If the US economy functioned fine 10, 20, 50, and 100 years ago, when the population was ~half the size, why can’t it withstand a population decline now?
In: Economics
There was half as much everything. The problem isn’t that there are not enough people. The issue is that there are not enough people to support the retirees.
Basically we would be in a situation where people are leaving jobs that are required for the country to keep working. Farmers, plumbers, whatever, because they are getting old and retiring.
They still exist in the country, despite leaving their jobs, they still need to eat food on farms and have their pipes fixed, but there are not new replacements.
So we start getting job vacancies that cannot be filled but a society that still needs them filled because people haved died off yet.
I mean. It didn’t. We had crashes multiple times in the 20th century and would likely have had more if not for wars and massive influxes of spending.
Because idiots created a pyramid scheme to keep ungrateful boomers alive and now we have to bring in as many people as possible because no one wants to have kids(because boomers horde all the wealth and no one can live a comfortable when they don’t share)
But the population crisis is a worldwide phenomenon and eventually every country will have to face it. The result is going to be the eventual destruction of social security, there is no real alternative. You can import immigrants until the rest of the world starts feeling this too, you can raise taxes but that only delays the problem a little bit.
The only solution will be the destruction of the social safety net that should have never existed. People will be mad for me saying that but idk why, youre never seeing any of that money anyway.
It __can__ support the final balance __after__ the population has declined to the point that it will stay at.
What is __harder__ to do is to support it __while__ the decline is happening because during that time you have way more older, non-working people that need all the things a society produces (food, medicine, housing, power, personal care etc) but proportionally fewer working age people producing and doing those things.
So during the decline you either have to have old people going without, or working people have to work extra and get no benefit themselves. Not fair to anyone because those “old” people in that scenario are us right now who are working and contributing in taxes etc that are supporting the previous generations (the boomers right now).
Japan did withstand a population decline for quite a long time. They have been experiencing an atrocious birth rate and also low immigration. There are some problems here and there but it’s not like their society are collapsing anytime soon.
Given what we know of the circumstances, the US probably could adjust to declining population. First, the rate of decline is relatively slow (unlike some other countries) and the US has a relatively functioning system that is attractive to immigrants. Unless something really dramatic happens, the US probably adjusts well to a slow decline maybe in the order of 2-3% a decade. Not to say there won’t be some issues but the US has a lot of capital and knowhow which can help with an adjustment of this magnitude.
Where population decline is a big deal is when birth rates go so low that the working population drops very quickly (say 5-10% a decade). In a country that isn’t yet broadly wealthy per capita and with poor social safety nets, this will create significant social and likely political issues when the dependency ratio goes really high. The problem might compound because these very social issues make it even less likely that birth rates recover.
It can. The population of native born workers has been declining for a while and subsidized by mass immigration. Congress has been pro business on this by importing millions of immigrants to meet the production needs of businesses while keeping wages low and inflating demand for housing.
It functions fine now. The issue isn’t the economy writ large, it’s Social Security (and similar), basically. Old people can’t work(/we don’t want to force them to), so we use taxes on the young to pay (some of) their expenses. This is where a declining population can become a problem — unless you have so much economic growth to offset it, if you shrink your workforce, you either have to increase contributions or decrease benefits, and we really really don’t want to have to do either of those things.
Note, this isn’t a Ponzi scheme — we don’t need endless population or economic growth to maintain the system. Even if GDP/cap and population stayed constant, we could still have a solvent social security system. But decreasing is a problem.
You’re asking a smaller population to support the retirement of a very large retired population. This is why chinas economy will collapse pretty soon because of their one child policy.
Sounds like a great idea, who bump the price of labor up a drastic amount. I’ll go shove shit if you pay me 45/hr
Latest Answers