This blog is intended to go along with Population: An Introduction to Concepts and Issues, by John R. Weeks, published by Cengage Learning. The latest edition is the 12th (it came out in 2015), but this blog is meant to complement any edition of the book by showing the way in which demographic issues are regularly in the news.

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Sunday, October 17, 2010

Which Came First--Globalization or Aging?

Ted Fishman is a journalist and former commodities trader with an expertise related to China. He has a new book coming out called “Shock of Gray: The Aging of the World’s Population and How It Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival and Nation Against Nation,” and he has drawn from that book for a piece that appeared today in the New York Times. He pulls his data especially from the United Nations Population Division, and that is fine. What is puzzling is his thesis that globalization is a result of the aging of the richer countries. In his view, it is the cost of health care and pensions for the elderly that has driven jobs "off-shore" to developing countries. That is akin to walking into the middle of a movie and ignoring everything that happened before you came in. He is looking at the world now and seeing that the richer countries are older and that the developing countries are younger and drawing a cause-and-effect relationship (that an aging world has shifted its jobs to the younger world because of the fact that it is aging), where one almost certainly does not exist. 

Reality is more complex than that. Globalization began with the drop in the death rates all over the globe after World War II that led in the 1970s and 1980s to huge youth bulges in the developing world. Companies looked at that growing young labor force and contrasted the wages that could be paid to them with the union-driven wages in the richer countries and made the choice to exploit the cheaper labor force (Marx could not have written that script any better). At the same time, but largely unrelated to that, the richer countries were lowering their fertility and eventually reducing their own supply of young people. But, it wouldn't have mattered even if fertility had been higher. Those jobs were still going to be transferred to the rapidly growing lower wage countries. The richer countries, in the meantime, fill in the lower end of the domestic labor force (jobs that can't be sent out of the country) with exploited immigrant labor.

All the same, Fishman is right that the world will be dramatically transformed by the aging first of the richer countries, and then by the successive aging of the emerging economies. We are in the midst of a global Ponzi scheme right now, with each successively aging country looking for cheaper labor elsewhere. That pool will eventually run out, and then what?

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