Declining Populations and Robots

Like many people, I grew up hearing the tales of unchecked population growth that would eventually consume the world’s resources. At the same time, you could always feel the underlying fear that machines/robots would eventually replace all of the major jobs out there or even worse case, enslave people (a la The Matrix) or kill off everyone like Skynet in Terminator.

Thirty years ago the population was exploding adding 1 billion people in a 13 year period (1974–1987) and then another billion in 12 years (1987–1999).

Recently though, something interesting is starting to happen. You’ll notice the top of the graph is showing signs of flattening out. While it should only take us 12 years to add the next billion people to reach 8 billion (currently at ~7.4 billion), it’s projected that the next billion will take 24 years. That’s quite a pullback in growth!

These projections are difficult to accurately forecast, but some even say that we won’t reach 9 billion. That’s a pretty significant story change in a short amount of time.

https://en.wikipedia.org/wiki/World_human_population

What’s driving this change? It only comes down to a couple of factors — birth rate and immigration. The birth rate, often referred to as the fertility rate, is how many children a woman is expected to have in her lifetime. Anything below 2.1 children per woman (generally accepted as the rate needed to sustain a population in first world countries) means that populations will decline. Anything above and the population will increase. Countries like Spain, Japan and Italy all have extremely low birth rates of around 1.3. Countries at the top tend to be third world countries in Africa like Niger, South Sudan and Congo which are at 7.6, 6.9 and 6.6 respectively. You can see a comprehensive list by country here. Generally, as countries become more educated (especially the women) birth rates decline as women wait longer to start having children. Also, as a society advances economically, children shift from being a source of revenue (think: more people to tend a farm) to a cost driver (more children that need daycare and to put through college). The economics of children quickly shift in first world countries causing people to have less of them.

Some countries can continue to grow even if they have below replacement level births and that is through immigration. The US is a prime example of that where immigration drives the majority of our growth today.

To the left is a chart that shows our organic population growth is now leveling off while immigration is fueling most of our upward growth.

While this population decline might seem like a long way off, it’s actually happening today across most first world countries. One of the biggest world economies experiencing this trend now is Japan. Japan is now losing over 200K people per year and is now 1M people below its peak. By 2060, Japan’s officials project that the population will decrease by 40 million to 87 million. That’s a pretty stunning decline in a a short amount of time!

http://www.independent.co.uk/news/world/asia/japans-population-falls-for-the-fourth-straight-year-to-its-lowest-point-since-2000-10186705.html

While Japan is one of the first world powers to start seeing this shift, other first world countries are not far behind. China just ended its one child policy in a large part to combat a rapidly aging population.

http://www.cnn.com/2015/10/29/asia/china-one-child-policy/
http://www.bloomberg.com/news/articles/2015-08-20/xi-said-to-put-population-over-growth-in-china-s-economic-plan-idkp0hyy

And while the US continues to grow (.77% or around 2.5 million people per year) the birth rate continues to be below replacement level (2.1 children per woman) at 1.86. What this means is that the US is only growing now due to immigration.

The final graph I have to show on this topic is something I pulled via a Twitter post that shows that the world working population growth peaked in 2005!

If true (and seems to be validated by other stats from above), then that will have a profound effect on world economies in the future. For the first time in modern history, we will have a situation where there will be less workers every subsequent generation. It means there will be an increasing number of older people each worker will have to support. For many social safety net programs like Social Security and Medicare in the US, it will destabilize the foundation that they were built on. This post isn’t meant to speculate what happens to those programs when populations decline or for that matter what happens to the economies that depend on a certain amount of population growth. I did find an interesting post that explores this topic in much better detail than I could. It argues that declining populations aren’t a huge risk as long as GDP keeps increasing on a per capita basis (which should be the case in industrialized countries assuming there continue to be productivity gains through technology) and the population decreases aren’t too sudden.

Aside from the obvious issues around social programs, there are even more intriguing questions like who will make all of the goods or food that have traditionally required some amount of labor. Since China is a huge producer of goods, WSJ did an in depth report on just this topic and their fear of a declining workforce.

“Fearing that China will see an exodus of manufacturers, Chinese Communist Party Chief Xi Jinping last year called for ‘an industrial robot revolution’ in China, which has become the world’s largest market for automation.’”

It’s interesting that large countries like China and Japan are already responding to the eventual decline in population and in China’s case are trying to automate themselves quickly before their labor force starts to decline. While there is a fear of robots replacing jobs, it might become imperative that we have robots to do the jobs of the laborers that will quickly start disappearing from the workforce. In fact, maybe there is a scenario where it’s a race between developing intelligent robots to do the work required to keep society going and having enough workers in the meantime.

Yes, this just seems like a crazy scenario now, but simple math tells us it might not be that crazy in the near future. Once population growth turns negative the math quickly works against us. From an article by Jeff Wise on Slate.com, he says the following regarding this scenario:

According to a 2008 IIASA report, if the world stabilizes at a total fertility rate of 1.5 — where Europe is today — then by 2200 the global population will fall to half of what it is today. By 2300, it’ll barely scratch 1 billion. (The authors of the report tell me that in the years since the initial publication, some details have changed — Europe’s population is falling faster than was previously anticipated, while Africa’s birthrate is declining more slowly — but the overall outlook is the same.) Extend the trend line, and within a few dozen generations you’re talking about a global population small enough to fit in a nursing home.

So in the years to come, maybe the fear that robots will replace everyday jobs will be swapped with the anxiety that they aren’t replacing enough jobs fast enough. My prediction is that once populations start to decline in the first world countries, the descent will be just as fast as the ascent.



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