The Great Death Depression

Economists define a depression as a period of time in which the GDP of a country declines by at least 10%. So what to make of the decline in total deaths we will soon experience in the United States as described in the work of Dr. Vanderlyn Pine?

I made reference earlier to an article posted on FuneralWire which describes some of his statistics. (FuneralWire--Death by the Numbers) In addition, Van Pine published a more exensive article in the January 2005 issue of the American Funeral Director magazine, which more thoroughly makes the case for a substantial decline in the volume of deaths in America over the next 15 to 20 years. The indicators he describes point to a decline approaching 20%!!! in total deaths, at least among demographic groups represented in the birth statistics of the 1920s and 1930s.

Yes that's a decline in total deaths in America which has just begun and which may fall to a level 20% below the numbers we saw in the 1990s (something close to 500,000 fewer deaths) with no recovery until at least the year 2025. YIKES!!! That's 18 years from now.

I'm not entirely sure why we as an industry have not come to grips with these numbers. I suppose first and foremost because a decline in deaths comes without any precedent in America. We have never had to follow demographic trends because the national death volume slowly but steadily rose for the past 100 years. We have also had the challenge of cremation which has kept us busy developing new approaches to what we do. Also, we have tended to rely on the big companies to point out the important trends and give us plenty of warning regarding coming changes to the marketplace. In this case, however, the big companies (particularly the publically traded ones) have no incentive to recognize the possibility of such a profound trend in the demographics. Such an acknowledgement would put tremendous pressure on stock prices and the like. They are much better off looking for ways to mitigate the coming trend (if they even know anything about it) and then recognize the demographic changes one year at a time. After all, why spook Wall Street when you might be able to work around the challenge in some other way.

Regardless, this trend could prove damaging to many funeral home operators across the country. We need to look very carefully at the assumptions that go into our business plans in the years ahead. A decline in deaths is a decline in deaths and when compounded with the rise in cremation will call for some profound changes to the entire economy of funeral service.

Of course, we also need to seek ways to independently validate the work of Dr. Van Pine, just as would happen with any journal article in science. He has chosen a particular methodology, which appears well reasoned and accurate to me. Nevertheless, we need to find several other demographics and statistical experts who can review his methods and results so as to confirm (or call into question) his conclusions. These numbers are dramatic (in a sense earth shattering) and therefore merit careful review so that we can make reasonable decisions about the future of our businesses.

We have much more work to do than we ever considered before and we have zero time left with which to plan. It appears the decline has already begun.

Is this a depression in the making? Very possibly, though as with many other ideas in this world, some hidden assumption might prove wrong. If Van Pine has described the circumstances with accuracy however, then we may very well see a change in funeral service that fits the depth and duration of something we come to call The Great Death Depression.

[Note: If I can get permission to reprint the American Funeral Director article in an electronic form, I will post it here. In the mean time, I recommend you give them a call and get a copy sent out so you can review Van Pine's work. The article carries the title of "The Demography of Death" and begins on page 20 of the January 2005 edition.]

---------------------------  Feb. 4 Update -----------------------------------

I now have a scanned version of the article organized in PDF format. I do not have permission to post it on the site directly, but if you send me an email I will forward the document to you. It is about 8 Mb, so make sure your email system will allow attachments that size (most will these days but not all). Send your request to: bt@hathawayfunerals.com 

Comments

[Rick Dewhirst]

You are hitting it right on the head!! Funeral service needs to look long and hard at our outdated business models coupled with data such as this or we will all be saerching new career paths!