Growing Up

California could be sitting pretty according to the Motley Fool’s The Most Important Numbers of the Next Half Century which says “Age distribution is hardly the end-all driver of future growth, but it plays an important role.”  The article attributes much of Japan’s economic stagnation to demographic trends,

“Japan’s aging population has created a demographic brick wall that has kept economic growth low for the last two decades, and will likely worsen for more to come.”

It goes on to compare the population shares of the working age and the over-65 cohorts of the leading industrial economies in 2012 and 2050 (see tables from the article below to which I added California data).

The U.S. economy looks relatively good in 2050 with “one of the lowest percentages of elderly citizens, and one of the highest rates of working-age bodies among large economies.”   If this is the case, then based on the most recent projections of the Department of Finance, California will be in slightly better shape in this regard than the nation as a whole as well as the other leading economies mentioned.  Of course, this doesn’t mean that there aren’t other states whose populations will outgrow California over the next several decades.

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4 Comments

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4 responses to “Growing Up

  1. I am so glad that I don’t pay for the Motley Fool. One need only compare Germany at 21% with Japan at 24% to see that something very different is going on–like Japan’s stock and property bubbles of the 1990s.

    There have been a spate of these articles over the last few years, and I get the feeling that the 1% is desperately afraid that the rest of us will not reproduce in sufficient numbers to maintain the reserve army of the unemployed. But two things will happen if there aren’t enough workers: really unproductive jobs (Dean Baker uses the example of the night clerk at the 7-11) will disappear, and wages will increase (supply, demand, that stuff).

    So for the non-elite, fewer workers can be a distinctly good thing. In fact, I have this really fun vision of the international working class refusing to have any more children until our conditions are improved.

    • prado

      Fewer workers means working age people paying more taxes to cover the costs of a growing number of retiring baby boomers. California, like Texas, will benefit from its large legal resident and U.S. citizen Hispanic populations that are younger than average and are in their child bearing/family establishment phase now.

      • But if you have fewer workers, their wages are higher (particularly if you stop doing things that keep them artificially depressed), so while the tax burden is higher, so are the wages on which they are based.

    • Eric

      Maybe less a refusal, and more an inability to afford – the end result is the same, either way.

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