NEW YORK, December 11, 2015 (C-Fam) – Experts struggle to understand why the global economy languishes years after the 2008 global economic crisis. The Wall Street Journal dedicated a week of front-page reporting to a major – and underestimated cause: fertility decline and demographic aging. They found that in a globalized economy, one nation’s demographics affects the rest of the world.
Next year the working-age populations of the major economies will decline for the first time since 1950, and this includes Russia and China. Meanwhile, the major economies’ share of people 65 and older will soar. Their need for durable goods produced in developing countries will diminish, leaving in doubt the prospects of the world’s next generation.
One in five of Japan’s elderly are still employed, double the average for developed countries. Relative good health means Japan spends just 10% of its economy on health care compared to 17% in the U.S.
Bendable exoskeletons help elderly Japanese workers to lift loads meant for those 30 years younger. A robot called “Pepper” actually helps the elderly with some of their health-care needs. In its new basket of items for the consumer price index, the Japanese government dropped school lunches and added hearing aids.
Yet nearly one in four Japanese seniors lives below the poverty line, 40% more than in the overall population. Since there won’t be enough people to tend family graves in the future, seniors scatter “pretend ashes” from house boats in Tokyo to prepare for such an alternative. A balloon company will dispose of them aloft for about $2000.
By contrast, a fourth of the world will be African by 2050 and, at 1.3 billion-strong with an average age of just 28 years, will provide the world’s workforce. Yet Europe, in need of labor, is paying African governments to take back their citizens now living in Europe illegally.
Africa lags behind East Asia in creating jobs and infrastructure, like schools and roads. Just 9% of Nigerian adults are fully employed, the Journal said, a typical figure for the region.
India provides a cautionary tale for those hoping manufacturing will lead to quick growth for Africa. Like other developing nations, India faces “premature deindustrialization” and high unemployment. As developed countries age, the demand for what factories make, from cars to furniture, is leveling off with little prospect of returning.
China capitalized on its huge working-age population to become the world’s second largest economy after the United States. But after China’s three-decades of state-enforced family planning, factories are facing worker shortages, compounded by singletons leaving the workforce to tend to aging parents. Chinese wages have risen by double-digit percentages for a decade, causing corporations to seek cheaper labor elsewhere. Levi Strauss executives have considered a move to Africa where wages are low and the younger generation is booming.
China’s demographic dividend has become a “demographic drag,” according to the Journal. One reason is that decades of killing baby girls in China, as in India, is “obliterating universal marriage, the underpinning of socioeconomic organization for centuries.” By mid-century, there will be 186 single men for every 100 marriageable women in China and 191 such men in India. Even if the sex ratio at birth corrected itself overnight, 21% of Chinese men and 15% of Indian men would still be unmarried at age 50.
The United States has emerged as a comparative winner. On average, developed countries’ workforces will shrink 26% by 2050. America’s will grow by 10% in that period, making up 60% of the total population, yet down from 66% today. The Journal forecasts that the U.S. trade deficit with China will turn positive by 2042, in large part due to America’s demographic advantage over China.
Reprinted with permission from C-Fam.