I’ve never understood why a declining population is in itself a bad thing (for individuals).
Everywhere there seems to be labor shortages it’s almost always the low-end jobs that can’t fill vacancies (that’s a good thing for living standards). Plus benefits like less inheritance splitting, greater capital per person (roads, houses, etc.). And at the far extreme, developing countries often have high growth rates and widespread poverty as a result. On the flip side, if I’m an only child and inherit my parent’s house, that is a huge increase to my living standards to never have to carry a mortgage.
The argument usually seems to be that old people consume resources without working, but isn’t that true of both children and the elderly? The elderly need a lot of hospitals, doctors, nurses, etc., but kids need teachers, doctors, school bus drivers, universities, daycares, etc. Both groups might pull family members out of the workforce for years to care for them. But the elderly often have their own assets to draw from to pay for some/all of this, whereas kids come into the world with nothing.
What am I missing?
In: Economics
The first thing you’re missing is that the low-end jobs are critical for society. You seem to be under the impression that if they can’t fill them, they just go away and everyone wins because nobody has to do those jobs that’s not how it works. Someone’s gotta take the trash out and flip burgers. If the population declines, we simply don’t have enough labor to do those jobs.
Then there’s the entitlements issue. Retirement plans, whether public or private, rely on the notion that a larger pool of working people give a portion of their paycheck to support a smaller pool of older retired people. If the population decreases, the ratio of working vs. retired starts to tip towards retirees and there aren’t enough workers to subsidize their retirement.
You seem to have the basics but perhaps haven’t though through the scale and secondary impacts properly.
Yes, both children and old people are “non-productive” in that they can’t work, but children take 18-25 years to enter the workforce and they live in the same home as their parents during that time. Retired people can go as long as 40 years while also needing a separate place to live.
Lets take your house inheritance as an example:
Yes, you will eventually inherit from your parents but by the time you do, it’s usually quite late in life – Does inheriting their house when you are 50 or older really make up for not having one before that? And if the population declines rapidly, that house might not be worth much as everyone already has one and there are spares sitting around unused. This alone will have a massive impact on society as a lot of people have the vast majority of their net worth tied up in their house and their retirement plan often depends on being able to sell it and downsize. This only works if there is someone else who wants the old house and will pay for it – now imagine if there are more houses than people who want to buy…
If the transition is slow enough, we can transition from building more homes to maintaining the ones we have and getting used to the idea that land for housing is no-longer something that increases in value in a significant way but this is a huge change.
Governments have been kicking the can down the line for a hundred years with the expectation that tomorrow tax can pay for today’s debt. They can keep increasing the debt because the tax will keep growing with population increasing. Long story short governments around the world have overspent for the last hundred years and now the whole economy is fucked
It’s good for individuals.
The only remotely bad thing is useless and shitty products and services will disappear.
It’s also bad for defending a country.
AI and tech advances might change this in unpredictable ways.
A declining population at this point isn’t a bad thing unless you are a piece of shit capitalist who requires a large cheap labour force. It would need to decline drastically before things got to the point where necessary services went unfulfilled.
What will qualify as an employee in 10 years?
AI could pick up the slack of a declining workforce. Do you care who/what answers your question as long as it’s quick and correct?
It isn’t. Moneyed power requires more people so that there will be increased competition for fewer resources.
low end jobs tend be the ones building and maintaining the infrastructure and taking care of people, a lack of them is terrible for living standards.
If there’s a labour shortage for sure you can still fill high paying roles and it’s things like carers and cleaners that get squeezed and either go short staffed or have to employ less able candidates but a bad nurse or no nurse is almost always a far more serious problem than, say, a bad tax accountant or no tax accountant.
Greater capital can just mean more stuff that needs maintained with less people willing to do it: your million pound facility is worse than worthless if you can’t staff it. The declining birth rate does mean you need less schools and daycare centres; teachers and midwives; but you’ve already built and trained them so now you need to mothball, demolish or repurpose the hardware and retrain the staff, more expense.
The assets of the elderly in currency and property are worth less if there’s no labour. worker hours is the true gold standard for any economy apart from maybe a few of the oil states.
Who is going to refill the supermarkets and replace your diapers when you are 80?
Many national retirement systems (Social Security) are designed with the assumption of an increasing population and would have to be revamped.
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