If population grows exponentially, how come there are less workers per retiree?

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rgeddes's picture
rgeddes
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If population grows exponentially, how come there are less workers per retiree?

 I just completed viewing The Crash Course, and found it very interesting, and this question came up for me.

In the context of exponential poplulation growth, there are less workers per retiree?   I assume that this exponential population growth does not apply to the US.  Is that a safe assumption?  If this is the case what conclusions can be drawn?  

 

robie robinson's picture
robie robinson
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is not every

point in a non-linear regression the start of exponential growth? A fall from 7% boomer pop, to 1.8% current growth is at each point an exponential growth.  robie? i'mnotsurewhoiam

Poet's picture
Poet
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The Rule Of 72

Even 1% per-year compounded growth is exponential - just stretched out. A population growing at 1% compounded annually will double in roughly 72 years. At 2%, the doublling is in roughly 36 years.

United States
Currently, the U.S. is growing at almost 1%. Much of it from immigration. Without it, we would be like Japan or Eastern Europe.

We have fewer workers per retiree because people are living longer. The ratio is now something like 1 retiree to 2.3 workers. It used to be 1 retiree to 10 workers in the 1940s. To make up for the lack of workers under this pyramid scheme, Social Security contributions had to jump from 2% of gross wages on the first $3,000 of income earned, to over 10.4% (for many years it was 12.4%) on an ever-rising amount - This year on the first $110,100 an indivual earns. (If it were ONLY inflation we were talking about, the number would have been 2% on the first $55,000.)

Even if we are slowing, we are still growing. Having a large and massive population, we continue to consume a great deal of the world's dwindling resources. Even if we were to experience negative population growth of -1%, there would be numerous years of massive consumption. Decreasing, but still massive.

The World
The world itself, from what I've read, is growing at a rate of over 1.14%. We are expected to hit 13 billion by the late 2060s. However, long before that, I think the growth rate will have slowed even more. Unfortunately, even with slowing growth, we likely will reach 8 billion people before 2025 years, and 9 billion people before 2040.

If you think the world is crowded and stressed now, it will be nothing compared to what we'll see in the future - even with "slowing" exponential growth.

Poet

 

maceves's picture
maceves
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social security

 I watched this free class from Yale University about social security and why it is broke.  This is very informative.

Part of the problem is from its very inception---by insuring people who had never paid in when the program first started.

RNcarl's picture
RNcarl
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maceves wrote:  I watched
maceves wrote:

 I watched this free class from Yale University about social security and why it is broke.  This is very informative.

Part of the problem is from its very inception---by insuring people who had never paid in when the program first started.

Partly.... Also, there was a specific reason the age of "collection" was set at 65. The life expectancy in 1930's was 62-65. If you lived much beyond that, you could collect at 65.

It was also never meant to be a "pension" it was simply to keep the aged from literally "starving in the streets." (it didn't look good for politicians)

Life expectancy has a lot to do with the ratios spoken of earlier.

I am afraid that when the full effects of "peak production" of oil begin to be broadly felt, population growth will become negative.

 

There is another reason rarely mentioned as to why the worker to retired has fallen so quickly. Replacement births versus surplus births. An "average" household has only 2-3 children. (I don't do decimals when talkIng about people.) that is replacement birth not growth. So I guess contraception has a role to play in the declining ratio. 

Lastly, even the "baby boom" itself has to do with the declining ratio. Even with the two items mentioned above. Just the shear number of people in that demographic dilutes the ratio.

 

"The growing pains caused by the baby boom on the way up will cause greater pains with their declining numbers." quote - me

 

C.

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