Theoretically, if immigration wasn't an option, what would happen in this case? Just imagine entire earth is well developed, so this issue is present on every single nation on earth. What would happen then? Would economy just slow down or would everything come crashing down? Would automation see widespread adoption? Anything else?
Economic growth would slow down because it would be based purely on productivity gains rather than productivity gains and producers/consumers base growth (and automation would likely have a big part to play in that).
But that would not necessarily be a bad thing as that would force to indeed focus on productivity growth and growth of indicators per capita instead of overall indicators.
Retirement funds don’t strictly requiring that, they just require that there are more workers than pensioners — you could also sort that with a higher retirement age.
(Long-Term question I’ve had: how does this compare with UBI, which is kinda like a pension but for everyone?)
Retirement age cannot be pushed higher much longer, we already have too many too much old people doing _badly_ their work because they are not sharp enough / willing enough / energic enough to do any better (so destroying any productivity value for that position + not allowing access to those well paying jobs to the new generations).
I am in a country which has the s.k. problem since a decade and since then tried to push retirement age over and over with extremely bad results (one of the higher young unemployment rate in the whole eu area).
Add to this that already now losing your job, especially if low-skilled, in your 50ies it's basically a sentence to never find another one and live under unemployment benefit until you get your small state pension.
For my generation (Born 1985-1995) it is already planned we will have to retire minimum at 74yo in the most optimistic situation. I mean, I don't even see myself capable of doing well my work at 65, and probably no one will want to keep me after 60, doesn't matter how sharp I will be. All supposing I am not gonna get pretty sick around that age, which is highly probable.
> not allowing access to those well paying jobs to the new generations
False dichotomy.
First: Employers which don’t allow people who are better suited to a role to have better chances to be hired for those roles, don’t grow as fast as those companies which do allow better candidates to get those roles.
This is basically what causes the situation in your 3rd paragraph, and is still more appropriate than relying on eternal population growth.
Second: Unless they are literally destroying value in their work (not merely being cost-ineffective, but actively damaging), then the economy still benefits from having more people working — the more value an economy creates, the more any given currency unit can buy, the more people are available to be customers, the more business can be supported by their spending, in a virtuous cycle.
This is why everyone is encouraged to work in the first place instead of jobs being treated as luxury or status symbols available to only the elite few.
>>"Retirement funds don’t strictly requiring that, they just require that there are more workers than pensioners [..]"
That's not necessary. They require that the active workers (plus capital) are productive enough to keep life standards for everybody. There is not theoretical limit for how many workers are necessary. In the extreme it could be with one or zero workers.
Actually, retirement funds only require capital growth in real terms, which means the economy growing faster than inflation, because the principle of a retirement fund is to invest current contributions to pay future pensions.
More workers than pensioners is required when the system works by using current contributions to pay current pensions (which is usually how state pensions work). [Which should also provides some information about how (un)realistic UBI is]
Most economic growth comes from technological advance. Do you expect technological advance to stop before the Baby Boomers retire? It's possible, but it's not obvious to me.