Sweet Posted June 11, 2022 Share Posted June 11, 2022 (edited) The birth rates in the West are about 1.5 - 1.6. The rest of the world is following. If this results into a declining population, which is already the case in some developed countries, it could become a major secular headwind. Is it a predicator of future economic performance? Should investors consider it? Edited June 11, 2022 by Sweet Link to comment Share on other sites More sharing options...
maplevalue Posted June 11, 2022 Share Posted June 11, 2022 Great trend to consider long term. In the declining population scenario housing is particularly at risk outside of urban centres. Just look at Japan https://www.vice.com/en/article/88nxkx/japan-abandoned-homes-akiya. On the other hand, there is good reason to believe life expectancy could dramatically increase in the years ahead which would soften the effect of declining birthrates (https://www.youtube.com/watch?v=nnnXVUWlTkI). Link to comment Share on other sites More sharing options...
Spekulatius Posted June 11, 2022 Share Posted June 11, 2022 34 minutes ago, maplevalue said: Great trend to consider long term. In the declining population scenario housing is particularly at risk outside of urban centres. Just look at Japan https://www.vice.com/en/article/88nxkx/japan-abandoned-homes-akiya. On the other hand, there is good reason to believe life expectancy could dramatically increase in the years ahead which would soften the effect of declining birthrates (https://www.youtube.com/watch?v=nnnXVUWlTkI). You dont have to go to Japan- same is true in many rural areas in Europe. You can buy houses there dirt cheap. The village I grew up with had population of 1200 when I was born and has below 900 now. The same thing happens in many places, countries in Europe and even in the US. This is due to compounding effect of demographics and people (like me) moving away. Link to comment Share on other sites More sharing options...
bizaro86 Posted June 13, 2022 Share Posted June 13, 2022 On 6/11/2022 at 7:43 AM, Spekulatius said: You dont have to go to Japan- same is true in many rural areas in Europe. You can buy houses there dirt cheap. The village I grew up with had population of 1200 when I was born and has below 900 now. The same thing happens in many places, countries in Europe and even in the US. This is due to compounding effect of demographics and people (like me) moving away. I wonder if there will be a tipping point on stuff like that though? A row house in the biggest Canadian cities goes for $1MM, whereas in small towns a detached house is 1/10th of that. Once everyone has Fibre internet it seems like the career advantage of the cities might be smaller, and some people might think saving 10x their salary on house prices is a good deal. Link to comment Share on other sites More sharing options...
no_free_lunch Posted June 13, 2022 Share Posted June 13, 2022 (edited) 59 minutes ago, bizaro86 said: I wonder if there will be a tipping point on stuff like that though? A row house in the biggest Canadian cities goes for $1MM, whereas in small towns a detached house is 1/10th of that. Once everyone has Fibre internet it seems like the career advantage of the cities might be smaller, and some people might think saving 10x their salary on house prices is a good deal. I would sure think so but the reality it just hasn't happened yet despite making a lot of sense for years. I know in my case, despite having a job that is very easy to do remotely, there are still requirements about in office work that make moving to a small town not practical. I think too, that kind of lifestyle is a huge change and while there will be some who will go for it, most prefer the amenities of the larger centers. Regarding the post in general, I think it is indeed a huge problem. However, there are mitigating factors as well. Countries such as the US and Canada are going to do better than others due to the larger amount of immigration we have. There is also going to be a shift in retirement age to later, there will just have to be. I don't know exactly how that all plays out but the market will find a way to push aging workers back in. Could be via inflation hitting the value of government benefits, stock / real estate crash hurting those who have saved, pension defaults, there are many possibilities. At any rate, in this day and age, while 65 is a great retirement age and is something I aspire to (or earlier), I also know people who have worked to 80. With white collar work retiring at 65 doesn't make as much as sense as it used to. Even less so if there is a shortage of workers. Edited June 13, 2022 by no_free_lunch Link to comment Share on other sites More sharing options...
flesh Posted June 13, 2022 Share Posted June 13, 2022 If it's a problem, we will selectively allow more immigrants. Poor places get poorer from brain drain. It could get worse though considering 20% of gen z identifies are various genders that aren't as likely to produce offspring. Link to comment Share on other sites More sharing options...
longlake95 Posted June 13, 2022 Share Posted June 13, 2022 On 5/20/2022 at 6:27 PM, Blugolds11 said: Assuming investors gender...Oh here we go..... 2 hours ago, flesh said: If it's a problem, we will selectively allow more immigrants. Poor places get poorer from brain drain. It could get worse though considering 20% of gen z identifies are various genders that aren't as likely to produce offspring. I just learned over the weekend what a Fury was. My son has a couple that go to his school. The demographics looking forward look dismal. 1 Link to comment Share on other sites More sharing options...
