More People Needed

December 27, 2021

The holiday season has provided a reminder of just how hard it is for stores and restaurants to find staff. Written apologies for likely service shortcomings routinely greet you at the door, accompanied by a plea for patience and understanding.

The current shortage of people willing to work in service occupations has produced many explanations. Some suggest the problem is temporary, with the cause being the financial support provided by the government during the pandemic, which has enabled people to stay home. Other theories argue this is a more permanent change. For example, the suggestion that the pandemic has produced a cultural shift back to staying at home given that less income might be preferable to working long hours and/or several jobs. None of these explanations seems to explain the shift satisfactorily, and there is a sense that this change is not going away any time soon.

One positive consequence of this change is that people working in the service industry are receiving higher compensation. Whether that high pay is enough to offset rising inflation remains to be seen. Another more far-reaching question posed by the shortage is whether our population has reached the point where we do not have enough people to fill the jobs.

Taking this theme even further, I was surprised last week to read that the fertility rate in India has fallen below the ‘replacement rate’ for the first time. The youthful demographics of the nation will mean the population will continue to grow for a while but come the middle of this century it is expected to peak at around 1.6 billion before beginning a gradual decline. This new demographic reality is a stark contrast to the predictions of doom in the 1960s, which suggested that an overpopulated India was destined to be reduced to wars between its starving people.

You might know that China fell below replacement fertility levels almost 30 years ago, courtesy in part of the ‘one child’ policy. With the addition of India, around two-thirds of the world’s people now live in countries where fertility rates are lower than replacement levels, according to Nicholas Eberstadt of the American Enterprise Institute. The third of the world’s people that live in countries where the population continues to grow are mainly in Africa.

These demographic changes are going to be profound. By 2100 African nations like Nigeria (790 million), Congo (246 million) and Ethiopia (223 million), and Tanzania (186 million) are going to have populations that dwarf any of the western European nations. These demographics suggest there will be a major movement of economic power away from the US and western Europe to the countries formerly described as ‘developing nations.’

I am not going to see the full impact of this change, but my children, and my children’s children, are going to live in a world where the balance of economic power is profoundly different. I envy them for what they will see.

Richard Rushton