The Demographic False Alarm


Readers might recall an IWC press release on Sept. 28, 2006 of a C.D. Howe report that revealed that if immigration were used by Canada to keep its old age citizens at no more than 20 % of its total population, immigration levels would eventually have to rise to 28 times their present level, bringing Canada's population to a staggering level of 165.4 million in 2050. Another release summarized a study done by the U.S. Centre for Immigration Studies which revealed that the average immigrant to the U.S. was actually four years older than the average American and that immigration would therefore be of little help in changing the national age structure.

Similar findings have been advanced by the United Nations Population Division report on Replacement Migration. To keep the support ratio of workers to dependents constant, for example, the U.K. would have to grow from 60 million to 136 million and all of Europe from 322 million to 1.2 billion over 50 years to maintain their current age structures.

To keep the support ratio of workers to dependents constant, South Korea, for example, would need 94 million immigrants per year, almost twice its current population. If South Korea followed this path, its population would reach 5.1 billion by 2050. (See “Oz Ideas and Innovations” on the web.)

The obvious lesson in all of these scenarios is that it is absurd to use immigration to solve problems created by an ageing population. According to the C.D. Howe report, a much more satisfactory tactic in Canada, for example, would be to increase Canada's retirement age to 70.

But the obvious has not stopped immigration advocates everywhere from their aggressive lobbying for even more absurd demographic schemes. In 2000, European business and refugee activists were quick to seize on a report by the UN Population Division which perceived Europes working population as too old and small to support the continents retirees. Migrant worker populations have soared since then throughout the EEC.

An April 21/2004 report by the Globe and Mail reflected the standard Canadian party line: the downward population trend makes it all the more essential to maintain an open immigration policy. Carelton School of Business professor Linda Duxbury warned that a disappearing population will put significant strain on the health care system. (MacLeans, May 28/07) With a 1.53 fertility rate, Canada is close to the OECD average of 1.56 per woman, but below the 2.1 rate needed for replacement —but why we need to achieve replacement is a question never asked. It is interesting that in discussing this crisis, MacLeans journalist Cathy Gulli, in the same issue, described Frances benefits and incentives to parents as promising, and Quebecs as progressive, all in the cause of keeping civilization going. This is in a world of 6.6 billion people and in a country where each child will likely produce more than 23 metric tons of GHG annually and where civilization everywhere , according to the IPCC, is in imminent peril as a result.

The centrepiece of such arguments, which form the conventional wisdom of permitted discussion on the issue—if discussion is ever permitted—is the societal implications of population decline, the assumed political and economic upheaval. What they never consider are the economic costs and environmental impacts of ongoing population growth. So, the question is “What are these costs?”

The British think tank, Optimum Population Trust (OPT), states, In looking at the economic costs of supporting an ageing population, it is necessary to balance these against the economic costs of population growth. These include the billions of pounds in higher taxes needed to build sewage facilities and other infrastructure—with rising traffic congestion costs…—to accommodate ever-rising population numbers. Additionally, there will be higher energy costs and environmental damage. (They say) we need more babies to pay for our pensioners but this ignores the fact that those babies will eventually become pensioners themselves, says OPTs David Nicholson-Lord. When that happens, we need even more babies to support the even greater number of pensioners. Population would thus have to go on increasing ad infinitum—something the planet clearly cannot support. (They) just (dont) seem to understand the notion of environmental limits. In both economic and environmental terms, what they are proposing is lunacy.

Just as babies grow old, immigrants and their children grow old too. As Sir Adair Turner of the British Pensions Commission put it, The issue is not whether we want immigration, but whether we want population growth—via more immigration or babiesWe cannot solve global environmental challengesunless at some time we reach population stability.