Sweet Posted June 13, 2022 Author Share Posted June 13, 2022 (edited) 2 hours ago, flesh said: If it's a problem, we will selectively allow more immigrants. Poor places get poorer from brain drain. It could get worse though considering 20% of gen z identifies are various genders that aren't as likely to produce offspring. Worrying trend, not only for demographics, but in terms of being able to have a conservation with people around facts. Factually there is no basis for this gender nonsense. An ideology riddled with contradictions and refuted by basic observable biology. Edited June 13, 2022 by Sweet Link to comment Share on other sites More sharing options...
tede02 Posted June 13, 2022 Share Posted June 13, 2022 This is a topic I'm very interested in. Musk has also been vocal about it recently. In the US at least, based everything I've read, we're probably still 20-30 years out from it becoming very noticable. Immigration is still high enough to keep growth positive albeit not by much. I believe the labor shortages we're seeing now are a glimpse of what we can expect in the future. I won't be surprised to see these problems temporarily wane as the pandemic fades and the Fed purposely pushes unemployment up. But it is a FACT that the population is aging which will continue to create labor shortages at a gradually increasing rate. Long-term (say 50+ years out), declining population growth seems like an economic time bomb. As mentioned by others, just go to towns in rural areas that have lost people over the years. What do you find? Loads of empty houses, buildings and storefronts (and therefore cheap real estate). Imagine the strain this will put on retirement plans, entitlements and local government revenues (which fund infrastructure, etc.). It looks like a very tough picture. I think this is why the Chinese leadership have basically panicked with respect to their family planning policies. Everything I've read about countries that have tried to incentivize more births has concluded these polices don't work. The impact is at the margins. As a parent with two kids under 6, I can see why this is an unstoppable trend particularly in advanced economies. My kids are great. I'm lucky they are healthy. But raising kids is extremely time consuming and expensive. Child bearing has gone from being a necessity in an agrarian society to what amounts to an economic burden in an advanced economy. For women in particular, having kids is not a recipe for career advancement. It's just a brutal reality. The one upside to peak population is it probably helps some of the environment challenges the world faces. Link to comment Share on other sites More sharing options...
Dinar Posted June 13, 2022 Share Posted June 13, 2022 As a father of three, if society wants people to have more children, it should make it easier. There should be high quality public schools for starters. NYC spends $40K per pupil per year and schools are awful. Similarly, we need good trade schools and good public universities that are are cheap. Not like University of Maryland today at $50K per annum. Also, change colleges/universities as well as school calendar to five weeks vacation and 47 weeks of school. Very big problem of what to do with kids during the summer and winter breaks. Also, university should not be 12 week autumn and 12 week spring semester. Do 4 12 week quarters per year, and condense college to two rather than four years. Cut welfare and social programs, in many areas of the country, like NYC, a single mother needs to make $150K per annum before she makes more money working rather than sitting on welfare. The higher the taxes to support the welfare state, the fewer kids normal taxpayers will have. Link to comment Share on other sites More sharing options...
flesh Posted June 14, 2022 Share Posted June 14, 2022 "a single mother needs to make $150K per annum before she makes more money working rather than sitting on welfare" Elaborate, this is news/surprising to me. Link to comment Share on other sites More sharing options...
Dinar Posted June 14, 2022 Share Posted June 14, 2022 18 minutes ago, flesh said: "a single mother needs to make $150K per annum before she makes more money working rather than sitting on welfare" Elaborate, this is news/surprising to me. There was an article in the Economist about a decade or so ago based on a study done by a think tank. Basically, if you do not work you get: free housing, free healthcare - Medicaid, free food, free/subsidized internet + utilities, welfare. Add it all up. I am sure some basic googling will get you there. Also, if you work you need to pay for childcare. Link to comment Share on other sites More sharing options...
