Population Paradox

Many people enjoy having children around and many think of more children as power in the society. These kids will grow up and help their parents at the time of need or at least give their parents a sense of tribal power. In modern societies, the desire to have many kids might be less but by looking at the global population data, one can infer that there is a reverse correlation between Human Development Index (HDI) of a country and its population growth. The bitter truth is that we do not need so many people around and the global resources cannot practically support such a large number of people. In this article, I will present a few economic arguments on the population growth and its impact on business and jobs.

Larger denominator

It's simple. The numerator is the economic output of the country (mainly natural resources in our case) and the denominator is the number of people being fed by the economy. I don't intend to simplify the economic distribution problem, which itself a problem that led to wars and global conflicts and the appearance of Marxism and alike. However, with a super-macro lens, one can observe that if the country's population outpaces its economic output, people will have less as the denominator will be large and each person's cut will be less. Now, we know that there are those 1% at the top that could complicate the equation. However, if the top billionaires are factored out, the remnant is the middle class and a possible worker class. These are the ones that will be hit harder by a population growth that outpaces the economic output. Ironically, these are also the ones responsible for enlarging the denominator. I'm sorry, but you are eating up from your future and your successors'. One can say that the middle and the worker class are also key elements in improving the numerator (the economic output). But, here is the catch. Workers must work for the economy to roll. They are the necessary component. However, they are not sufficient. The top 1% make three key decisions. First, they choose whether or not to invest and thus create jobs. Second, they influence the government, which regulates the economy. Third, they choose whether the benefit circulates back to the same economy or the economic output is exported to a different jurisdiction. Given these decisions, the only choice facing the less privileged (middle, worker classes) is to control the population growth.

People do not have to work

It's foolish to think everyone has to work and produce to be paid and it's quite ignorant to attempt to do that. Think of it this way. You have way too many people who are looking for a job (a government job in our case) and they cannot all be qualified, educated, or useful at all. The reason is twofold. First, with a small and more interconnected community, a well-mannered society can uphold the standard and spread the culture, the manners, and the basic education to the very small offspring sub-population that will grow to enter the job market. Second, the state can properly educate them and plan their future. Think of a class with 10 students in a school with two classes. The management, the services, and the teaching quality can all be made to perfection with a limited capital. Now, scale that up to cover the uncontrolled and unbounded population with a large number of offspring per household. The ideal school will now host 20 students per class and has to open 4 classes to barely cover the educational demand. The service size is doubled but we can argue that the service quality has diminished by more than half. We probably still have one school principal and one assistant principal and the same number of teachers. They simply cannot scale up to the new numbers.

Back to the work demand, in a massively enlarged population with rapid growth the economy simply cannot scale up and a good portion of the population will be useless. Now, why demand them to "pretend" to work while they can't? One bizarre example is the three fingerprint model that was introduced in Kuwait in August 2024. This decision is in the reverse direction. We used to have employees that were not needed, now we have to make room for them and also increase the traffic on the already stressed road system so they can come back and forth to prove their presence. The correct decision would be to motivate people out of the work force by solutions such that creating new business opportunities, introducing the minimum income for citizens, and limiting the recruitment of expatriates.

Why is that? The reason is a stressed and overloaded work environment in various government agencies. The overstaffed departments are under pressure to recruit more because there are more youth who overwhelmingly earned university degrees in areas that are not even needed. To control the workforce, policies like three fingerprints or rigid promotion rules are in place. The utility of these rules are clearly limited if one would measure the productivity relative to the size of the work place.

Looking ahead

We know that population control is a sensitive matter and it can interfere with societal values. We are not in favor of rigid population control policies that make it hard for families to grow. These policies result in poorer economic conditions on the long run. We can always think of discouraging or at least following a neutral governmental policy towards population growth. Financial policies such as giving monthly allowances for each newborn does not help. The policy may give a little bit of relief to the person but can collectively harm the future of the same family. Some people are, unfortunately, under the impression that raising a child is almost free of charge in social economies like ours. You get paid per month for each child (up to seven), you get subsidized basic food items, free education, free healthcare, and guaranteed and free college education. These are very nice policies that we certainly want to keep, but can we afford them with a alarmingly high population growth rate? Perhaps not.