Earth Population - Big Factor Towards Economy Growth

Did you guys watch Marvel’s Infinity War? Was Thanos right all along? Is our World doomed of overpopulation? There is a lot of talks that would suggest that the human society is close to the collapse because of the overpopulation myth. I would suggest that the contrary case is happening! I think we are currently at the peak. In fact if we think about it: People are waiting longer to have children, our average age is becoming higher and the society as it is right now is becoming older. Our economy is depending on more people as this means more workers and more consumers but if the numbers are not increasing, we could see our economy heading into hard times. In this article I want to discuss how we got into this situation and what the great reversal could mean for our global economy as well as the human society.

How Did We Got Here?

Let’s ask the question of how we ultimately got to the situation that we are in right now. Over the past century our population has literally exploded. One of the reasons were certainly the baby boomers after the second World War. This also meant that there were more workers, more ideas and more demand for technology. Our industries grew in a rapid pace and possibilities seemed endless. This is all rainbow and sunshine until the birth rates have been on a sharp decline.

Every developed country nowadays has a birth rate below replacement rate which is at 2 children per family. The average child per family is 1.5 which is very alarming. This means that the societies around the world are getting dominated by older people which is leading to before mentioned great reversal.

The ideal scenario is to have a pyramid structure in the demographics. The base would be the younger generations that are just being born or are going to school. The top is being occupied by the older generation who are retired and the middle is filled by the middle aged worker who is providing for the elders and their pension. This would work just fine as the top is defiantly fewer than the bottom which would allow the middle generation to build some wealth on their own.

The problem comes now with the great reversal. Instead of a pyramid we will have a light bulb shaped demographic. This means that the numbers are getting flipped and the young base is only a small straw. Meanwhile the number of retired people is growing which adds more pressure on the younger generation to provide for them. This can not go well forever as the older generation is becoming older and the younger generation are becoming fewer. At some point there will be not enough workers left to provide for the elderly as well as not enough workers and great minds to fuel the economy growth.

Economic Impact

This brings us to the economic impact of such a development. A slower population growth or even decline leads to slower economic expansion. Less people that are less productive leads inevitably to less money. A great example is Japan which has this situation since the early 2000s. Their stockmarket is stagnant for the past 30 years.

A great temporary solution would be to allow young educated immigrants to come into the countries but many officials are saying that this would only push the inevitable problem back. The average birth rate of the entire globe is unfortunately not at a replacement level which is navigating us into the current situation.

Another great way of keeping the economy a float is to increase the worth of each human’s capital. This is what the developed countries are doing by increasing the education of the population as well as the automation level in their economy. This will translate into more effective labor and better ideas to tackle every day problems. We can see this in the manufacturing branches of almost every company. While a few years ago, on-line workers were heavily demanded, the machines are tacking more and more workload from their shoulders. Of course there will be always people needed that are doing the dirty work but the general consensus is going towards automation.

How To Brace Ourselves?

The remaining question now is: How do we prepare for this situation? First of all I would suggest to take care of your own retirement and not trust the retirement program of your government. As we already can see, the monthly retirement rates are declining and is also getting eaten up by inflation. There is just no way that the governments around the world are doing a great job with that. A great way to do so, is probably to invest into the S&P500 every month as historic data shows that over a 20years life cycle this index has never made a loss.

Once the basis is settled and set it is important to try and growth your portfolio or wealth in general. Technology will be very important in the future as well as renewable energies and crypto currencies. While crypto currencies and renewable energy companies are still in the beginning, many tech-companies are already established entities. It is important to pick the horses that you believe in and also understand their concept of revenue and profit. If a crypto project is just promising you an APY of 500% year over year without explaining their structure like you are 5 years old, then stay away from this project. On the other hand, if you understand what this project is doing and can also identify your own believes with this company, this can only mean one think: Go trough thick and thin with this project and you will guaranteed a great return on that.

With this being said, I am very interested to hear what your current projects are that you believe in. I would be also very happy about any feedback and suggestions from your side. Stay safe! 😊

Published by ga38jem on
Steemit
On 26th August 2022