As a scholar of Chinese demographics, I know that the figures released by Chinese government on Jan. 17, 2023, showing that for the first time in six decades, deaths in the previous year outnumbered births is no mere blip. While that previous year of shrinkage, 1961 – during the Great Leap Forward economic failure, in which an estimated 30 million people died of starvation – represented a deviation from the trend, 2022 is a pivot. It is the onset of what is likely to be a long-term decline. By the end of the century, the Chinese population is expected to shrink by 45%, according to the United Nations. And that is under the assumption that China maintains its current fertility rate of around 1.3 children per couple, which it may not.
In short, this is a seismic shift. It will have huge symbolic and substantive impacts on China in three main areas.
1. Economy
In the space of 40 years, China has largely completed a historic transformation from an agrarian economy to one based on manufacturing and the service industry. This has been accompanied by increases in the standard of living and income levels. But the Chinese government has long recognized that the country can no longer rely on the labor-intensive economic growth model of the past. Technological advances and competition from countries that can provide a cheaper workforce such as Vietnam and India have rendered this old model largely obsolete.
This historical turning point in China’s population trend serves as a further wake-up call to move the country’s model more quickly to a post-manufacturing, post-industrial economy – an aging, shrinking population does not fit the purposes of a labor-intensive economic model.
As to what it means for China’s economy, and that of the world, population decline and an aging society will certainly provide Beijing with short-term and long-term challenges. In short, it means there will be fewer workers able to feed the economy and spur further economic growth on one side of the ledger; on the other, a growing post-work population will need potentially costly support.
It is perhaps no coincidence then that 2022, as well as being a pivotal year for China in terms of demographics, also saw one of the worst economic performances the country has experienced since 1976, according to data released on Jan. 17.
The rising share of elderly people in China’s population is more than an economic issue – it will also reshape Chinese society. Many of these elderly people only have one child, due to the one-child policy in place for three and a half decades before being relaxed in 2016.
The large number of aging parents with only one child to rely on for support will likely impose severe constraints – not least for the elderly parents, who will need financial support. They will also need emotional and social support for longer as a result of extended life expectancy.
It will also impose constraints on those children themselves, who will need to fulfill obligations to their career, provide for their own children and support their elderly parents simultaneously.
Responsibility will fall on the Chinese government to provide adequate health care and pensions. But unlike in Western democracies that have by now had many decades to develop social safety nets, the speed of the demographic and economic change in China has meant that Beijing struggled to keep pace.
As China’s economy underwent rapid growth after 2000, the Chinese government responded by investing tremendously in education and health care facilities, as well as extending universal pension coverage. But the demographic shift was so rapid that it meant that political reforms to improve the safety net were always playing catch-up. Even with the vast expansion in coverage, the country’s health care system is still highly inefficient, unequally distributed and inadequate given the growing need.
How the Chinese government responds to the challenges presented by this dramatic demographic shift will be key. Failure to live up to the expectations of the public in its response could result in a crisis for the Chinese Communist Party, whose legitimacy is tied closely to economic growth. Any economic decline could have severe consequences for the Chinese Communist Party. It will also be judged on how well the state is able to fix its social support system.
Indeed, there is already a strong case to be made that the Chinese government has moved too slowly. The one-child policy that played a significant role in the slowing growth, and now decline, in population was a government policy for more than three decades. It has been known since the 1990s that the Chinese fertility rate was too low to sustain current population numbers. Yet it was only in 2016 that Beijing acted and relaxed the policy to allow more couples to have a second, and then in 2021 a third, child.
This action to spur population growth, or at least slow its decline, came too late to prevent China from soon losing its crown as the world’s largest nation. Loss of prestige is one thing though, the political impact of any economic downturn resulting from a shrinking population is quite another.
___
Feng Wang does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
___
Shutterstock
Photo Credit: Maridav / Shutterstock
Over the last two years, U.S. workers have contended with one of the most unusual economic environments in memory.
On one hand, persistent tightness in the labor market has provided greater opportunity and wage growth for many workers. The unemployment rate today sits at just 3.7%, but the economy nonetheless continues to add hundreds of thousands of jobs each month. In efforts to recruit and retain workers in this environment, many employers have been boosting wages, especially for lower-earning workers.
But the highest levels of inflation in decades have eaten into workers’ gains. Year-over-year increases in the Consumer Price Index have topped 5% for every month since May 2021, peaking at 9.1% in June 2022. And many of the categories where costs have risen fastest are necessities that take up a large portion of household budgets, like shelter and groceries.
