Bad News: Guardian Tells Us China is Running Out of Workers

June 29, 2019

Seriously, that’s what a piece on the state of China’s economy told readers.

“Another headache is China’s demographic problem, namely that it is running out workers thanks to the failure of its now-abandoned one-child policy. With growth slowing, China faces a race to avoid the dreaded “middle-income trap” where the economy of developing countries stagnates once the low-hanging fruit of industrialisation has been picked but before income has been spread widely enough around the population. China is expanding its technology industry as fast as it can to build-up high-value manufacturing but, as the Huawei standoff shows, the policy is bringing conflict with the west.”

Fans of logic and arithmetic know that countries don’t “run out of workers.” In a tight labor market, workers move from lower paying lower productivity jobs to higher paying higher productivity jobs. This means that we are likely to see fewer people working the late-night shift in convenience stores or as valets in restaurants. They will instead work at better-paying jobs. Of course, the people who depend on low-paid workers (the “hard to get good help” crowd) will suffer. (Also, don’t forget that we are supposed to be worried about robots taking all the jobs.)

While there are serious human rights issues associated with China’s one-child policy (these are hugely exaggerated, the killing of female infants happened throughout the region in countries that did not have a one-child policy), the slowing of China’s population growth was a great thing for the environment. In 1975, China’ population was roughly 50 percent larger than India’s population. Currently, they are almost the same, with India projected to pass China in the next decade.

If China’s population had grown at the same pace as India’s since 1975 there would be another 650 million people on the planet. This would make the prospect of limiting the damage from greenhouse gas emissions hugely more difficult.

 

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