Very interesting article, particular those last couple of graphs.
A couple of questions:
1. So are you saying that by drawing an arbitrary line at age 65 we are discounting how many people continue working after 65 and therefore the “growing proportion of people over 65” rhetoric is a red herring because it doesn’t reflect a modern working life? Isn’t this what people are worried about though? That we will be forced to work into older and older age? Especially if their job is just a job and not a fulfilling career.
2. Regarding the Big Australia argument - assuming we can throw the aging population concerns out. What do you say to the argument that immigration is needed to replace shortfalls in the fertility rate in order to drive demand broadly across the Australian economy which is largely a service sector economy.
So because we don’t really create much *real* wealth here and have incredibly low economic complexity compared to say, Vietnam - we need to throw people at the economy in this Ponzi scheme-like arrangement to ensure a consistent base of demand so that that the majority of Australians’ jobs have a reason for existing.
I would love if we had a slowly shrinking population, for the reasons you mentioned. Also, only a small amount of workers is needed to take care of the elderly, if done efficiently. It means cheaper future housing, which is a wonderful future outcome.
If the population would need to grow for "economic reasons", then the same problems would exist in another 30 years, and thus continuous population growth would be necessary ad infinitum, which of course is very destructive and impossible on a finite planet.
Agree that reducing immigration will take some pressure off the housing market, but a shrinking population doesn’t guarantee shrinking cities and therefore cheaper housing.
The Japanese example is not the slam dunk example it appears to be.
It is true that housing in Japan has been consistently affordable (and actually getting larger) but it's not because they cut off immigration - they also have very pro development planning policies.
Despite the country's dwindling birth rate, Tokyo is currently experiencing a population boom and subsequent rapid urbanisation, with locals migrating within Japan to the city. Some of the trendier inner neighbourhoods like Minato-ku have grown by almost 100,000 residents in two decades, yet housing prices have remained relatively stable. How they achieved this was simple - they approved hundreds of thousands of new dwellings every year.
Japan has an approach to community consultation and NIMBYism called Future Design that balances the needs of existing residents with the need for the city to enact long term decisions that will benefit future generations. They also set their housing policy at the national level, so local concerns about a new townhouse development five streets away has to compete with every other national election issue.
Which is all a long way of saying that even if Australia significantly reduced immigration, this is unlikely to solely solve the housing crisis in the big expensive cities.
Tokyo's over population is now falling (since 2018), yes construction levels are high but both of these factors haven't stopped new condo prices exceeding the 89 bubble peak. Same deal in China, more cement in 3 years than the US did in the 20thC, 25% vacancy rate, yet sky high prices. It's a credit/tax and mortgage structure thing above demographics and construction levels.
Imo Japan might be heading for a major oversupply bubble into the 2026/7 GFC.
This is tangential to your point, but might we be concerned about the working age increasing too? If people are stuck in work because pay and pensions are so poor, we might consider this a bad thing for humanitarian reasons. But if we enforce that people (say) have to retire at 65 and will be cared for, maybe the working-age considerations become relevant again. Overall it may be a bit of a balancing act!
Very interesting article, particular those last couple of graphs.
A couple of questions:
1. So are you saying that by drawing an arbitrary line at age 65 we are discounting how many people continue working after 65 and therefore the “growing proportion of people over 65” rhetoric is a red herring because it doesn’t reflect a modern working life? Isn’t this what people are worried about though? That we will be forced to work into older and older age? Especially if their job is just a job and not a fulfilling career.
2. Regarding the Big Australia argument - assuming we can throw the aging population concerns out. What do you say to the argument that immigration is needed to replace shortfalls in the fertility rate in order to drive demand broadly across the Australian economy which is largely a service sector economy.
So because we don’t really create much *real* wealth here and have incredibly low economic complexity compared to say, Vietnam - we need to throw people at the economy in this Ponzi scheme-like arrangement to ensure a consistent base of demand so that that the majority of Australians’ jobs have a reason for existing.
I would love if we had a slowly shrinking population, for the reasons you mentioned. Also, only a small amount of workers is needed to take care of the elderly, if done efficiently. It means cheaper future housing, which is a wonderful future outcome.
If the population would need to grow for "economic reasons", then the same problems would exist in another 30 years, and thus continuous population growth would be necessary ad infinitum, which of course is very destructive and impossible on a finite planet.
Lucky, lucky Japanese people.
Agree that reducing immigration will take some pressure off the housing market, but a shrinking population doesn’t guarantee shrinking cities and therefore cheaper housing.
The Japanese example is not the slam dunk example it appears to be.
It is true that housing in Japan has been consistently affordable (and actually getting larger) but it's not because they cut off immigration - they also have very pro development planning policies.
Despite the country's dwindling birth rate, Tokyo is currently experiencing a population boom and subsequent rapid urbanisation, with locals migrating within Japan to the city. Some of the trendier inner neighbourhoods like Minato-ku have grown by almost 100,000 residents in two decades, yet housing prices have remained relatively stable. How they achieved this was simple - they approved hundreds of thousands of new dwellings every year.
Japan has an approach to community consultation and NIMBYism called Future Design that balances the needs of existing residents with the need for the city to enact long term decisions that will benefit future generations. They also set their housing policy at the national level, so local concerns about a new townhouse development five streets away has to compete with every other national election issue.
Which is all a long way of saying that even if Australia significantly reduced immigration, this is unlikely to solely solve the housing crisis in the big expensive cities.
Tokyo's over population is now falling (since 2018), yes construction levels are high but both of these factors haven't stopped new condo prices exceeding the 89 bubble peak. Same deal in China, more cement in 3 years than the US did in the 20thC, 25% vacancy rate, yet sky high prices. It's a credit/tax and mortgage structure thing above demographics and construction levels.
Imo Japan might be heading for a major oversupply bubble into the 2026/7 GFC.
Tend to agree and thanks for correcting me on the Tokyo population thing
This is tangential to your point, but might we be concerned about the working age increasing too? If people are stuck in work because pay and pensions are so poor, we might consider this a bad thing for humanitarian reasons. But if we enforce that people (say) have to retire at 65 and will be cared for, maybe the working-age considerations become relevant again. Overall it may be a bit of a balancing act!
And what worry that could be justified on a retiree-age/worker-age is dependent of funding pensions from a wage tax rather than general consumption.