TwoCitiesCapital Posted June 15, 2022 Share Posted June 15, 2022 23 hours ago, Dinar said: There was an article in the Economist about a decade or so ago based on a study done by a think tank. Basically, if you do not work you get: free housing, free healthcare - Medicaid, free food, free/subsidized internet + utilities, welfare. Add it all up. I am sure some basic googling will get you there. Also, if you work you need to pay for childcare. Yea. I remember seeing a case study or something talking about "cliffs" that provide disincentive for you to try to better your economic position also 7-10 years ago. It focused on single mothers in Pennsylvania. IIRC, they would have to be paid $75k+ to have an economic incentive that exceeded their current welfare benefits (post-tax) and I don't think it considered the cost of childcare if the mothers went to work. How many single mothers are going to be qualified enough to land a job that is the median INCOME for two-earner families? The whole point of the case study was to point out various "cliffs" that provide disincentive to get off welfare because the moment you earn $1k more you lose like $5-10k worth of benefits. Link to comment Share on other sites More sharing options...
Luke Posted May 23, 2023 Share Posted May 23, 2023 On 6/13/2022 at 4:59 PM, tede02 said: As a parent with two kids under 6, I can see why this is an unstoppable trend particularly in advanced economies. My kids are great. I'm lucky they are healthy. But raising kids is extremely time consuming and expensive. Child bearing has gone from being a necessity in an agrarian society to what amounts to an economic burden in an advanced economy. For women in particular, having kids is not a recipe for career advancement. It's just a brutal reality. I have been thinking of this today, there is a trend from quantity to quality in getting kids. As you said, if you live on a farm, having 4 Kids is no problem and rather necessary. If your child needs to have a PHD in computer science to have a nice life, people wont get 4 kids but bet more on a single horse. University is very expensive and in an economy where the jobs become more and more specialized the length of education will go up further. The picture further out looks difficult, higher life expectancy is to be expected but also more automatization. How much this will affect the declining birthrates effect on the economy remains to be seen, maybe even a net 0 in total. Having kids is not an 18 year project anymore, at least not in higher education. They need 23-25 year support at least when finished with masters, maybe longer depending on speed in the programs or eventual gap years. Very expensive and time intensive. Then also cultural trends are a problem as some pointed out here. Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 23, 2023 Share Posted May 23, 2023 Couple of other things .... Ghost towns are the 'norm' - not the exception; every time a mine is played out, a material employer closes, a natural resource is depleted (trees, fish, etc.), an existing technology is made obsolete (family farm, etc.); we just don't like to recognize that change is inevitable. The whole sustainability, reduce/reuse/recycle movement is a counter-culture reaction; produce sustainably, and there will be a lot less of this. A Canada routinely has more job openings that it has applicants, often because of skills mismatch; stability is enhanced under combined automation and immigration, but it means a very different looking Canada. Canadian culture adapts with the changing times (breathes), and diversity demonstrate its promise; not a bad thing. But in a China/India with a lot of young people in need of a job, automation = mass unemployment = civil unrest = repression; add the mass migration of climate driven change and you get the next crop of Stalin's, Hussein's, Marcos, etc. Great for the weapons and drug businesses, not so much for everyone else. Yeast in a diminishing sugar solution rapidly dies, as the food runs out and level of toxicity(alcohol) increases. In human terms; lower birth rates as kids cost more/start later in life, and higher death rates from both climate driven change and poorer health. Humans are not special, however we're at the top of the food chain because we are the most adaptable. Point? This plays out differently, dependent upon where you live, and if you are able ... you migrate to where the grass is greener. Obviously, the more of that greener grass in your neighborhood, the better off you will be. SD Link to comment Share on other sites More sharing options...