American conservationist Dave Foreman, of course, also approaches this question from an environmentalist perspective. None of the birth-dearth wailers consider ecological consequences; theirs is a world only of human society. Other species do not exist for them. …if conservationists spend too much time debating the economic and social challenges of declining birth rates, we appear to accept the worldview and values of those who ignore Nature. We are fighting in their arena, not ours. We must constantly stress the ecological impacts of the population explosion. (The Rewilding Institute Jan.28/07)

Unfortunately, however, it is in the arena of politicians and economists that the battle must be fought. For ours is an urban world alienated from nature that perceives reality through a filter of jargon and statistics that do not tell us about the true state of our precarious existence. For this reason, let us once again pose the question, “Is there really an economic case for panic about an ageing, declining population?

British economist Phil Mullan, in The Imaginary Time Bomb, answers with a categorical No! The preoccupation with an ageing population that will place intolerable strains on health and pension plans has less to do with demographic fact and more to do with an agenda to cut back the welfare state. Mullan argues that industrial societies are already productive enough to produce sufficient wealth to provide for the present elderly population and even with quite low levels of growth will satisfy even the most extreme projections for the future pace of ageing. growth in real public health spending per head in an ageing society could be afforded as long as growth was to 1% below productivity growth. And even modest rates of economic growth will make public pension schemes manageable indefinitely.

Extra expenditure of health and pension services in the next 40 years will need to increase by only 12% to maintain present levels and standards. And demographic changes accounted for only about 25% of the growth of social spending in G7 countries between 1960-81. Mullan observes that Canada needs to maintain an economic growth rate of 1.05% to maintain social expenditures for its aging population until 2040. there is no evidence that even the ageing trends projected will create an unaffordable burden. This is much faster than the growth in real elderly dependence on social wealth. wealth generation has nothing to do with either the average age of the population or with demographic ratios. …over time, deployment of, or failure to deploy, new technologies massively affects output per worker.

Mullan further cites the dependency ratio as a crude device for assessing generational burdens. The implication that everyone between 16 and 64 works is an absurdity. The unemployed, students, early retirees and housewives do not generate tax revenue. The increased number and proportion of the elderly needs to be set against the decline of health expenditure on children as a result of the decline in the birth rate. And the falling birth rate rates which boost the aged dependency ratios also free more women to work, which grows the economic pie which aged dependents share. Dependency and support ratios have acquired a centrality and economic significance which they dont deserve. Countries with much older age structures have out-performed those with younger ones, and business cycles and growth rates are demonstrably unconnected with the age profile of a nation. Mullan quotes Keynesian contemporary, economist William Reddaway, The economic importance of population changes is often grossly exaggerated.

Research also shows that no relationship exists between ageing and falling productivity. Experience and longer training offset physiological decline in older workers, who are universally depicted as people who automatically develop a chronic illness at 65. But the fact is, todays 65 year old is healthier than yesterdays 65 year old, and tomorrows senior will probably be healthier than todays. Postponed retirement therefore would seem a much more reasonable and sensible remedy for the birth dearth than a population boom that will present its own problems.

As with the pension issue, in the health discussion, demography is being made to play the patsy in an excuse to contain state expenditure. A report for the Institute of Public Policy Research confirmed that there is little correlation between aging and increased health care costs. In short, according to Mullan, no one has come up with a compelling financial case why ageing is so burdensome.

He concludes: There is no demographic time bomb. The anxiety about ageing that has become endemic in the 1990s is misplaced. It is entirely exaggerated. Sometimes commentators with particular obsessions or vested interests have manipulated it.

But while Mullan finger-points obsessive commentators, Canadians know that it is the immigration industry, with media collusion no doubt, which has sounded the demographic alarm bell. Like the perennial and hyperbolic demands for imported skilled labour, the demographic bell is a call that has been answered by the highest per capita immigration intake in the world and the highest population growth rate among all G8 countries.

And all to serve a demographic pyramid scam that one day must collapse like a house of cards, and take our environment with it.

Canada does not have to be duped by this scam and the many other scams that the country's mass immigration advocates are trying to sell.