It just seems like we could adjust our economy to compensate for a shrinking population. The answer of paying your working population more seems so much easier trying to get people to have kids they don’t want. It would also slow the population shrink by making children more affordable, but a smaller population seems far more sustainable than an ever growing one and a shrinking one seems like it should decrease suffering with the resources being less in demand.
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The way programs like Social Security and Medicare work is by taxing people who work to pay for benefits for people who no longer work. It’s not a personal savings account.
When the program was implemented in the 1930s, you had senior citizens who had already retired and weren’t making any money. To give them Social Security, you took money from the people who were currently working. So the money coming out of your paycheck now isn’t for you — it’s for the people who paid for the people behind them, who paid for the people behind them, and so on. [Currently about 67 million people (1 in 5 Americans) receive Social Security benefits](https://www.ssa.gov/policy/docs/chartbooks/fast_facts/2020/fast_facts20.html).
As the number of people working declines, you either have to cut benefits or increase taxes, or both.
I mean, there isn’t really an objective answer to this. However, there are some reasons why having a growing population is good:
1) Our best resource is people. Each new person is another chance at the genetic lottery, and each new person brings a unique combination of training, experience and inherent abilities that can be used to improve the world. If your population needs a 1 in a billion person to solve a problem, your chances of producing and finding that person are greater if you have a larger population.
2) Most developed societies have some type of “You can retire when you get old,” scheme, like Social Security in America. These schemes typically work by taxing your working population for a small amount, and using that taxation to fund your elderly population’s retirement. If you have a growing population, this is never a problem – you will always have more people paying into the system than you have cashing out of the system. However, if your population stops growing, then there will eventually be a point at which you have more people cashing out than paying in, at which point you either need to drastically increase your taxation or reduce your benefit. Neither tends to be popular.
This is practically a credit card problem – they want to pay for today’s issues by expecting income in the future. So all of our social programs financial models are based on growth.
We could easily prevent this by forecasting flat or a decrease -and once ( or if) the funding in reserve gets too high everyone gets a payout – but people hate taxes – and that is an easy political platform to run on.
The only thing that keeps an economy afloat is a body of productive workers willing to back up the currency. The only reason you’d have faith in a currency’s future is if there will always be more new workers to replace the old ones, increasing output and productivity.
If a country is depopulating, what’s giving the currency value? Would YOU invest in a currency that is losing support and isn’t projected to match or exceed its current economy?
People produce the demand for resources, but people also produce the supply of resources.
It’s not so much a question of total numbers but of demographics. A lot of people were born about 70 years ago and are still alive because of medicine and other advancements. After that, birth rates dropped off and never fully recovered. Many of them aren’t producing resources anymore, but they still consume resources. So we need to make sure that enough resources are produced for them to consume.
So if we’re going to start managing population numbers, it makes sense to either encourage having more children who will grow up to be productive and useful, or only let people into your country who seem like they would contribute positively to the whole resource situation.
Much of our society and Government was setup to take advantage of a growing population.
Benefits programs like Social Security, Medicare, and even company pensions are dependent on having more people paying into the system than take out of it.
When there is a slump in population growth you end up with more elderly people than the young can support and it puts a great deal of strain on the system.
Libertarians have been known to describe Social Security as a pyramid scheme for this reason (it’s not a pyramid scheme, but the analogy is valid to a degree)
To sustain this more tax revenue has to be spent on keeping those systems running or the benefits have to be cut at least until that section of the population dies off and the system re-balances itself. The end result is the younger generation doesn’t get the same benefits that their parents and grandparents had.
Another option is to artificially increase the working population with immigration.
Another factor is that the elderly require far more medical care, specialized homes, and medication while not contributing to the workforce any longer (because they are retired) which also puts more of a strain on the system.
In the long run a population decline will benefit things like housing prices, and reduce strain on the system. But less tax payers also means less government revenue for programs and infrastructure maintenance.
Just some simple math from the US:
The age of retirement is 67 (not everybody can or does retire at this age, but it’s something we as a society have agreed upon as something we aim for). US life expectancy is approximately 77. Approximately 16% of the population falls into this range at the moment. There’s also approximately 20% of the population under 16, and thus not eligible for work. This means the other 54% of the population for the most part is supporting these people, in one way or another. We’ll ignore the children for a second, as they don’t require as many resources when it comes to healthcare and palliative care, so that effectively means we have about 3 working-aged adults per one retiree.
If everybody stopped having kids right now, in 20 years we’d have approximately 55% of our current population at working age and 20-25% of our current population in retirement age, which is a number that grows closer to 2:1 than 3:1. Another 20 years after that, we’d have about 35% of our current population at working age and 25-30% at retirement age, which is perilously close to 1:1. In two generations, the number of people working to support each retirement-aged person would be almost cut into a third.
Now of course, people are still having kids, the above situation isn’t remotely reflective of reality. But as the number of children per household decreases and life expectancy (in theory) increases, there’s going to be more retirement aged people per worker, and that’s going to strain a system that’s already overloaded. It’s going to be mean either that retirement will have to be pushed back dramatically, leading to people working beyond the point where they physically or mentally can, or quality of life for retirees has to be sharply curtailed, or we have to increase how much we take from each working person to pay into the system to keep it at a good amount at the same age.
If, instead, the trend is reversed and people have more children (or we replace aging populations with work-aged immigrants), the reverse can hold true. We can keep or expand the current standard of living and retirement age for retirees, without taking more money from each worker.
There’s also the fact that capitalism as a system is fragile and doesn’t cope well when numbers don’t go up. “Our sales declined 2% this year, because the population shrunk by 3% due to declining birthrates” shakes investor confidence and has ripple effects on the market that cause economic decline or depression. Yaaay.
The truth no one wants to say is, yes, but it would be at a cost to GDP/standard of living. How much is debatable.
It is “bad” because we functionally borrow from the working age to pay for the non working age. If you reduce the birth rate, that ratio falls, decreasing standard of living for either side of that equation, or distributed amongst them.
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