Is Elon Musk Right About Global "Population Collapse"???
Elon Musk continues to suggest a population collapse is in store within a few decades time...and he is 110% correct if you make two caveats...1) focus on the young and potential child bearing populations and 2) look at the world excluding a single continent...Africa.
To begin, note the collapsing populations of young (0 to 15 years old) and childbearing populations (15 to 40 years old) across broad swaths of the greatest consumer nations on earth. Absent broad die-offs from war, pandemics, famine, etc.; population collapses begin from the decline of births that eventually work their way into declining childbearing populations.
East Asia (China, Japan, N/S Korea, Taiwan, Mongolia) childbearing population (blue line) and young population (green line), below.
Young, peaked in 1976 - declined by 138 million (32% decline) so far, projected to decline 259 million (61% decline) by 2100. This is based on the assumption of rising fertility rates...if they remain flat or fall further, the reality is likely to be far lower!?!
Childbearing peaked in 2005, declined by 96 million (14% decline) so far, projected to decline 357 million (54% decline) by 2100.
Europe (including Russia and Eastern Europe) childbearing population (blue line) and young population (green line), below.
Young peaked in 1965, declined by 48 million (29% decline) so far, projected to decline 78 million (46% decline) by 2100. Again, this decline is based on the assumption that fertility rates will do the exact opposite of the current reality and suddenly rise?!? If not, far lower births and resultant populations should be expected.
Childbearing peaked in 1989, declined by 41 million (15% decline) so far, projected to decline 105 million (39% decline) by 2100.
Latin America plus Caribbean (everything in Western Hemisphere but US/Canada) childbearing population (blue line) and young population (green line), below.
Young peaked in 2001, declined by 11 million (7% decline) so far, projected to decline by 74 million (44% decline) by 2100.
Childbearing set to peak in 2025 and projected to decline by 87 million (33% decline) by 2100.
North America (US/Canada) childbearing population (blue line) and young population (green line), below.
Young peaked in 1965, zero growth since '65, projected to grow by 9 million (14% increase) by 2100. I have detailed repeatedly why given current fertility rates, trends, and immigration patterns, this growth is highly unlikely and continued flat to outright declines should be the base case. Since 2007, US fertility rates have been in freefall and in 2018, the US hit a record low fertility rate of 1.72 and is still falling fast...with Canada even lower at 1.56. There is no sign nor logical rationale to anticipate a rise in fertility rates in North America.
Childbearing projected to grow 13 million (11% increase) by 2100. Again, this is premised on unrealistically high fertility rates and immigration rates above the current reality...this is also highly unlikely and near zero growth should be the base case.
ASIA (excluding East Asia) childbearing population (blue line) and young population (green line), below.
Young peaked in 2018, projected to decline 275 million (34% decline) by 2100. This is India, Pakistan, Vietnam, Thailand, Indonesia, etc. plus all of Western Asia (Iraq, Iran, Turkey, Saudi Arabia, etc.).
Childbearing projected to peak in 2038 and decline by 240 million (20% decrease) by 2100.
Africa childbearing population (blue line) and young population (green line), below.
Young projected to rise 400 million and peak around 2090!?!
Childbearing population projected to grow nearly 1 billion through 2100.
Since 1980, Africa has grown from 11% to 17% of the worlds total population
Since 1980, Africa has grown from 17% to 30% of annual global births
In 1989, annual global births (excluding Africa) peaked and have declined 15% since (and still falling)
The 3+ decade decline in global births (excluding Africa) has nearly (but not quite) been offset by increasing births in Africa
By 2023, the worlds childbearing population (excluding Africa) will be in indefinite decline...and only Africa's childbearing population will continue growing
A declining childbearing population (excluding Africa) with deeply negative fertility rates (excluding Africa) is highly likely to see births fall at an accelerating rate (far more than the gradual decline predicted by the UN)
However, over the past five decades, African income per capita has risen just 240% compared to Upper Middle income nations (China, Brazil, Russia, etc.) rising 950% and high income nations 410%...Africa is clearly losing ground
By the best proxy for true economic activity, energy consumption, suggests Africa has grown from just 2.4% to 3.6% of global energy consumption...and the future there is not brightening.
Africa's economic growth is dependent on global growth (x-Africa)...but with declining global markets for exports and significant overcapacity, Africa's export driven growth potential is very low
Lastly, Africa (particularly Sub-Saharan Africa where most of the population growth is occurring) has one of the lowest emigration rates of any poor region.
By 2030, Africa will be 22% of the worlds population, be 200% of annual growth among the childbearing population, and be responsible for 38% of global births...but still just estimated to be 4.6% of global energy consumption.
In short, when excluding Africa, births have already collapsed and due to the imminent decline in childbearing population, far larger declines (also known as collapse) are imminent
That is to say, Africa is all the growth in the childbearing population and births...but with minimal increase anticipated in energy consumption or global economic impact. There is essentially no transfer mechanism from the first world wealth to the poor of the third world nor is there a strong avenue for emigration. The global economy will impact Africa but Africa is very unlikely to impact the global economy. And as the UN noted recently, the end of global population growth is now in sight and the global population is likely to peak around 2100, under 11 billion persons (detailed here, HERE). The collapse of populations in East Asia, Europe, and Eurasia is already a done deal.
The Big Picture
Annual global population change, excluding Africa, peaked in 1988 and growth has decelerated since. However, growth really decelerates from here and is projected to end entirely by 2055...and global depopulation (excluding Africa) is the primary global feature there-after.
But focusing on the 15 to 65 year old working age population (x-Africa) which drives the global economy and consumption, the halving of growth in millions (and 2/3rds decline in percentage) is already in the rearview mirror. By 2040, global working age population growth is estimated to end entirely and a persistent decline (depopulation) among potential employees/consumers persists indefinitely there-on.
