For as long as economic activity has been studied, experts have theorized that population growth has a massive impact on the overall well-being of an economy. These days, when a nation is suffering from a lack of births or a sudden downturn in immigration, economists are usually the first one to sound off a warning and claim that additional workers are needed if growth is to be maintained. Recently, however, pundits have been increasingly arguing that population growth may not be nearly as important as it’s so frequently made out to be.
Can economists really prove that population growth doesn’t matter?
Oftentimes, demographic change is demonized for a great number of reasons; whether it’s to stoke racial or religious tensions or simply to assess how society might change in the forthcoming years, sudden demographic changes are usually hot-ticket news items. These days, demographic changes are being discussed as it pertains to the future of the economy like never before, especially since populations across the developed, industrialized parts of the world are slowing down their rates of growth.
Some economists view this as a financial calamity in the making, arguing that a shortage of workers in the future could seriously impede the ability of major economies to achieve sustained growth. The problem isn’t restrained to workers, either; with fewer consumers to purchase goods and services, the argument goes, economic prospects will be diminished across the board. Some have been ardently resisting the idea that declining population figures spell out financial doomsday, however, and instead assert that population growth largely doesn’t matter when it comes to economic well-being.
Adair Turner, a senior fellow at the Institute for New Economic Thinking, recently argued that slowing rates of population growth in the developing world aren’t something to lose sleep over. Turner’s side of the argument posits that far too much attention is being paid to slowing rates of population growth, especially since we’re now inhabiting a digital age where technology and automated work processes make ancient concerns about the elderly’s ability to support themselves a literal thing of the past.
These days, though, more workers are putting in long hours even after reaching the age of 65, especially in information economies where workers can rest in air-conditioned offices tapping away at computers all day.
Similarly, the rise of automation has given birth to a host of articles and studies assessing the so-called “workless future” we’re evidently approaching. This so-called “world without work” that’s barreling towards us will be defined by the fact that robots and algorithms manage our responsibilities for us, freeing up humans to pursue other activities. Companies like Avidon Marketing Group, who are pioneering the digital frontier, evidently believe that a focus on technology is paying off. According to their founder and CEO Igor Kholkin, “There are simply too many advantages to using artificial intelligence to do a lot of the heavy lifting.”
Regardless of whether one is happy or sad to see automation becoming a broader facet of the modern economy, however, it should be clear to see that we’re still far off from replacing human workers with machine counterparts entirely.
Nevertheless, technology is enabling more people to keep working as they age, and it would be foolish to assert that someone over the age of 65 should automatically be considered retired in this day and age. As a matter of fact, there are now good reasons to believe that a majority of Americans aren’t saving enough so that they can retire at the age of 65.
All of this bodes the question as to what the “working age” or tomorrow will be – while modern economists generally argue that those aged 15-65 years old are capable of contributing to a country’s economic output, that figure could change sooner rather than later. With technological developments making it easier for disabled or elderly workers to keep contributing despite their physical ailments, too, it’s easy to see how modern understandings of population growth and its impact of economics could be substantially less useful in the future.
Still, it’s still likely that the overall rate of a population’s growth has a sizable impact on that population’s economic well-being. With more (or fewer) consumers and workers being added to a population, it’s only natural that the economic structure that population relies upon to meet its needs also evolves to incorporate its newest members. Developed, industrialized nations of the future will thus have to take seriously the issue of stagnating populations, especially if immigration crises of tomorrow make it challenging to maintain the stable flow of people and goods across borders.