This week’s lengthy essay gets back to the origins of this blog site: the problems created by unbalanced population growth across the world’s regions. This essay will be published in Spanish in La Vangardia in June; please do not quote without permission.
Imagine that there is a natural resource that is essential for future economic growth; indeed it is probably THE key resource for economic growth in the twenty-first century. Now imagine that Western nations and their allies, including Japan and South Korea, are all running out of this resource, with stocks going down and existing supplies getting older and degrading. Looking abroad, there are plentiful supplies of this resource as raw material. But it is low quality, like high-sulfur, heavy oil sands, and so requires substantial investment in order to become usable to fuel economic growth.
A rational policy would be to invest in infrastructure to refine the plentiful stocks of raw material abroad, and then build facilities to import the refined product to fuel new growth. Or, Western nations might choose to import the raw material, and refine it on their own territory for productive use.
A totally irrational and self-destructive policy would be to block imports of the raw material, while not investing in the necessary infrastructure to refine the needed product abroad. This would guarantee that Western economies would lack the key resource they need for growth, making the burden of providing medical care and pensions for their fast-growing elderly populations even more difficult to meet.
Now let us add the problem that this valuable raw material, while essential for future growth, is also unstable in its raw form. Indeed, if too much of the raw material is allowed to build up under certain conditions, it is combustible and risks exploding. The best way to avert this outcome is to refine the raw material into economically useful forms, or remove some of it and export it to other countries. Clearly, this further problem makes the second policy – of blocking imports to Western countries and reducing investment in refining the product in place – even more destructive.
As some readers will have guessed, the resource I am talking about is not oil, nor solar power, nor uranium – even though all of these have some of the characteristics noted above. Rather, the resource I am discussing is people, in particular young people aged 15-24.
Young people in this age group are the key workers, innovators, and dynamic consumers of the future. Their productivity will determine the future wealth of nations – in countries where this cohort of young people is larger and more productive than the workers they replace, economies will grow. However, where young workers are no more numerous or productive than the workers they replace, economies will stagnate.
Where are the world’s youth?
In the mid-1950s, the developed world held roughly 30% of the world’s youth aged 15-24. That number was also growing strongly, from 140 million in 1955 to 180 million by 1980. But from 1980 onwards, the number of young people in the more developed countries started to decline, falling back to 146 million in 2015.
Meanwhile, the number of young people in the less developed regions was exploding. There, the 15-24 age group rose from 323 million in 1950 to just over 1 billion in 2015, a gain of over 700 million, or over 220%.
Most of this increase in the late 20th century occurred in Asia. Yet growth in the size of the youth cohort in Asia has ended. For Asia as a whole, the number of young people aged 15-24 declined by almost ten percent after 2010. This change in direction was led by China, where the “one child” policy combined with rapid urbanization, more education for women, and higher incomes to produce a stunning drop in the number of youth aged 15-24: from a peak of 252 million in 1990 to just 182 million in 2015. China is not alone: fertility has plunged across East Asia, and is also falling in many parts of South and Southeast Asia.
All developed nations have shared in this trend. For Europe as a whole (including Russia), the 15-24 youth cohort has declined from its peak of 113 million in 1980 to 82 million in 2015. Japan’s youth decline began earlier, with a peak in 1970; and the decline in Japan’s youth cohort has been sharper than anywhere else, falling by forty percent between 1970 and 2015.
The United States is a fortunate outlier among Western nations, as its youth cohort is still growing. But the rate of that growth has slowed to a crawl. Where the U.S. youth cohort increased by 82% from 1950 to 1980, in the next thirty years to 2010, the youth cohort increased in size by only 2.6%. That is much better than the 40% decline in youth cohorts suffered by Japan, or the nearly 30% decline in Europe. But even in the U.S., the growth of the youth cohort essentially ended over thirty years ago.
Thus the countries that have led the global economy in the last fifty years, and which enjoyed growing youth populations up to the 1980s or 1990s, have all experienced a sharp slow-down or reversal of this growth. From 2015 to 2050, the 15-24 age youth cohort will remain approximately stable in the United States, while declining in all other parts of the world – except for Africa.
In sub-Saharan Africa, despite economic growth, fertility has remained “stuck” at the relatively high level of four to five children per woman. The result is a continuing expansion of the young population on the African continent. By 2050, Africa’s 15-24 aged population will double from the current 230 million to 461 million.
To be sure, Asia still includes some countries with high fertility and growing youth cohorts: Afghanistan, Yemen, Iraq, Palestine, and Pakistan. But almost all the net growth in young people in the world between 2015 and 2050 will occur in Africa. If young people were oil, sub-Saharan Africa would be the Persian Gulf.
The Demographic mismatch: Countries without workers, and workers without jobs
Contemplating a future driven by robots and artificial intelligence, some may think that there is no point worrying about the future labor needs of advanced economies. That may be true for some jobs, such as taxi drivers, production line workers, and cashiers. Yet skilled workers – whether with craft skills in carpentry, masonry, and the like; with advanced technical skills such as writing computer code or welding complex alloys; with human skills such as caring for the elderly, troubled youth, children, and those with disabilities; or with creative skills in the arts, literature, and basic science; and the professions of law, medicine, teaching, and religious ministries – will remain essential to the growth and functioning of economies around the world.