Why point all this out? Because it is the annual growth in the global childbearing population (excluding Africa, blue columns below) that drives demand, inflation, and the Federal Funds interest rate (yellow line). From 1950 to 1980, it was the accelerating rise in the childbearing population of potential consumers (above and beyond existing capacity) that pushed prices upward (more demand than supply) just as the Fed was hiking the cost of servicing debt (reducing growth in potential capacity). Then from 1981 to present, the deceleration of growth among the same population coincided with decelerating inflation (decelerating demand with accelerating supply from lower interest rates). The imminent declines in the same population will coincide with outright deflation (declining demand against a flat to potentially rising capacity thanks to a return to ZIRP or even NIRP).
15 to 40 year old population growth (as a %) versus federal funds rate, below.
Looking at the global childbearing population (excluding Africa, blue line below) versus 0-15 year old young (x-Africa, red line), the divergence is plain to see below. The total size of the two population sets were essentially identical in the late 1960's. However, outside of Africa, the global population of young is clearly in decline...and soon, the global childbearing population (x-Africa) will follow.
Below, the annual change in the global childbearing population (x-Africa, blue columns) and annual change in the global population of young (x-Africa, red columns) versus the Federal Funds Rate (yellow line). The shape of the rate curve should make more sense when matched against the real world changing demand of potential consumers. The rationale for rate cuts, ZIRP, and sooner than later, NIRP should also be clear as we are at the end of population growth driven demand increases. The onset of secular declines among the nexus of economic activity is inevitable and imminent. From a growth perspective, the sky has truly fallen...and will only continue to fall faster.
Broadening out to view the global annual childbearing population growth, world (excluding Africa, blue columns) versus Africa (red columns, below). The 90% deceleration of the annual growth of the childbearing population (excluding Africa) versus the doubling of the childbearing population growth in Africa has not resulted in rising economic activity.
Below, global births annually (excluding Africa, blue line) versus births in Africa (red line). Global annual births (x-Africa) peaked in 1989 and have declined by 17 million (-15%). Over the same timespan, annual births in Africa have risen 18 million (+178%). Trading a poor soul for a relatively wealthy soul (essentially a 1:1 population trade but a 90%+ downgrade in purchasing power) ultimately means global consumption is in big trouble, as rate cuts and debt burdens have reached their full potential.
Africa consumes 3.6% of the total global primary energy supply. From 1980 through 2016, Africa's portion of global energy consumption has risen from 2.4% to 3.6%.
Below, 1980 through 2016, year over year change in global total primary energy consumption. World consumption (excluding Africa, blue columns) versus Africa (red columns). The deceleration of global annual growth with little to no offsetting demand growth from Africa is clear.
As growth ends among the world (x-Africa) and shifts solely to Africa, the differential and disparity of income per capita between the groups that make up the world versus that of Sub-Saharan Africa doom further economic growth. The population rise in poor Africans is only offsetting the declining population of the rest of the world. The chart below details that the average African can consume just 3% what a single high income nation resident would. The average African can consume just 18% what an upper middle nation resident (China, Mexico, Russia, Brazil, etc.) would...and only 70% what a lower income nation resident (India, Pakistan, etc.) would consume.
Total population among each age segment below, green line is the young (0-14yr/olds), blue line is the child bearing population (15-44yr/olds), and the grey line is the "post breeding stock" (45+yr/olds).
Noteworthy is the peak population of young (x-Africa) was hit over 2 decades ago, and the worlds population of young is in active decline. Prior to 2030, the global childbearing population (x-Africa) will likewise begin it's secular decline.
Looking at population growth (x-Africa) by age groups but on a year over year change basis, below.
Super noteworthy is the 90%+ deceleration of annual population growth among the childbearing population of the world (x-Africa). And by 2023, the childbearing population will begin declining. BTW - the annual growth of the childbearing population (x-Africa) is very closely mirrored by the Federal Funds Rate. The accelerating growth of this population drove demand above and beyond existing capacities, pushing organic inflation and the deceleration in growth of this population is the death of organic, demand based inflation (too much accelerating capacity thanks to automation, AI, robots, etc. versus decelerating demand growth). Inflation is now a synthetically engineered currency event, not demand based.
The impact of a shrinking population capable of childbearing with significantly negative fertility rates (x-Africa) will collide...likely producing a must sharper decline in young (x-Africa).
Next, Africa is nearly all the population growth, but little of the global immigration...
Sources of Global Migration
Since the source of population growth is pretty much solely Africa, the sources of migration should also be clear. The chart below shows the primary sources of migration, per five year periods (1950 through 2015), by global region. Some key takeaways:
Sub-Saharan Africa has been a relatively insignificant source of immigration since the 1980's...and even then it never rivaled the migrations from Latin America (primarily Mexico) or presently from S. Asia. Essentially, what happens in Sub-Saharan Africa stays in Sub-Saharan Africa.
Northern Africa has been a more significant source of migration since the 1990's but the regions birthrates (2.8 children per female) are falling more in-line with Europe than Sub-Saharan Africa (4.9 children per female).
Latin America was the primary source of migration but this has hugely decelerated, with Mexico experiencing a 10 fold decrease in immigration since 2005.
The S. Asia region, (primarily India, Pakistan, Bangladesh) are producing the bulk of the worlds migrants.
This whole scenario seems to suggest not just a global slowdown is imminent, but an outright collapse in demand, birthrates, and global populations is more likely than not.
Population data from UN World Population Prospects 2019, Migration data from UN 2017 International Migrant Stock; Primary energy data from EIA, GNI per capita via Atlas method, World Bank.