Slowing of Growth
In How Demographics Rule the Global Economy, the Wall Street Journal offers seven interesting articles – Population Implosion, The End of Cheap Labor, Manufacturing Bust, Girl’s Life, Gender Gap, Promise of Youth, and Aging Gracefully – on how demographics may affect the world economy, particularly the growth paradigm.
Ever since the global financial crisis, economists have groped for reasons to explain why growth in the U.S. and abroad has repeatedly disappointed, citing everything from fiscal austerity to the euro meltdown. They are now coming to realize that one of the stiffest headwinds is also one of the hardest to overcome: demographics.
Next year, the world’s advanced economies will reach a critical milestone. For the first time since 1950, their combined working-age population will decline, according to United Nations projections, and by 2050 it will shrink 5%. The ranks of workers will also fall in key emerging markets, such as China and Russia. At the same time the share of these countries’ population over 65 will skyrocket.
There are a great many charts, some of which may be accurate, others of which may be skewed to satisfy the WSJ editorial view. The authors repeat the usual claims that Malthus definitively predicted a Malthusian catastrophe, which I discussed in Dissing Malthus Again, and that Ehrlich and the Club of Rome were wrong to be wary of overpopulation. They take a shot at Alvin Hansen, a Keynesian who advocated government spending to get us out of the Great Depression when he should have known that World War II would do the trick.
Probably the biggest takeaway is that the West will skew older and older while the far more populous Asia skews younger but so decidedly male that brides are already hard to find. Only Africa seems to be on track to continued population growth:
Simply put: A baby boom will lift the poorest continent on Earth into the center of global affairs. Africa will soon become the world’s most reliable source of new life: of college graduates, young workers and budding consumers.
It should be noted that the WSJ article does not consider the effects of climate change, protracted proxy wars, or refugee relocation in these expectations.