By Michael Randle
The world’s most populous country – China – has now learned what other countries have experienced over the last decade or so; a population decline of massive proportions. Just about every developed country is going through this reduction in people; residents.
China’s population was slammed dramatically after decades of the one-child policy to reduce population gains; years-long decline in births. We have been to China. No one we spoke to agree with the one-child policy. That policy was loosened a few years back.
It’s economy, however, is now suffering. In 2022, 9.56 million births were recorded in China; 10.4 million people died and that does not include those who retired from the workforce, which estimates range from 40 million to 60 million a year currently.
The U.S. is in the same boat. Every day, on average, over 10,000 people retire in this country. Only about 700 turn working age, according to the federal government, each day. That’s a loss of more than 9,000 from the workforce on any given day in the U.S.
So, why is this important? It’s simple and we caught it and understood it in 2013. Demography is the greatest indicator of a growing or slowing economy. The more people in the workforce, the larger the labor shed, the larger the tax shed and without a growing population, nations’ economies have few answers on how to grow.
Then again, it’s not a really bad thing if government officials recognize the population shifts. Most of the European countries have seen population declines for a long time. Yet, they adjusted their economies to such. The U.S. and China’s economies remain based on GDP growth. Not so much in Europe.
You see, here is the rub. Both China and the U.S. base their nation’s budgets on the previous generation when it comes to taxes, etc., for taking care of their parents, grandparents and their lives at old age. With a declining population, how is that model going to work? It won’t.
How do you solve the problem? That issue is also very simple. The U.S. as well as China – the two largest economies in the world — need to incorporate a legitimate immigration policy where those who come here or there are welcomed, vetted, and are immediately placed into the workforce because that is why, for the most part, they are coming here in the first place. With birth rates at all-time lows in both countries, there are no other solutions.
Look, you can blame whoever you want for the surge in migrants to the U.S. Southern border. Yet, you should put the blame on those who made them migrants or refugees in the first place in their previous countries. Those folks just want a better life. With the proper vetting, we need them so much to add to our labor force. It’s not political. It’s just math.