When Our Economy Stops Growing: What It Will Mean to You and Me

In economist Jeff Rubin's provocative new book, The End of Growth, the former chief economist of CIBC World Markets predicts a not-too-distant future where skyrocketing oil prices will force huge changes on all of us. Changes that go way beyond more pain at the gas pump. Because the world's leading economies are based entirely on cheap and reliable sources of oil, Rubin predicts that soon oil prices will rise to the point where it will no longer be the affordable source of fuel that drives our economies' engines.

Rubin's book helps put in perspective what many of us have suspected for years: chugging along in a petro-centric economy, but with a sense of foreboding that perhaps the SUV in the garage, the one-hour commute and a career relying on cheap imports from Asia just might not be the future. Though the prospect of slow-to-no-growth does seem daunting, Rubin says there will be a lot of positive outcomes for those who are prepared and willing to make changes in their lives. WalletPop wanted to know what this silver lining might be, and what it will mean for the average consumer. Click through the slideshow to find out what Rubin said.

SLIDESHOW: HOW TO PREPARE FOR THE COMING SLOWDOWN

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Greying of the workforce
Economist Jeff Rubin says the labour force is "still expressed as being made up of people from 15-65, but we know that's already not accurate. I see a greying of the work force, with more people taking up part-time jobs to cope with pension shortfalls and a longer life expectancy," says Rubin. He mentions the AVIS parking lot near his home that's staffed by pensioners who seem to have a great time jockeying cars around. And Walmart greeters are ubiquitous.

The Other Half of the Labour Story
The other tale to be told about labour is the opposite story, of youth unemployment. When economies get into trouble, it's youth unemployment that suffers. Look at Spain where 50% of youth are unemployed. This is a feature that will remain with us, so kids will live at home with their parents for longer.

Job-Sharing
But there is another way: job-sharing. In Germany the 'kurzarbeit' program is said to have saved somewhere between 1 and 1.5 million jobs in the last downturn.
In addition to having lower unemployment rates and carbon emissions, those countries experience a higher quality of life because the focus is on being "time affluent" in addition to being financially affluent. As Rubin explains, "Instead of firing someone, you get four workers to each work 25% less. What you find is that people develop multiple sources of income and have different kinds of jobs, which can lead to broader interests."

Post Secondary Spending
RESPs will become more popular as youth will spend more time in post-secondary education. Younger people will attend post-secondary education for longer, and will start their careers when they're 24 or 25 instead of 18. "That's not a bad thing," suggests Rubin. Unless you're their parents waiting the day they'll become self-sufficient, (or the student graduating with a mountain of debt).

Real Estate Reality Check
In a world where distance equals more money, where you buy a house will matter a great deal more than it does in a cheap gas environment. But soon enough, sprawling suburban real estate is destined to lose value, while urban properties will increase. So when buying a home, think carefully about whether it depends on a 40-50 kilometre daily commute.

Local Economies will Strengthen
As shipping costs skyrocket, no longer will we be buying green onions from China and lamb from New Zealand. Local agriculture will experience a boom as the cost of domestic foods compare favourably with once-cheap imports.

Fewer Bankers and Tighter Regulation
No one wants to be in a position where citizens are bailing out banks again. They'll demand that governments start regulating financial institutions more

Where to Invest
"In today's world, everyone owns everyone else's problems," says Rubin. Sounds like a situation with no safe havens, but as Rubin says, "there's a time for defense to be on the field and a time for offense. Right now, with non-existent returns, irt's probably better to stick to safe long-term investments. Bonds, however, are not the place to put money. US Treasury bonds are reliant on the People's Bank of China to keep buying them, and the day might come when the Chinese decide to stop doing that. And when that happens, God Help America.