Luke Posted May 23, 2023 Share Posted May 23, 2023 1 hour ago, SharperDingaan said: Couple of other things .... Ghost towns are the 'norm' - not the exception; every time a mine is played out, a material employer closes, a natural resource is depleted (trees, fish, etc.), an existing technology is made obsolete (family farm, etc.); we just don't like to recognize that change is inevitable. The whole sustainability, reduce/reuse/recycle movement is a counter-culture reaction; produce sustainably, and there will be a lot less of this. I often get the feeling that the ,,sustainability,, slogans of business are often to the disadvantage of the consumer. You can now RENT your shoes: https://www.on-running.com/en-de/stories/cyclon-or-how-our-subscription-service-works Instead of buying good year welted shoes that can be repaired and worn for 20 years, you pay 30€ a month to get multiple shoes a year...but its sustainable!! Its just a pro business move disguised as sustainable. What would be really sustainable are easy to repair products, high quality long lasting products. Some kitchen tools of my grandparents still do it after 60 years. I wonder how the average amazon kitchen item does here... 1 hour ago, SharperDingaan said: A Canada routinely has more job openings that it has applicants, often because of skills mismatch; stability is enhanced under combined automation and immigration, but it means a very different looking Canada. Canadian culture adapts with the changing times (breathes), and diversity demonstrate its promise; not a bad thing. But in a China/India with a lot of young people in need of a job, automation = mass unemployment = civil unrest = repression; add the mass migration of climate driven change and you get the next crop of Stalin's, Hussein's, Marcos, etc. Great for the weapons and drug businesses, not so much for everyone else. It for sure creates a lot of tension potential 1 hour ago, SharperDingaan said: Yeast in a diminishing sugar solution rapidly dies, as the food runs out and level of toxicity(alcohol) increases. In human terms; lower birth rates as kids cost more/start later in life, and higher death rates from both climate driven change and poorer health. Humans are not special, however we're at the top of the food chain because we are the most adaptable. Chomsky began with an anecdote about a debate years ago between two colossal figures in their respective fields — astrophysicist Carl Sagan and biologist Ernst Mayr — about the likelihood of finding extraterrestrial intelligence anywhere else in the universe. Sagan concluded it was highly probable intelligent life should exist elsewhere, given the number of planets in the cosmos similar to Earth. Mayr, however, said that by looking at Earth as an example, he had concluded it’s unlikely humans would find other intelligent species elsewhere. Species that are successful over a long time, he said, are those that mutate very quickly, like bacteria, or those that keep to a fixed ecological niche, like beetles. As you move up the scale of intelligence, success is less likely. The history of life on Earth, Mayr essentially concluded, refutes the claim that it’s better to be smart than stupid. 1 hour ago, SharperDingaan said: Point? This plays out differently, dependent upon where you live, and if you are able ... you migrate to where the grass is greener. Obviously, the more of that greener grass in your neighborhood, the better off you will be. SD It looks like that further ghettoization is the trend... Link to comment Share on other sites More sharing options...
SharperDingaan Posted May 23, 2023 Share Posted May 23, 2023 There is a big difference between very smart (fragile) and very adaptable (anti-fragile). As a species we're even more adaptable than venereal disease and cockroaches, both of which have proved near impossible to completely wipe out, and hence are everywhere! The ghetto thing is a good example; no matter your might, it is near impossible to peacefully keep people in a ghetto under worsening conditions; they riot, they cut off heads, they storm national capitals etc. and with a little manipulation - overthrow the existing order. They adapt ... the 'authorities of the day' pay the price .... and they call in tomorrows dictator to put the disruption down. Following which there are a rash of terminal 'accidents'; time at the top is a limited term engagement. Adaption. SD Link to comment Share on other sites More sharing options...
Luke Posted May 23, 2023 Share Posted May 23, 2023 3 minutes ago, SharperDingaan said: There is a big difference between very smart (fragile) and very adaptable (anti-fragile). As a species we're even more adaptable than venereal disease and cockroaches, both of which have proved near impossible to completely wipe out, and hence are everywhere! The ghetto thing is a good example; no matter your might, it is near impossible to peacefully keep people in a ghetto under worsening conditions; they riot, they cut off heads, they storm national capitals etc. and with a little manipulation - overthrow the existing order. They adapt ... the 'authorities of the day' pay the price .... and they call in tomorrows dictator to put the disruption down. Following which there are a rash of terminal 'accidents'; time at the top is a limited term engagement. Adaption. SD Yes, we are extremely adaptable because of our intelligence and technology. But we are not as difficult to be wiped out like a virus or some insects. So i get your point Link to comment Share on other sites More sharing options...
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