Friday, January 8, 2016

Populations of Young Are Declining Worldwide (Except Africa)...Masked by Old Living Far Longer (Except Africa)

The global economy and global finance demand and require massive growth to allow for the huge debts to be serviced and excess to be created above and beyond expenses (aka, profit).  But a massive wrench has been thrown in the works.  The segments at the bottom of our population have ceased growing.  If you don't have population growth coming, the only means for growth are higher wages, less saving/more spending, and/or more credit.  All of the later mentioned means of growth have pretty much run their course.

So let's explore the demographics for now.  If you want to know if a population is truly growing or simply growing older...let's look at the annual 0-5yr/old global population vs. the total annual population (chart below).  Both segments grew from 1950 until 1990...but since 1990, the 0-5yr old population has been flat-lining while the total global population has been soaring.  So, shocker, people are living fact, nearly all population "growth" since 1990 has been people living longer, not any increase in the numbers of young.

The chart below again highlights the relative dearth of growth in the population of the 0-5 year olds (aka, babies/toddlers).

And below is how that looks annually averaged over the different periods.  And like so many government tricksters, all the growth is in the far out years to balance out the declines over the next 15 years.  I'll definitely take the under on that and guess 2030-2050 looks more like 2016-2030.  For those curious what depopulation (from the bottom up) looks like, the linked article showing Japan, Germany, and China may be of interest here or more broadly here

But what if we break it down between wealthy OECD nations and the RoW (rest of the world).  OECD 0-5yr/old population is essentially unchanged from 1950 and not estimated to grow (at all) through 2050.  Significant population growth took place in the RoW from 1950-1990, but even this engine of growth has essentially shut down.

Unfortunately, I have more bad news.  Population growth of the young stopped long ago in China, Brazil, and even India now.  The only source offsetting these strong negative birthrates is the massive baby boom on the poorest continent...Africa.  Africa's birthrates in nations like Nigeria, Uganda, etc. are running at 7 children per female of child bearing age.  This is simply sad and a catastrophe both on a human level and from an economic standpoint.  So, the net/net is that population of young is falling significantly, pretty much on 5 of the 6 inhabited continents of the world.

What I'm showing is that a system that can only function based on growth has lost the most critical growth of all...population.  While the population may continue to grow older (see the chart below), it is not truly growing larger when viewed through the footprint of the youngest among us. 

For those who think the US is immune to these troubles...probably should see what the US Census has to say about that based on their updated 2012 and 2014 projections, here.

The chart below actually shocked me when I made 1950 there were 10 babes (0-5) in the world for every "very old" person (75+ years old).  Amazingly, the estimations show by 2050 there will be as many 75+ year olds in the world as babes.  "We're going to need a bigger boat" to handle what's coming our way.

***All data for this article is from the OECD which compiles both historical data and makes future estimates.  This data is among the most reliable of all economic data.