Only a conservative bastion like the WSJ would describe a declining fertility rate as a crisis: "The root cause of most of our problems is our declining fertility rate."
That's true only if we accept the model where growth must be constant and unending. Doctors call that cancer, but economists call it healthy growth.
How is it that all these intelligent people don't understand that population growth cannot be constant and perpetual? That eventually we run out of land to put all those happy consumers?
I didn't read it that way. I read it as "the crisis of our current economic structure is rooted in demographic trends". One way to avoid problems is to push the fertility up, as discussed in the article. The other way, not discussed there, is to change the economic system. I wouldn't begrudge the author exploring just one possibility out of two, the one he believes to be more likely.
Also, it would be better if you skipped the adhom, and addressed the argument directly. It always leads to a more polite, more constructive conversation, the likes of which we all prefer to see here on Hacker News.
Actually they're getting crushed by lousy spending and monetary policy, and regulations that dampen local competition. The next leg down for Japan will, however, be demographic, as retirees turn the nation's savings rate negative and the bills for the past 20 years come due.
It's a crisis because the ratio of workers to retirees has been almost flipped on its head. by 2030 two individuals payroll taxes (SSI, medicare) are supposed to support each retiree, down froma opstware ratio of about 16 to 1. That means either benefits have to be slashed, or taxes on the employed have to soar. In practice there's a bit of both and more savings from reducing waste, but there's still a big gap to close. The boomers were a big generation, but they had far fewer children than their parents and lived far longer. This is a pattern that has already appeared in many other countries.
You'll see movement on immigration reform this year, because it offers the best way of correcting these imbalances without massive tax hikes or benefit cuts, and and can get us through the hump to a longer-term population equilibrium after 203 or so. See this elegantly-explained summary of the issue: http://www.ssab.gov/documents/immig_issue_brief_final_versio...
Your concerns implicitly depend on productivity per worker remaining constant over time. As that is not true, it's not clear that the changing retiree to worker ratio is as big a problem as you claim.
Wages have not risen in proportion to the worker:retiree ratio, nor have revenues since things like payroll taxes are capped. Many productivity gains are the result of capital investment and automation and are thus captured by the employer.
I'm afraid that's because the wages are linked to cost of living, rather that outcome. Even software developers with some serious pricing power on today's market are often reluctant to switch jobs unless they can't afford something "essential", be it simple rent increase, or another Hawaii trip. I call this "tragedy of employment" - people being paid at cost rather than value.
One solution to that problem might be replacing payroll tax with another tax that is closely correlated with productivity rather than wages.
>Wages have not risen in proportion to the worker...
Employers are paying more per worker except on the lowest tier, it's just that the increases have all gone into paying greatly increased health insurance premiums.
For unskilled labor wages haven't gone up because the job market was flooded with ten million illegal aliens. That's just a question of supply and demand.
> You'll see movement on immigration reform this year, because it offers the best way of correcting these imbalances without massive tax hikes or benefit cuts ...
Yes, I agree, but that doesn't address the population-growth issue, it only relocates it. I agree that immigration policy needs to change, but it's only a stopgap measure -- it kicks the can down the road. Someone else will have to deal with catastrophic overpopulation.
But you don't need endlessly growing population. If the fertility rate stays around 2.1 (IIRC) then eventually you end up with an equilibrium, where gains in lifespan can be offset by gradual increases in the retirement age. You don't need endless growth; if you look at the paper I linked to you'll see that they expect things to settle down to a steady state.
World population is expected to stabilize at around 9bn by 2050. The UN's millenium development goals are succeeding extremely well, eg a 50% drop in under-5 childhood mortality (from 12m/yr to 6m/yr) over the last 20 years. That sort of thing is a great constraint on fertility.
> You don't need endless growth; if you look at the paper I linked to you'll see that they expect things to settle down to a steady state.
Yes, but it's that "steady state" that the WSJ article is complaining about. To a system reliant on growth, the end of growth is a catastrophe.
> World population is expected to stabilize at around 9bn by 2050.
That would be nice, but I doubt it will happen. I suspect those who make such predictions underestimate human reproductive fervor, for lack of a better term.
I was more annoyed that he didn't see immigration as the answer. If we can't expect more immigrants from Mexico, we can still welcome millions from India and Africa.
That's true only if we accept the model where growth must be constant and unending. Doctors call that cancer, but economists call it healthy growth.
How is it that all these intelligent people don't understand that population growth cannot be constant and perpetual? That eventually we run out of land to put all those happy consumers?