A Canadian Reader Explains What Happens To Economies With Shrinking Populations
November 24, 2009, 04:00 AM
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11/23/09 - A Nevada Reader Says Sen. Reid Far To The Left Of His Constituents

From:  Bruce Wellington (e-mail him)

Re: Don Collins Column: Gates Foundation Grants Insure More Population Growth—And Immigration

Collins asks what would happen to the U.S. economy if the population shrank.

For the answer look to the Asian Tiger economies, Hong Kong, Singapore, South Korea and Taiwan.

In the Asian Tigers as entrepreneurial growth developed, workers moved to better jobs.

That`s the domino effect in the labor market. When someone gets promoted, he is replaced by a trainee and in turn the trainee`s job goes to someone more junior to him.

The net result is there`s pressure on the bottom to go out of business. By moving up to better businesses, the Asian Tigers moved got rid of the labor-intense, low-value added jobs.

Atrophy the bottom. Export it.

That`s what would happen with economic growth and population decline. The economy would shrink somewhat but disproportionately at the bottom. Productivity and per capita income would continue to go up. 

People with investment portfolios would have look overseas for higher growth opportunity. But the average worker would be better off.

Wellington is a Toronto-based activist who has worked on immigration issues for nearly two decades. His previous letter about Canada`s immigration problems is here.