So Much Money, So Few Workers

The Great Reversal, part 2

In “Mother Blue’s,” Ray Wylie Hubbard sings about his dearest wishes as a young man—having a stripper girlfriend and a gold-topped Les Paul guitar.

Then he adds:

“Be careful what you wish for, you may git’em.”

That line comes to mind whenever I think about the hard stop coming toward the Money People. Today, after half a century of having the ball and marching up and down the field against those who labor, the Money People have just about everything they ever wished for.  Start with most of the money in the world.

But they are about to start losing the game. The people who work for a living, which is most of us, are about to stage an amazing comeback.

This won’t happen due to brilliant political leadership. We don’t have any.

It won’t happen because “the arc of the moral universe is long, but it bends toward justice,” either.

It will happen because of decisions made by ordinary people around the world about sex. More specifically, it will happen because of decisions about whether to have children. And then, how many children to have.

If any.

The power of demography

The balance of power between the Money People and workers will change because of demography. It happens to be the only future that’s mostly known because the people have already been born and counted.

Let’s start with China. If the opening of commerce with China unleashed hundreds of millions of low-wage workers on the world in 1971 and suppressed the wages of American workers for decades, that “supply chain” is now drying up. China is one of the most rapidly aging nations in the world. Deaths appear to outnumber births.

The fertility rate in China (the number of children born per woman) is well below replacement rate. It is similar to the birthrate in some of the most rapidly shrinking nations in Europe. According to World Bank data, for instance, the birthrate in China is now 1.7.

That’s significantly below the rate needed for a stable population, 2.1.  But it’s in the ballpark with Italy (1.3), Germany (1.5), the Netherlands (1.6) and France (1.9). In fact, other sources indicate that the total fertility rate in China is even lower, closer to the 1.3 rate that prevails in Italy and Spain.

In a recent article in the Global Times, demography expert Huang Wenzheng noted that if the current trend in China continues, “It will be like the population is jumping off a cliff.”

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Watch the consequences of low birth rates with these simulation tools.

Institut National D’etudes Demographiques

https://www.ined.fr/en/everything_about_population/population-games/tomorrow-population/

Vizhub: Population forecasts

https://vizhub.healthdata.org/population-forecast/

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Worse, the now abandoned one-child policy has led to a large excess of males, men who are unlikely to ever find women to marry. We are not talking about small numbers here. We’re talking about millions of men. Enough to cause significant social instability. (India, by the way, faces the same gender imbalance problem even though its fertility rate, at 2.2, is nominally above replacement level.)

The Fate of Vlad the Restorer

If demography is working to reduce the economic threat China presents, a declining birthrate and population are working to reduce the military threat Russia presents, too. Vladimir Putin is trying to do what Russian leaders have been doing since Peter the Great — restore the identity, cultural independence and security of Russia.

But Putin is presiding over a shrinking nation that has suffered more than a century of turmoil, upheaval and gross suppression of human rights. The result is a birthrate of 1.5 and a huge life expectancy gap between men and women as men die “deaths of despair” from alcoholism and suicide. (Examine our figures on deaths from drugs and alcohol, and you might come to the conclusion that we have more in common with Russia than we’d like to admit.)

While it would be easy to exaggerate the population issues facing Russia and forget that they still possess a formidable nuclear weapons capability, it remains that demography will make Russia, China and most of the nations of Europe more concerned with internal issues than we will be in the United States. The upshot here is that we are facing a global shortage of workers.

That’s a big deal.

Don’t get me wrong. We have our own, quite similar, demographic issues. Our birthrate is down (currently 1.7), and the future growth of the elderly population is going to outstrip the growth of workers. But we’re different.

You’ll see why in part 3.

Read part 1:

The Coming Great Reversal

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Photo by Victoria Borodinova from Pexels

(c) Scott Burns, 2021