Is population growth
a Ponzi scheme?

YOUR MONEY: Profits go to few

By francisd@csps.com">David R. Francis, Inside Tucson Business
Published on Saturday, September 26, 2009

Forty-five nations face a population “bust” that has some leaders wringing their hands. They worry about the costs of supporting an aging society and the loss of national and economic power.

When Vice President Joe Biden spoke of Russia’s “withering” population this past summer, Russian leaders bristled.

But notions that population growth is a boon for prosperity – or that national political success depends on it – are “Ponzi demography,” says Joseph Chamie, former director of the population division of the United Nations.

ADVERTISEMENT
The profits of growth go to the few, and everyone else picks up the tab.

Here’s a look at the numbers: By 2050, countries as diverse as Cuba, Georgia, Germany, Hungary, Japan, South Korea, and Russia will lose at least 10 percent of their people, suggest estimates from the United Nations.

This trend toward fewer births is accelerating.

In the wealthiest developed nations, the average age is rising at the fastest pace ever, UN demographers note. Today they have 264 million aged 60 or over. By 2050, that number is expected to rise to 416 million.

By that time, the world’s population should stabilize, if UN predictions are correct. The population surge in poor countries in Africa, Asia, and the Middle East would be offset by declines in much of the developed world.

Some nations facing decline are fighting back with incentives for families to have more children. The United States is bucking the trend with its relatively high immigration rate.

Growth, whether through immigration or natural increase, is a plus for some groups. For business, it means a boost in the demand for products. It also means a surge in low- and high-skilled workers, which can keep a lid on wage pressures. Religious and ethnic groups want more immigrants of their own faith and ethnicity to raise their political and social clout. The military regards young immigrants as potential recruits.

But the public pays a cost for a bigger population.

Chamie speaks of more congestion on highways, more farmland turned into housing developments, more environmental damage, including the output of pollutants associated with climate change.

In the current healthcare debate in the United States, one costly question is whether the insurance covers some 11 million illegal immigrants.

Of course, there are also costs for countries with stable or declining populations.

They will need to spend more looking after older citizens and, yes, some industries like housing will shrink. But governments won’t have to spend as much on children. And any labor shortage would fade if increasingly healthy older people worked an extra year or two before retiring to maintain their standard of living.

Raising the average retirement age does far more to increase the working population than increasing immigration levels, says Steven Camarota, research director of the Center for Immigration Studies, a Washington think tank opposed to high immigration. Industrial nations with large service industries have plenty of employment opportunities for seniors, as opposed to poor countries where many jobs – say, planting rice or other crops – are hard work.

The goal should be gradual population stabilization, Chamie says. The costs of an aging but stable population would be more manageable than those of a population boom.

He asks: Does America really need more than its current 309 million people? With immigration at present levels, it will have 439 million by 2050.

A stable or falling population, he says, “is not a disaster. It is a success.”

Contact David R. Francis

at francisd@csps.com.
Previous:
Financial planning for the under-35 crowd
Next:

Comments

WRITE A COMMENT

You must register with a valid email to post comments. Only your Member ID will be posted with the comments.

Registered users sign in here:

Become a Registered User

Member ID:
*Password:
Remember login?
(requires cookies)
 

Do not use usernames or passwords from your financial accounts!

Note: Fields marked with an asterisk (*) are required!

Create a Member ID:
*Choose a password:
*Re-enter password:
E-mail Address:
Year of Birth:
 

(children under 13 cannot register)

First Name:
Last Name:
Company:
Home Phone:
Business Phone:
Address:
City:
State:
Zip Code:
 
Inside Tucson Business on Facebook


UP & COMERS

Up and Comers Nomination form

Nomination Form

Tucson Twitter

Tucson Twitter

What is Twitter?

Online Dining Page

Flickr

Online Dining Page

Click to Flickr

Flickr

View our Flickr page

Fresh Business Tips

Fresh Business Tips

View Video Feed