Is population growth
a Ponzi scheme?

YOUR MONEY: Profits go to few

By francisd@csps.com">David R. Francis, Inside Tucson Business
Published on Sunday, September 27, 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

Use the form below to post a brief comment to this story, or respond to other readers. Please use the word count tool to assist you in keeping your remarks to 500 words or fewer.

Comments appear immediately on the site. Editors do review comments periodically during the day, and will remove offensive or off-topic content. You may also report inappropriate comments to the editors. Your thoughtful contribution to the online discussion is appreciated.

(optional)
Current Word Count:
   

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

Classifieds


Find Real Estate

Real Estate

View All Real Estate

Find a Vehicle

Automotive

View All Automotive