The other day I was asked to do an interview for a South Korean radio station about the declining-population “crisis”.
Therein lies the rub — there is no crisis.
While I think the interview went well (you can listen to it here), I didn’t have ample time to flesh out my arguments; I’ve decided to put them down in more detail here.
Probably the most important aspect that I didn’t even get a chance to cover is that globally, our economic system is essentially broken because we are forced to exist inside a paradigm that erroneously assumes Earth’s resources are infinite. They are not, as the global ecological footprint clearly shows.
To slow and perhaps even reverse climate change, as well as mitigate the extinction crisis underway, we are obliged to reduce consumption globally. Shrinking human populations will contribute to that goal (provided we simultaneously reduce per-capita consumption).
But that argument, no matter how defensible, is still not even remotely appreciated by most people. It is the aim of only a minority, most of whom have very little political power to engender change.
The oft-touted ‘crisis‘ of aging populations is founded on the erroneous notion that it will lead to economic crises for the affected countries. Indeed, countries like South Korea and Japan have declining populations, others like Italy are stable and will be declining soon, and others like Australia are only growing because of net immigration.
The reason for the hyped-up panic generally comes down to the overly simplistic ‘dependency ratio‘, which has several different forms but generally compares the number of people in the labor force against those who have retired from it. The idea here is that once the number of people no longer in the labor force exceeds the number of those in the labor force, the latter can no longer support the entirety of the former.
This simplistic 1:1 relationship essentially assumes that you need one person working to support one retired person. Errrh. Right. Let’s look at this in more detail.
First, in any country experiencing population decline (i.e., mainly high-income nations), there is almost always a form of national superannuation (retirement savings). This means that while you are working, you squirrel away money in a special investment fund (usually guaranteed or supported by government co-contributions) such that by the time you retire, you’ll have more or less enough to live on until you kark it. Certainly some superannuation schemes are better than others, but the idea that the working support the non-working is not only simplistic, it is mostly wrong. My own superannuation accumulated principally by me is designed to support me (and my family) later (yes, I realize government co-contributions depend to some extent on the number of current taxpayers).
But this ratio also assumes that anyone too young to be in the labor force is irrelevant for a nation’s economy. But this too is incorrect. What also happens in a declining population apart from a net drop in the total number of people? Why, the age structure changes too. This means that there are fewer young people (children), and as any parent or government minister in charge of education will tell you, children cost quite a bit of money. So, with fewer children, there are also fewer expenses. It turns out that once you include children, dependency ratios do not change as much as those including only adults.
But what about all those old people needing extended medical and hospital care? Surely that’s the expensive part, right? Yes, and no. Let’s not forget that people are living longer and have more years of healthy life than they have ever before, nor that public healthcare is a self-sustaining concept given that support for healthy people in their younger years reduces the time spent unhealthy later.
Dependency ratios also assume a static set of conditions between the labourers and the retirees. But this is so simplistic as to be patently ridiculous. Long-gone are the days when you would retire at the age of 55 and cease any meaningful contribution to the economy. Forgetting unpaid volunteer work for the moment (which is a sizeable, yet non-valued aspect of most economies), people are working much later in life, have flexible work arrangements (COVID has emphasised this), and are generally contributing to economies well into their retirement years. Assuming fixed conditions is an ageist and frankly insulting concept — it essentially treats retirees as useless members of society.
Simplistic dependency ratios used to justify a looming demographic ‘crisis’ are also inherently xenophobic and racist. The Earth’s human population is nowhere near reaching a peak or decline, meaning that there is a plentiful pool of able-bodied people of working age in most of the world. The problem of insufficient number of labourers in any one country is then entirely based on a distribution issue — limited or suffocating immigration policies (including welcoming and open refugee policies) could ‘fix’ any labor shortages anywhere with the right policies. There is ample evidence now that migrants provide net benefits to the receiving economies, not the other way around.
Talks of demographic crises also ignore the overwhelming benefits population reductions have for the average person (mitigation of climate change and biodiversity loss notwithstanding). Fewer people clambering for insufficient housing means that lifestyles improve and become more affordable. Fewer people also alleviates potential food-supply and -distribution crises. Fewer people also alleviates a society’s reluctance to welcome foreigners, thereby potentially reducing the incidence of xenophobic, right-wing populism. Fewer people means fewer cars on the streets, easier access to public transportation, freer medical services, and less-competitive educational opportunities. For the average punter, fewer people = better life.
So, why do we constantly hear from our politicians (and their corporate backers) that population declines are ‘bad’? It boils down to the fact that fewer consumers means lower net profits for shareholders. From what I can determine, that’s about it. The mega-rich will be slightly less mega-rich if there is a moderate drop in total number of consumers. Corporate capture of governments worldwide perpetuates the myth that an aging population is bad for us, when in reality it’s great for us, it’s good for the planet, and it’s only (slightly’) bad for them. My heart bleeds.
Don’t believe the ‘crisis’ hype of declining populations. It’s a good thing for everyone.
CJA Bradshaw
