Future strength depends on young people

As aging populations fight to assert a status quo which is largely unaffordable and unsustainable, they are doing so at the financial expense of younger workers.  This is an enlightening piece reminding us of some key demographic shifts presently afoot in the world.  Lest we forget, young people are the future.

“Today’s most important population trend is falling birthrates. The world’s total fertility rate — the number of children the average woman will bear over her lifetime — has dropped to 2.6 today from 4.9 in 1960. Half of the people in the world live in countries where the fertility rate is below what demographers reckon is the replacement level of 2.1, and are thus in shrinking societies.

In the U.S., we are accustomed to thinking about how this trend affects the welfare state: Longer lives and fewer children make it harder to finance retirement programs. But the rest of the developed world is aging faster, and it’s worth thinking about how that will change America’s global position, as well.”

  • China’s population will peak in 2026, just 14 years from now. Its labor force will shrink, and its over-65 population will more than double over the next 20 years, from 115 million to 240 million.  Its birth rate is presently 30% below a replacement rate.
  • In addition China’s one-child policy and sex- selective abortion, has rendered 120 boys for every 100 girls. From 2000 to 2030, the percentage of men in their late 30s who have never been married is projected to quintuple and is unlikely to improve the country’s economy or social cohesion.
  • The U.S.’s traditional allies in western Europe and Japan will have less weight in the world. Already the median age in western Europe is higher than that of the U.S.’s oldest state: Florida. That median age is rising 1.5 days every week. Japan had only 40 percent as many births in 2007 as it had in 1947.
  • These countries will have smaller workforces, lower savings rates and higher government debt as a result of their aging. They will probably lose dynamism and be less able or willing to spend money on armed forces and humanitarian missions abroad.
  • Food for thought:   See China’s Population Crash could upend US Policy

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One Response to Future strength depends on young people

  1. alien caffeine says:

    “I’ve got mine
    now you get yours
    but not from me” (overheard from an oldster to a young broker at Fidelity)

    Ain’t that the truth!

    Oh BTW: That Joe Granville piece about the averages dropping a 1,000 pts per quarter. Hogwash. So far.

    Just got my real estate tax bill and just about fell over. UP 18%!!!!

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