I would rather say that the population growth that is only taking place outside of western democracies (with some minor exemptions), is the main reason behind the loss in living quality, as the explosion of the world wide population living below acceptable western standards puts the pressure on the wages all over the globe.
Being it through imported goods made in a country with much lower wage standards, or through stagnating wages of low skilled jobs due to immigration (please note that I just state that somebody new in some society is most of the time in more difficult position and is more willing to accept an offer considered not acceptable for longer time residents).
I understand that many societies value highly a human life but as irony had made the human life less valuable around the globe though this worldview.
The other countries with well educated young people that could contribute also have falling populations. The nations of Africa (and similar Guatemala, Bolivia, Gaza, Afghanistan) with high illiteracy, high violence, and near zero higher education are the ones that have extra emigrants to offer.
That kind of immigration is the only kind available and it isn't going to help anyone support higher standards of living in the short term.
It's not so much a question of evidence as basic math.
Imagine a society with 100 people. A working adult can create 50 widgets per year, and there's 15 kids and 5 retirees. The economy produce 80 * 50 = 4000 widgets per year, which gives a per capita income of 40 widgets. You can have whatever tax, welfare, or income redistribution policies you like, but there's only 4000 widgets to go around.
Great. Now let's say 5 new kids are born, the 15 existing kids become adults, 30 adults retire, and the 5 existing retirees die. Bonus: we got 3% better at making widgets, so a working adult makes 51.5 widgets. We now have 100 people, 5 kids, 30 retirees, and 65 working adults. Total widget production = 65 * 51.5 = 3,347.5 widgets per year, or a per capita income of ~33.5 widgets. Again, policies can change the distribution, but not the total number.
What we're seeing is that if an aging workforce lowers the overall workforce participation rate, as a society, we get poorer. If productivity increases, as a society we get richer. It's just a question of which change is larger, and in the US (and Europe, and much of Asia) the answer is the aging workforce. The demographics are clear and brutal.
The most critical metric is the ratio of current workers to retirees; that number is climbing and is going to continue without a policy change that somehow reduces the number of retirees, or increases the numbers of workers. Large scale skilled immigration might do the latter, but failing that, we're basically out of ideas.
What you're describing is a pyramid scheme. Get more and more new people in to pay for those already there. If immigration falls or stop rising you suddenly have a problem.
A more robust, sustainable solution is to improve productivity via other means (including automation).
Keep in mind that immigration is actually a small part of this; the much much more important element is birth rates. The core issue in the US is that we made promises based on an economy where the baby boom generation was working to support their parents in retirement, but we're going to need to pay up in an economy where millennials are working to support the baby boom generation in retirement.
> A more robust, sustainable solution is to improve productivity via other means (including automation).
Sure, that would be nice. It's also completely impossible. Productivity growth has never, ever, ever grown fast enough to bail us out of the hole we're in now, and we have zero (repeat, zero) ideas on how we could possibly change that.
> What you're describing is a pyramid scheme. Get more and more new people in to pay for those already there
That's how retirement works in most countries. The tax burden mostly falls on the "productive age" (18-65), so until automation pays as much taxes as the humans it replaces (corporate tax dodging considered), retirees in countries with shrinking populations are screwed.
150 years ago, 90% of Americans worked in agriculture. Today 2% do and we are better fed. Population growth or shrinkage cannot match productivity technology as the key factor in material quality of life.
Countries with falling populations will just need more robots. Mass immigration isn't going to help, but this is one of those problems easily solved with tech.
What you're talking about is the economic concept of "labor productivity". If we can use factories and automation to create the same amount of stuff with fewer people, then our productivity will rise. If it rises fast enough, then we could have more stuff per person even with fewer people working. Problem solved!
Except: Productivity growth has historically never been high enough to bail us out of the hole we're in, and it has been trending down in recent years for reasons we don't fully understand.
> our material abundance isn't particularly under threat from contraction of the work force.
I'm not talking about productivity growth at all, I'm pointing out that economic productivity is not evenly distributed throughout the economy. Losing 10% of farm acreage would be a disaster for quality of life. Losing 10% of fastfood stores would barely matter.
A society just needs to maintain its population, perhaps with little growth to edge the losses from unaccountable forces.
Growth is not needed, only thing that should be checked is that the growth does not become negative. This should not be patched by the immigration, as it will just delay the problem, not fix it.
> Again, policies can change the distribution, but not the total number
Indeed, policies can change the distribution. If one of the 100 people is getting 800 of the 4000 widgets produced, you can probably make some policy adjustments before coming to the conclusion that you're not producing enough stuff.
While I see the point you're trying to make, your math assumes widgets last exactly 1 year, which is generally not the case with most goods, except those produced for immediate consumption and maintenance e.g. food, gasoline, hygiene and health products.
Also, the basic math can be so vastly different in reality, that there will be huge leeway in terms of how many people can retire.
> The most critical metric is the ratio of current workers to retirees
America has been quite successful with immigrants getting jobs. But in Europe some countries have for a while got a kind of immigration situation where unemployment among the migrants stays so high that they are actually worsening the ratio of workers to total population.
3% is a pretty low number for productivity gains during a span of time when 60% of the existing workforce retires. As little as 24% increase in productivity, or 8 years of 3% annual increases, is enough to have a gain in your example.
1. Corruption in Zimbabwe. Commercial farmers have been abandoning productive land and the country is getting poorer.
2. Communism in Cuba, Venezuela, SE Asia, and other regions over the past fifty years has ruined developing economies and made them worse. Most of those governments have fallen and things are improving again, but communism certainly has the power to ruin a country.
I'm sure there are others. Technological progress has give us a strong underlying upward trend around the world lately but sufficiently bad government can occasionally reverse the benefits of progress temporarily.
Thanks, these are good examples. It's amazing how long some of these corrupt governments have stayed in power. Will be interesting to see what happens if/when there's a change in governance.
It's easy to stay in power when you have complete control over the news and propaganda machines. Using Venezuela as an example, the country is one of the richest in the world in natural resources, but 1% of the population controls 99% of the wealth.
Because Japanese debt is owned by Japanese households, yes. But if it decreases their standard of living, it's not a contradiction, it supports the point. They will pay the price of refusing immigration.
Actually not the children, as they are the expense
It needs the people in the productive age. Immigration of young adults is economically the best solution in short term as it leaves the expense of growing them up to the other societies.
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It needs the people in the productive age. Immigration of young adults is economically the best solution in short term as it leaves the expense of growing them up to the other societies.
And introduces pension problems for pension systems that are based on an inter-generational contract.
I would rather say that the population growth that is only taking place outside of western democracies (with some minor exemptions), is the main reason behind the loss in living quality, as the explosion of the world wide population living below acceptable western standards puts the pressure on the wages all over the globe.
Being it through imported goods made in a country with much lower wage standards, or through stagnating wages of low skilled jobs due to immigration (please note that I just state that somebody new in some society is most of the time in more difficult position and is more willing to accept an offer considered not acceptable for longer time residents).
I understand that many societies value highly a human life but as irony had made the human life less valuable around the globe though this worldview.