The Country’s Major Demographic Problem: Too Few or Too Many People?

A weather person who told us to bundle up for the cold weather, but also be sure to drink plenty of fluids to protect against the heat, would not be taken very seriously. That is roughly the state of economics when it comes to basic demographic questions. On alternate days the economy seems to be suffering from too many people and too few people. Yet people somehow still take economists seriously on this issue.

Today the problem is too many people. A New York Times article on the weak job market facing young college graduates told readers:

“Some economists have hypothesized that the challenging labor market for young degree holders could be the outcrop of a longer-term demographic shift that is making it more difficult for them to procure white-collar jobs.

Since the 1970s, the share of older workers in the labor force, particularly in private-sector white-collar jobs, has grown as life expectancy has increased and Americans have worked longer, Mr. Pardue said. That has created congestion in the workplace, resulting in less progression for mid- and early-career employees who would otherwise have moved up the job ladder when more senior workers retired. Without as much movement in their ranks, many businesses found they did not need to replace as many entry-level workers.

“’As the U.S. population has aged, older workers are continuing to hold on to their positions,’ Mr. Pardue said. ‘That is now showing up in terms of diminished job prospects for younger workers.’”

This is clearly a story of too many people. The troublesome baby boomers are working later in life and keeping new college graduates from getting jobs.

Over the last four decades, hundreds (perhaps thousands) of economists and policy analysts have made substantial careers for themselves out of warning that the baby boomers were going to bankrupt the country. The story was that all the baby boomers were going to retire and needed to be supported by the smaller cohorts of workers that came after them. That was the story of too few people.

This sentiment has been echoed by the fertility cult pushed by folks like Elon Musk that we are running out of people, especially white people. In some of their rants they calculate, based on demographic trends, that the US and/or world population will shrink by some huge percentage over the next 500 years.

But now the big problem is that we have too many people, and specifically that too many people are still working later in their lives. Oh well, I guess I better put on another sweater since it is supposed to be really hot outside.

This first appeared on CEPR.

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