Recently, I was reading an article from the BBC that spoke about how developed nations are struggling with birth rates. Such as how in the UK the birth rate has hit 1.49 children per woman and how the Singapore is now increasing the retirement age to increase their worker population. And I had to wonder, why is this all a bad thing?
The article states that the only options economists see is to increase the retirement age or to have greater/more open immigration policies, but why does it matter?
The world’s population is currently, as of a May 2024 census by the UN, at 8.1 billion people. If turn around and in the next few decades the population, globally, went down to say 7 or 6 billion what would be the problem? Isn’t automation going to lead to less overall jobs anyway, leading to more homeless and people needing government assistance, (implying that people would need to spend MORE money on taxes to support those people) so we don’t really need a super large work force in the next few decades anyway, right?
I know this seems like a lot of questions, but my base goes back to how economics runs with populations needing to be large. Why is it such a big deal that they aren’t super huge/are dropping? Can’t the corps just roll back to match the economy?
In: Economics
In the long run it might be fine. But policymakers are not concerned about the long run.
Old people are not economic producers, or rather, they consume more than they produce. That’s what retirement is all about. This is fine as long as the generation after them is productive enough to sustain them, either indirectly with social programs or directly by kids caring for their parents. But when old people outnumber young people, economies get strained.
It’s worth pointing out that a strained economy is not the end of the world necessarily. It’s not necessarily a bad thing in the long term that economies stop growing and become more sustainable, if they are adapted for that. But people in power, be they politicians or executives, got that power based on an economy that is always growing. So they want to mandate policies that keep the world in the same state that made them rich and powerful.
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