Immigration: America's weapon against the world's aging crisis

We’ve long been warned about the rapid increase in the world population— 2.5 billion in 1945 to 7 billion today, and projections of 9 billion by 2050. Most of the growth will come in the world’s poorest countries. Not a good combination.

In the industrialized world, there is a far different kind of population crisis developing that may also have dire consequences — the aging and low-birthrate crisis. What? The greatest threat to the political and economic world order is demographics?

Most of Europe and Japan are already experiencing a much older population, declining birthrate, and a smaller working-age population. The world’s economic and social organization depends on continued economic expansion. When there are fewer people to provide the goods and services and taxes while at the same time the population of retirees grows rapidly, something has to give. The stresses will be felt across all the world.

The country with the worst outlook is Japan, with an 83-year life span — the world’s longest. Present trends indicate that by 2050, more than 40 percent of the country’s citizens will be over 65, most not working. But every year fewer Japanese babies are born than the year before.

Private pensions are dependent on the company prospering. But if there are fewer working-age people to run the company and buy the products, that’s a problem. A smaller work force can’t pay the taxes needed for a vastly larger group of retirees.
Europe, where early retirement is customary, is in much the same situation. Italy and Germany will both experience population declines and could see their working-age populations reduced by 40 percent by 2050, according to UN statistics.
In the industrialized world, population growth has long fueled a majority of economic growth. That’s over. Fewer people means fewer new houses, cars, appliances — all the trappings of an industrialized society.

Global markets will be negatively impacted as retirees are more likely to pull money out of markets for living expenses as opposed to younger people who invest in the markets to save for their retirement.

In the industrialized world, there is only one real bright spot. The United States of America is projected to grow from 300 million today to 400 million by 2050. While the percentage of workers to retirees will be smaller than today, it is manageable. And while the U.S. will be buffeted by the worldwide aging crisis, it will probably come out of it a bigger power than it is today.

How did America do it? One word — immigration. If we relied exclusively on the reproductive rate of the Americans who have been here for generations, we would be facing the same dismal outlook as Japan, Germany or Italy. Most of the increase in our population will come from immigration (who tend to be young), and the children and grandchildren of recent immigrants, legal and illegal.

This is not to say that immigration won’t be without controversy. One only needs to look at the arguments over the new Arizona law that is scheduled to go into effect today. But seniors live longer, want (and deserve) increasingly expensive health care, and pension plans to support them. And they constitute a growing voting bloc.

Without immigration, there simply won’t be enough new workers to support the seniors or grow the economy. Is there any other choice besides much more, hopefully legal, immigration?

Legge’s column runs every other Thursday. He lives in Madison County.