A major driver of job growth will be the need to provide specialized transport, housing, support services, and health care for the elderly. Lifespans have been steadily growing longer, but with longer lifespans comes an accumulation of problems that need health care: fading eyesight and hearing; less mobility and more broken bones; high blood pressure, diabetes, and other ills; worn-out joints and clouded corneas. Many will require nursing home and rehabilitative care. Globally the population over 70 years of age will skyrocket in the coming decades. Their numbers will rise from 395 million worldwide in 2015 to 1.1 billion by 2050.
Where will workers with the diverse skills needed by advanced economies be found? Skilled workers are produced from a raw material – young people – who are “mined and refined” by being directed into education and training programs that equip them with marketable skills. To be sure, older workers can also be retrained, and indeed lifelong education and training to keep pace with change is now the “new normal.” But if we look to the future, it will not be possible to take those who are 45 years old today and train them to be cutting edge workers when they are 80 years old in 2050. Rather, ALL those who are going to be valuable workers with current skills in 2050 are people who are 25 years or younger today or who will be born in the next fifteen years.
By 2050, only 10% of that valuable resource will naturally arise in Europe and the United States. In the coming decades, stocks will be shrinking in most of Asia and Latin America, but growing rapidly in Africa. If this were any other resource essential for growth, such as natural gas or lithium, companies would be racing to invest in facilities to import it, and to refine it to render it productive. Yet with supplies of labor, the rich nations are doing the exact opposite. They are finding ways to halt immigration, especially from Asia and Africa, and investing minimal amounts in training future workers from those regions.
This is because of widespread hostility to immigration. This is despite the fact that labor from far-away places is the easiest way to fill local needs, especially for jobs in agriculture, tourism, nursing, elderly care, and engineering that local workers are not willing or not trained to do. Most young people in developed countries would rather not have to pick vegetables or solve differential equations. Developed countries thus rely on foreign workers to fill these roles. As the size of youth cohorts stagnates or declines in developed countries, more foreign workers will be needed, not less.
Hostility to immigration has both economic and cultural roots. In both cases, anxieties are raised mainly by unskilled foreign workers. While high-skilled immigrants generally add to, rather than compete with, native workers and bring widespread economic benefits, unskilled foreigners are seen as being directly in competition with, and displacing, native workers. Even more significant are cultural anxieties that unskilled foreigners will not fit in and adapt to the host society. Rather, it is feared that they will rely on welfare payments, will not learn the local language and culture, will create enclaves living under foreign laws and customs, and commit crimes. These fears lead countries to sharply limit immigration, to create especially high barriers to immigrants from regions seen as more “foreign” or dangerous, and to create strong preferences for skilled as opposed to unskilled migrants.
To be sure, importing unrefined raw material – that is, immigrants without skills – has risks. It is vital that immigrants, like any raw material, get the “refining” they need to become productive. Basic language skills, knowledge of the laws and customs of their host country, and job skills need to be acquired. Today, most Western countries do not have an immigration problem; they have an integration problem – that is, they need to work harder to ensure that existing and future immigrants will be productive contributors to national welfare.
The effort is worthwhile because the gains from having productive immigrants are enormous. Even unskilled immigrants, and more often their children, have surprising talents that benefit their host countries. Almost one-half of the companies in America’s Fortune 500 today were founded by immigrants or their children. Eight U.S presidents had at least one immigrant parent, including both Barack Obama and Donald J. Trump.
In contrast, consider the plight of Hungary, whose leader Viktor Orban recently said he wants a country where all jobs are filled by Hungarians, from the cleaning lady to the president of the Hungarian National Academy. Today, one in six Hungarians is over 65; by 2050 that will rise to more than one in four. At mid-century, the number of Hungarians over 65 will be three times as large as the number of young people aged 15-24. Good luck filling the jobs in a modern, high-tech economy with that population! Orban’s pursuit of ethnic homogeneity will doom Hungary’s population to a future where its economy is unable to compete, and unable to grow.
Even if rich Western countries do not want immigrants from Africa, however, they will have to deal with large numbers of young Africans seeking to cross their borders. The huge growth in youth cohorts in sub-Saharan African alone will create hundreds of millions of new job-seekers. Especially if they are not trained to acquire valuable skills, they will have difficulty finding jobs in their home countries, and be driven to search for work abroad.
In the rapidly aging societies of Western countries with shrinking youth cohorts, the demand for workers trained in the latest skill set will be huge. But the shortage of such workers locally will crimp growth unless skilled workers can be brought in from abroad or be brought in as youth and trained locally. In African countries with huge youth cohorts, the opposite problem, a shortage of jobs for workers, will lead to great pressures for ambitious workers to migrate. The key problem of the next half-century will be the mismatch between the richer countries that need workers, and the developing countries where workers need jobs. The solution to this problem lies in providing workers with the skills they need to do productive work, and facilitating their orderly movement and integration to places where their skills are needed. Yet at present, the great majority of workers in youth-rich countries are not getting the education and training they need to be productive workers either at home or abroad.
