Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Information Minister in Pakistani-administered Kashmir: Five civilians killed and at least 29 others injured in shelling across the border with India
Israeli Army Radio's diplomatic correspondent quoted a senior Israeli official as saying: So he [Trump] decided to cut off contact. That might still change, but that’s the situation right now
Israeli Army Radio's diplomatic correspondent quoted a senior Israeli official as saying: Trump’s circle told him [Dermer] that Netanyahu was manipulating him, and there’s nothing Trump hates more than being portrayed as someone being played
Senior Palestinian official to Al Mayadeen: Meetings between the Israelis, Egyptians, and Qataris are all centered around the Israeli proposal, which does not guarantee an end to the war [on Gaza]
Senior Palestinian official to Al Mayadeen: “Israel” is threatening to expand the ground offensive if Hamas rejects the proposal
Senior Palestinian official to Al Mayadeen: Hamas rejects the Israeli proposal, viewing it as failing to guarantee an end to the war
Senior Palestinian official to Al Mayadeen: “Israel” is sticking to its proposal, and insists there is no alternative offer on the table for negotiation
Senior Palestinian official to Al Mayadeen: The meetings between the Israelis and the Egyptians and Qataris all revolve around the Israeli proposal
The administration was clearly looking for an off-ramp for this campaign against Ansar Allah, NBC News reports, citing US official
Trump's operation against Ansar Allah cost more than $1 billion, NBC News reports, citing US official

Falling birth rates threaten living standards in rich nations: FT

  • By Al Mayadeen English
  • Source: Financial Times
  • 15 Jan 2025 17:00
4 Min Read

Declining birth rates and aging populations in wealthy nations are driving the need for significant productivity growth to sustain living standards, according to the FT.

Listen
  • x
  • A pedestrian crossing a street with a child is seen through a taxi window in Tokyo, Monday, July 19, 2021 (AP Photo/David Goldman, File)
    A pedestrian crossing a street with a child is seen through a taxi window in Tokyo, Monday, July 19, 2021 (AP Photo/David Goldman, File)

The Financial Times on Wednesday reported that many of the world's wealthiest nations must significantly boost productivity to sustain historical improvements in living standards as birth rates continue to decline sharply.

A study by McKinsey has revealed that countries such as the UK, Germany, Japan, and the US would need to see productivity growth double compared to the last decade to maintain the same per capita GDP growth observed from the late 1990s to 2023. In France and Italy, the report indicates, productivity would need to triple, while Spain would face a fourfold increase to achieve similar results by 2050.

The findings reveal how declining birth rates threaten to disrupt economic stability in advanced economies, as the working-age population shrinks and an aging population increasingly depends on it. Without proactive measures, "younger people will inherit lower economic growth and shoulder the cost of more retirees, while the traditional flow of wealth between generations erodes," warned Chris Bradley, director of the McKinsey Global Institute.

Demographic Decline

Globally, governments are grappling with a demographic crisis exacerbated by rising housing and childcare expenses, alongside shifting societal norms, including fewer young adults forming relationships. Currently, two-thirds of the global population resides in countries where birth rates fall below the replacement threshold of 2.1 children per woman. Populations are already in decline in several OECD nations, including Japan, Italy, Greece, China, and parts of Eastern Europe.

"Our current economic systems and social contracts were built around decades of population growth, particularly in working-age groups that drive economic expansion and sustain longer life spans," Bradley noted. "This calculus no longer holds."

Related News

Russia's economy shows signs of resilience as GDP increases by 4.6%

Iran making good progress on manufacturing, economic growth: Raisi

Read more: South Korea plans new ministry to address demographic decline

To address these demographic challenges, a combination of strategies is needed, according to the report. Bradley emphasized, "It's going to have to be a mix of injecting more young people into work, longer working lives, and hopefully productivity."

McKinsey calculated that declining working-age populations could reduce GDP per capita in Western Europe by an average of $10,000 per person over the next 25 years. The consultancy highlighted Japan as an example of extended workforce participation, where 26% of individuals over 65 remain employed, compared to 19% in the US and just 4% in France. However, despite these efforts, Japan's per capita GDP growth over the past 25 years has reached only about a third of US levels.

"The demographic drag is inexorable and severe, and when it hits, boosting productivity growth becomes even more relevant," the report stated.

Productivity Crisis

For Germany to maintain past living standards, workers would need to add over five additional hours to their weekly schedules, or the proportion of people in the workforce would have to rise nearly 10 percentage points from its current level of about 80% among individuals aged 15 to 64. While the UK and US face slightly less daunting demographic pressures, countries like Spain and Italy require double-digit increases in labor force participation.

The report also pointed to the slow progress in leveraging technological advancements such as generative AI and robotics to meaningfully enhance productivity. Europe, in particular, has experienced stagnating productivity since the pandemic, widening an existing gap with the US.

Read more: Wall Street to lose 200,000 jobs as AI cuts roles: Bloomberg

Echoing similar warnings from the OECD, the report calls on governments to prepare for a future shaped by low fertility and demographic shifts, which risk undermining the prosperity of future generations.

  • Economic Growth
  • aging
  • GDP
  • birth rates
  • living conditions

Most Read

Pro-Palestinian protesters march toward the US Immigration and Customs Enforcement (ICE) headquarters, Saturday, April 5, 2025, in Washington (AP)

US House to vote on bill criminalizing boycott of 'Israel'

  • Politics
  • 3 May 2025
Throughout Operation Prosperity Guardian, current and former US military and intelligence officials expressed disquiet at the enormous “cost offset” involved in battling Ansar Allah. (Al Mayadeen English; Illustrated by Zeinab El-Hajj)

Ansar Allah triumphant: US facing Red Sea defeat again

  • Opinion
  • 3 May 2025
Pakistan downs an Indian jet and hits a military base in Kashmir escalation.

Pakistan downs 3 Indian jets, hits military base in Kashmir escalation

  • Politics
  • 7 May 2025
Trump cut off contact with Netanyahu, senior Israeli official says

Trump cut off contact with Netanyahu: Israeli media

  • US & Canada
  • Today

Coverage

All
Gaza prevails against genocide

Read Next

All
UN experts warn: Stop the genocide or witness Gaza's end
Politics

Stop the genocide or witness end of life in Gaza: UN experts warn

Israeli police attack mourners as they carry the casket of killed Al Jazeera veteran journalist Shireen Abu Akleh during her funeral in occupied al-Quds, Friday, May 13, 2022. (AP)
Politics

Israeli sniper who killed journalist Shireen Abu Akleh identified

The Department of Defense logo is seen on the wall in the Press Briefing room at the Pentagon, Oct. 29, 2024, in Washington. (AP)
Politics

Pentagon’s unused properties drain billions in taxpayer funds

Haaretz
Palestine

Israeli military avoids calling up unwilling reservists: Haaretz

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS