What is the Demographics Winter?
🧟 We are in for one Hell of a ride.
There’s a toxic combination coming for Global GDP and the idea of progress. Young people are starling to lose hope in it, that is, the future.
Fertility rates are declining at record speed across Eastern and Western nations, even as aging populations, pandemic early retirements and long-covid cases skew labor-market demand and labor participation rates. As more men churn from the labor force, this increases social unrest and crime, among other things.
Inflation has risen the cost of healthcare and the toxic intersection of lower fertility rates, immigration woes, retraining ineptitude, technological automation and aging populations will mean worker productivity won’t enable unending GDP Growth. Namely, the quality of life of the middle class will continue to decline rapidly.
The debt burden of higher student loans has already degraded the mental health of GenZ, who enter a somewhat fractured labor force, somewhere between remote work and forced RTO, or return to the office. It’s disjointed enough for them not to be planning on getting married to having kids.
Countries need a fertility rate of 2.1 to maintain a stable population, in the absence of immigration. A lot of places like Japan, China and South Korea are’t exactly known to be immigration friendly. The economic pain that these places will face in the next decade are how civilizations collapse.
American psychologist William James (1842-1910) said that war brings on common purpose, social cohesion and camaraderie, inspiring patriotism (popular support). But what does a demographic winters and technological automation that heightens the sense of economic inequality in the world bring? It will bring massive unrest, revolution not just fringe populism, dictators and authoritarian regimes.
We used to fear overpopulation but what about under population and demographic population pyramid inversions? Young people aren’t even getting married or dating, never mind having kids.
According to Statistics Korea, the average number of expected babies per South Korean woman over her reproductive life decreased from 0.81 in 2021 to 0.78 in 2022. In China it’s been even worse. In the U.S. the decade over decade decrease is just scary. And it shows you how populous countries like India, Nigeria, Indonesia and Brazil will have so much more weight in the future.
The demographics winter is a significant drop in human fertility, a raging individualism, a cut-throat monopoly capitalism and a lot of people over 70 enjoying the last years of human luxury. It could be the beginning of a dark age for human global civilization, with or without a geopolitical confrontation between the U.S. and China.
Lower Fertility rates
Higher percentage of people over 60 of the total population
Labor force participation rate declines
Labor supply-demand dislocations
Technological automation
Increasing wealth inequality
Increasing civil unrest, mistrust in Government and corruption of democracies
More global wars
Environmental issues and water scarcity, among other things.
I could find you graphs about inflation, economic inequality, labor force participation rate declines and how Americans are running out of money, in debt and have burned through their emergency savings but it’s all so obvious.
The problem is how it all converges with a demographics winter, real declines in productivity, geopolitical conflict and increasing wealth inequality and the systematic destruction of the middle class. This is bigger than politics or economics, this about the battle of the hope for the future.
So what happens in such a future plagued by things like a demographics winter and technological automation and the decline of the Middle Class? The Washington Post once even mentioned that declining fertility will lead to population decline, which in turn will result in international instability. Nations will be tempted to grab neighboring populations similar to their own. And that’s only part of the problem.
Your water is my water! Your people are my people! That indeed would be dystopia. The problem? All of this is actually coming.
True, true.
But maybe things could work out better? Yes, drones could be used to hunt down the population (so that we end up with the kind of dystopian future portrayed in the Terminator movies), but managed properly they could instead be used to protect a country’s borders and keep its population safe.
Here are some points I thought of that could mitigate the demographics winter.
1. The 0.78% rate is somewhat eugenic since it’s the more attractive and wealthier people that tend to have children.
2. Robots and AI will take many jobs in manufacturing, farming, retail, security, and business. Managed well, this could create enough wealth to take care of the demographic bump of old people.
After that populations may start to rise as there will be more room. Every big family could have a farm.
3. The move to big cities has left many old people isolated without much social support. Ideally, abandoned villages could be made into retirement communities. There, old people could be be housed, fed, and given light work at a fairly low cost.
4. Worthy couples could be encouraged with various incentives to have large families; ideally with provisos that prevent the program from having a dysgenic effect.
On the other hand, the implementation of ideas like these would depend on good and effective leaders who want to help their native populations, and these seem to be in short supply.
Thanks Michael for your interesting thoughts.
Winter follows, Spring, Summer and Autumn - if we equate these seasons as ones for rapid growth, cultivation and harvest, it then follows that Winter is a time for rest and slow down. There are a number of Advanced Economies from Japan to Spain (I have lived in both), which are experiencing very low levels of fertility and rapid ageing.
Are these countries facing armageddon? No, but they do have slow growth, high state indebtedness and rural depopulation. Its not great, but its also not terrible.
We don't know the likely impact of AI, but I do feel positive about the initiatives being put in place in both of these countries, with more focus on child well being (Spain), health of labour force (Japan) and longer employment (Japan) - that suggests things are going to work out.
Finally on your point on populations being claimed by neighbouring countries, was that a driving factor for Russia's invasion of Ukraine? Could we foresee a situation where Chinese young people under the age of 30 cannot travel overseas (in case they don't return) and worst of all state sponsored human creation, a dystopian future is possible, but also a benign one too. Alas, we are unlikely to still be alive to see what happens.