Taps Coogan – February 5th, 2024
Enjoy The Sounding Line? Click here to subscribe for free.
The following map, via Michael A. Arouet, highlights the forecasted change in working age populations around the world until 2050:
While it may not be entirely intuitive at first, as we have seen in Japan for 20 years, and more recently throughout Europe, countries with shrinking working age populations rarely experience significant real GDP growth, per-capita productivity growth, or per-capita wealth increases. There are a number of reasons for this, but chief among them is the fact that these populations are not only seeing their working age population shrink, their retired populations are also growing rapidly. That worsening dependency ratio – the ratio between the number of people working and those receiving benefits, means an ever increasing portion of society’s productive output is diverted towards entitlement programs. With that shift comes an ever increasing pressure to raise taxes on remaining workers to support wealth transfers.
The future belongs to countries with growing, youthful populations and not to the countries that have chosen not to sustain themselves into the future, which includes all of East-Asia, China, Russia, Japan, and Europe, etc…