a slowdown in progress against mortality from heart disease and cancer, not entirely surprising.

However, my jaw literally dropped when I read that the other cause was a rise in the number of “deaths of despair” due to drugs, alcohol and suicide.

The final piece of the puzzle was contained in an article in the Globe and Mail on May 30th which discussed labour participation rates in the US. It quoted research from the American Enterprise Institute which found that a third of US men aged 20 and older are jobless and have given up looking for work!

The writer, Brian Lee Crosby concluded that while American manufacturing is producing more goods than ever before, but due to automation, it requires fewer workers to do so.

While these startling results may have little direct bearing on those of us approaching retirement age, my reading suggests two vital lessons for younger family members:

  • Post-high school education in the future-oriented STEM (Science-Technology-Engineering-Mathematics) disciplines is critical.
  • Be prepared to embrace life-long learning to stay employed.