[Lazare]

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.

This article spells it out fairly nicely I think: https://www.bloomberg.com/view/articles/2016-10-10/innovatio...

[agd]

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).

[Lazare]

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.

Productivity growth will not save us.

[sangnoir]

> 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.

[jackmott]

or just be ok with having less shit.

[logfromblammo]

...or murder the retirees, and take their widgets.

The apparently abhorrent option is still an option, if you get desperate enough.

[maxerickson]

That basic math illustrates things nicely but hides the real picture.

There's about 2 million people working in agriculture and 1 million working in mining in the US:

http://www.bls.gov/emp/ep_table_201.htm

And about 5 million working in the energy industry:

http://energy.gov/articles/doe-releases-first-annual-nationa...

Our widgets are built by machines.

This too is a facile picture of the situation, but our material abundance isn't particularly under threat from contraction of the work force.

[WildUtah]

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.

[Lazare]

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 wish!

[maxerickson]

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.

[eveningcoffee]

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.

[eloisant]

> 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.

[Nursie]

This ignores productivity gains and need.

In much of the west we have unemployed adults who are making no widgets, and robots are starting to make widgets too.

Your allegory works for full employment and constant productivity.

[Scarblac]

Yes, the number of widgets goes down from 40 to 33.5, but also 30 people can lead a retired life instead of 5. That is also worth something.

[antisthenes]

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.

[sampo]

> 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.

[hx87]

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.