700 Million More Elderlies

Most people are aware of how declining fertility rates, and longer life spans, means that demographics of advanced economies is trending towards more older people. Japan is the common example of where it is currently a problem, but it will be a global issue to content with later this century.

A figure from a study published in Lancet really drives it home:

The number of people aged 80 and over, globally will increase from the present 141 million to an extraordinary 866 million in 2100.
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30677-2/fulltext

In a nutshell that means that younger people will have to work more to support the older people, directly or indirectly.

It also means that capitalist countries will have a system that doesn’t work with a decreasing population, and they population will have fewer workers and more people who don’t spend much money.

Japan Down 0.51% in One Year

That doesn’t sound like a lot, but there were 644,000 more deaths than births (assuming an immigration rate of zero).

Every prefecture on mainland Japan saw a decline, so even internal migration was not a help anywhere.

Elon Musk saw this news and his saying that Japan will disappear was widely spread. He seems to be unaware of how this will soon be a global issue.

45 of Japan’s 47 prefectures have more residents aged 75 or older than those under 15

Source: https://www.nippon.com/en/japan-data/h01317/japan%E2%80%99s-population-drops-in-every-prefecture-except-okinawa.html

Bulgaria is Fading Fast

Nobody wants to be the poster child for population decline. Losing 11% in 10 years is serious. Enough for people to extrapolate that to think they could lose 100% in a century.

Bulgaria’s population shrunk more than 11 percent over the past decade, according to its latest census, as the Eastern European country struggles to stem the tide of young people seeking more-lucrative work abroad amid low birthrates.

…Bulgaria has the lowest per-capita income in the 27-member European Union. But since 2014, Bulgarians have been entitled to work and live anywhere in the bloc, with many leaving to seek better pay and career options.
Washington Post

Not mentioned as much as fertility is emigration. A major factor in the near future will be vying for new citizens / keeping existing. Expect some countries to ban people from leaving.

How Much Decline = Permanent Recession?

One of the reasons this website exists is that the detrimental effects of population decline on capitalism haven’t been acknowledged yet.

While it has long been known that increasing the population is good for the economy, it is rare for someone to put a value on it. Recently the WSJ reported:

Historically, nearly half of the country’s economic growth has been driven by the expansion of the working-age population, including immigrants, said Neil Howe, an economist, demographer and managing director at Hedgeye Risk Management, an investor-oriented research company. Recent federal-budget projections suggest the potential labor-force growth rate will hover just above zero for years to come, down from a range of 2.5% starting in the mid-1970s to 0.5% from 2008 through last year.

So, whatever the economic growth was since 2008 (roughly 2.2% per year), half of that was due to a 0.5% increase in the working age population.

If we see that population growth become zero, then the GDP will grow by half, say 1.1% per year. If population declines by 0.5% per year, GDP growth will be zero.

Anything worse than a 0.5% drop in working age population, presuming that is ongoing, will mean a permanent recession.

This is best seen as an example of what will happen in other countries, because the US is such a magnet for immigration that they will have that as a way to counteract population decline for a long time. And while a drop in GDP has historically signaled doom, other, more meaningful metrics might emerge.

Desperation in China: Loans Offered

Jilin in northeast China is offering married couples bank loans of up to 200,000 yuan ($31,400) if they have kids, joining other provinces in the roll-out of financial incentives to overcome a declining population.

Certain small businesses set up by couples with two or three children will also enjoy exemptions and cuts in value-added taxes, reports Reuters

…Jilin also said it will also extend the duration of paid maternity leave to 180 days from 98 days

For context, the north-east province’s population fell 10.3% in 2020 compared with 2010. And Jilin slumped 12.7%. These are massive numbers, certainly due also to internal migration.

Reward beats punishment. So while everyone would hate being taxed for not having kids, rewarding those who do is commonplace. In the US, for example, there are varies “tax credits”.

Incentives also scale well. You can keep increasing them until you get the desired result. The deep concern is whether no amount is enough for many people.

China Has Shadow-Banned Vasectomies

China is becoming increasingly desperate to reverse the decline in birth rates, which is now lower than that of Japan. Allowing people to have more than one child hasn’t been enough, because, as we have seen in other lands, once people get used to having fewer kids, it tends to become entrenched.

It is quite difficult to force people to have children, and the usual enticements aren’t doing much, so China has started removing birth control.

First up is vasectomies – Chinese men are finding it impossible to get one.
(Source: Washington Post)

Presumably contraception is next, perhaps via price hikes or a false flag event. Yet while it is possible to stop the availability of contraception, someone who really wants a vasectomy should be able to get the procedure done overseas.

As nations become more desperate to return to population growth, it will become more clear how fragile capitalism is, as it needs growth to survive.

U.S. Birthrate Declines

The U.S. birthrate has declined for the 6th year in a row, because of changing attitudes towards having children. Pew Research Center did a survey of 3,866 women aged 18-49 and men aged 18-59 and asked them:

“Thinking about the future, how likely is it that you will have children someday?”

In 2021, only 26 percent answered “very likely”, a big drop from 32 percent in the same survey just four years ago. For those who don’t want kids, the main shift in reasons is the economy (child care, health care and education), although simply not wanting them regardless of circumstances was still the primary reason.

The current fertility rate for the U.S. is 1.69, down from 1.73 pre-pandemic – an all-time low.

China’s Birthrate: New Low

Predictions for populations from places like the United Nations, don’t account for accelerating change, as we see in China currently. Latest inducements are not helping, and fewer people are marrying:

Figures released by the country’s national bureau of statistics show there were 8.5 births per 1,000 people in 2020, the first time in decades that the figure has fallen below 10. In 1978, the figure was more than 18 per 1,000.

The statistical yearbook, released at the weekend, said the natural rate of population growth – taking in births and deaths – was also at a new low of 1.45.
https://www.theguardian.com/world/2021/nov/23/chinese-birthrate-falls-to-lowest-since-1978

India: Below Replacement Rate

Most people would be surprised to know that in recent years India has only been slightly above the nominal replacement rate of 2.1 – and now it is below that:

India’s most recent National Family Health Survey, which is conducted every five years by the Health Ministry, was released Wednesday and showed the total fertility rate (TFR) across India dropping to 2.0 in 2019-2021, compared with 2.2 in 2015-2016.
https://www.washingtonpost.com/world/2021/11/25/india-birth-rate-replacement-population/

While COVID could be a factor for part of the surveyed period, consider this:

The proportion of women who used contraceptives rose from 54 to 67 percent, according to the national survey, while those who reported an unmet need for contraceptives fell. The proportion of teenage marriages has also decreased…

On top of that, as we see everywhere else, urbanisation is a big factor:

In cities across India — as in other countries — women are opting for fewer children: The urban fertility rate is 1.6.

Low Birth Rates Become Fixed

Statistic: Number of births in the United States from 1990 to 2019 (in millions) | Statista

When we see major drops in birth rates over a short period of time it will triggered by something – most recently the Global Financial Crisis, and currently the pandemic.

The curious thing is that the new rate gets locked in, even when the initial cause dissipates.

Between 1980 and 2007, U.S. birth rates stayed within a narrow range of roughly 65–70 births per 1,000 women aged 15–44. But between 2007 and 2020, birth rates plummeted by about 20%, falling to 55.8 last year. [Axios]

Triggered by the GFC, but did not bounce back. Collectively it seems that we are continuously wanting fewer children, and short chocks to the system cause adjustments in our behaviour, that were always on the verge of happening.