Treating Youth as a Resource: Investment in Education, Training, and Social Order
Western development agencies have invested in education in developing countries. Yet they have prioritized elementary school enrollment above all else. The result is that the statistics on elementary school enrollment for most African countries and south Asian countries are fine, with large majorities of elementary school age children being enrolled. But the quality of education is often lacking. Moreover, while elementary education is the foundation for future training and education, it is no longer sufficient by itself to provide marketable skills.
Acquiring those skills requires apprenticeships, vocational education, or secondary and higher education. Yet this crucial stage of post-elementary education has not been well supported in Africa. In many African countries, total enrollment in secondary school reaches less than half the population – in Uganda, with its population of over 40 million, 72% of all secondary school age students are not in school. In rural areas of Africa, typically 70% of youth have never attended secondary school. Vocational training is even less attainable – only six percent of total secondary enrollment in Africa is at vocational schools.
The results of this failure to “refine” the skills of young people in Africa are threefold. First, young girls, who even if they finish elementary school rarely can attend secondary school, end their schooling at age 12. This leaves them open for early marriage at age 17 or younger, which promotes high fertility and perpetuates the cycle of fast-rising population, shortages of teachers and school places, and uneducated young women marrying early. Second, a youth cohort with no secondary or vocational education is not equipped to be welcomed and provide needed skilled labor in countries to which they would seek to migrate. This perpetuates anxieties in immigrant-receiving countries about immigrants being low-skilled and hard to assimilate, raising resistance to needed migration. Third, a youth cohort without adequate skill training finds it difficult to obtain rewarding work and to build up higher productivity and the formal sector in their own countries. High youth unemployment and lack of career opportunities leaves young people open to mobilization by militias and extreme ideological movements. As I write this, riots are taking place in northern Morocco, where youth unemployment is 40%; and militias are forming all across the vast Democratic Republic of Congo, portending a resumption of the violence of the 1990s.
If current trends continue, with Western nations working to block migration, and African nations not providing sufficient skills to their young, the world as a whole will suffer. The rich nations will have grave difficulties in finding sufficient skilled workers to grow their economies. At the same time, waves of migrants from the huge and fast growing youth cohorts of Africa and Asia will seek to enter Europe and America to find jobs. But their lack of skills will provoke increased resentments and likely heighten the populist ethno-nationalism that has gripped the developed countries, and provided support for more authoritarian and nationalist governments to ward off the immigrant threat. Finally, the surplus of young men without jobs in Africa and South-central Asia will likely produce increased violence and civil conflict in these regions. This violence will further derail economic progress, and create waves of refugees that will put added pressure on local governments and on migration target countries from those seeking to escape the conflicts.
By contrast, if conditions somehow could be changed to develop an orderly flow of skilled and well-trained migrants from poorer to richer countries, everyone would benefit. Such migration would serve as a safety valve for the vast youth populations in poorer regions, while meeting labor needs in aging rich ones. A more skilled workforce in developing countries would facilitate development and reduce fertility, breaking the cycle of ever larger youth cohorts. And fears of unexpected waves of unskilled and dangerous immigrants would cease to roil the domestic politics of Western nations.
Is such a change possible? Yes – if governments and private donors treat young people as a valuable resource that needs to be cultivated. The primary focus should be on helping countries with large youth cohorts provide secondary and vocational training. Some of the effort needs to be in providing teachers, including recruiting retired teachers from the West for this new challenge. Some of the effort needs to be in providing physical facilities, including vocational shops and high schools equipped with up-to-date laboratories and textbooks. Some of the effort should be in encouraging more foreign students to enroll in Western vocational schools and universities, especially those training secondary school teachers to return to their home countries to teach.
No doubt this sounds fanciful. But the stakes are nothing less than global peace and prosperity. The successes achieved in the West of educating and employing women and extending life spans have created aging societies with shrinking youth cohorts. The successes achieved in low-income countries of increasing child survival and providing basic diets and health care have produced burgeoning numbers of young people. In both cases, policies achieved their goals and produced success. But those successes have created, and will continue to worsen, a huge imbalance between the richer and poorer regions. The richer regions now face a future without sufficient workers and the poorer regions a future without sufficient jobs.
The only way out of this dilemma is through programs to provide valuable skills to young people and facilitate their migration to countries that need skilled workers. We must find a way; otherwise the prospect is for increasing economic strain and fading of open, inclusive democracies in the West, a sharp slowdown of growth and economic setbacks in East Asia, and fresh waves of violence and refugees in Africa. In other words, the prosperity that had been hard won at the end of the twentieth century could become completely undone in the twenty-first.
Jack A. Goldstone, Schar School of Policy and Government, George Mason University
All data in this paragraph from http://www.aaionline.org/wp-content/uploads/2015/09/AAI-SOE-report-2015-final.pdf