Germany is facing dearth of
births. It has dropped below Japan to have the lowest birth rate globally.
It is expected that low birth
rate would cause shrinkage in workforce by 6 million over the next 15 years.
With fall in birthrate the
population between 20-65 years will fall to 54% by 2030.On the other hand, the
life expectancy for women is expected to continue rising to 88 and for men to
84 by 2050. This will push the dependency ratio to 1.1, threatening the
solvency of public pension system.
Germany is not alone. The
entire developed world is facing the same problem. Japan, third largest economy
in the world after United States and China, is also facing sharp decline in
work age population.
According to U.S. Census Bureau,
Japan will face 18% decrease in workforce and 8% decrease in consumer population
by 2030. Fall in workforce and consumer population may hurt companies as they
have to face escalating cost of labor along with loss of economies of scale.
United States is also facing
workforce shrinkage, due to age, albeit at low rate than faced by the rest of
the developed world. China, in order to avert population decline, has ended one child
policy.
United States, China, Japan, Germany along with Italy, and Russia contribute nearly 50% of global GDP. Fall in their population
can cause balance of power to shift away from these regions.
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