Shutterstock
Photo Credit: Maridav / Shutterstock
Over the last two years, U.S. workers have contended with one of the most unusual economic environments in memory.
On one hand, persistent tightness in the labor market has provided greater opportunity and wage growth for many workers. The unemployment rate today sits at just 3.7%, but the economy nonetheless continues to add hundreds of thousands of jobs each month. In efforts to recruit and retain workers in this environment, many employers have been boosting wages, especially for lower-earning workers.
But the highest levels of inflation in decades have eaten into workers’ gains. Year-over-year increases in the Consumer Price Index have topped 5% for every month since May 2021, peaking at 9.1% in June 2022. And many of the categories where costs have risen fastest are necessities that take up a large portion of household budgets, like shelter and groceries.
While lower-earning workers have struggled the most, even high earners have been impacted. After nearly two decades of steady growth, the share of workers in “six-figure” occupations—those with median annual wages of $100,000 or more in 2021 dollars—declined sharply last year. After reaching an inflation-adjusted peak at 8.8% in 2020, 2021’s share was just 6.4%.
In light of inflation’s impacts, many workers have sought out better-paying occupations. But many of the fields with the most demand for workers may not offer major increases in salary: according to the Bureau of Labor Statistics (BLS), the majority of the fastest-growing occupations earn well under $100,000 per year.
For workers seeking both plentiful job opportunities and high wages, fields in science, technology, engineering, and mathematics (STEM) are their best bet. The BLS projects 10.8% employment growth in STEM jobs by 2031, with median wages of $95,420, compared to 4.9% growth and $40,120 in pay for all other fields.
While lower-earning workers have struggled the most, even high earners have been impacted. After nearly two decades of steady growth, the share of workers in “six-figure” occupations—those with median annual wages of $100,000 or more in 2021 dollars—declined sharply last year. After reaching an inflation-adjusted peak at 8.8% in 2020, 2021’s share was just 6.4%.
In light of inflation’s impacts, many workers have sought out better-paying occupations. But many of the fields with the most demand for workers may not offer major increases in salary: according to the Bureau of Labor Statistics (BLS), the majority of the fastest-growing occupations earn well under $100,000 per year.
For workers seeking both plentiful job opportunities and high wages, fields in science, technology, engineering, and mathematics (STEM) are their best bet. The BLS projects 10.8% employment growth in STEM jobs by 2031, with median wages of $95,420, compared to 4.9% growth and $40,120 in pay for all other fields.
And one of the most promising jobs of all is software development. The U.S. currently employs around 1.3 million software developers, who earn a median wage of $120,730. Additionally, the outlook for software developers is bright as employment in the field is projected to grow by 26% by 2031—significantly faster than the projected growth for all occupations on average. Other STEM jobs including computer and information systems managers, medical and health service managers, and pharmacists also rank highly for jobs with six-figure earners.
And one of the most promising jobs of all is software development. The U.S. currently employs around 1.3 million software developers, who earn a median wage of $120,730. Additionally, the outlook for software developers is bright as employment in the field is projected to grow by 26% by 2031—significantly faster than the projected growth for all occupations on average. Other STEM jobs including computer and information systems managers, medical and health service managers, and pharmacists also rank highly for jobs with six-figure earners.
Due to differences in states’ industry makeup, the concentration of high-earning workers can vary substantially by geography. States that have more workers in well-compensated fields like tech, finance, health, or law tend to have the greatest share of workers bringing in more than $100,000 annually. Massachusetts leads the nation with a 17.3% share, followed by California at 16.6% and New York at 14.1%.
A six-figure job will put workers in a comfortable financial position in almost every part of the country, but due to differences in cost of living, a six-figure salary goes further in some places. Residents in these ideal locations enjoy both a large number of well-paying jobs and a cost of living below the national average, allowing them to make the most of their money. Many of the cities where this is the case are found in Southeastern states that have boomed recently with job growth in fields like tech, finance, and health sciences. North Carolina stands out, with its two largest metros of Raleigh and Charlotte topping the list of affordable cities with the most six-figure jobs. And while the fast-growing Sun Belt features prominently on the list, a number of Rust Belt locations including Detroit, Milwaukee, and Cincinnati also rank highly.
The data used in this analysis is from the U.S. Bureau of Statistics and the U.S. Bureau of Economic Analysis. To determine the affordable metropolitan areas with the most six-figure jobs, researchers at HowtoHome.com calculated the share of employees in occupations where the median wage is over $100,000 and the cost of living is below the national average. In the event of a tie, the location with the greater total number of employees in occupations where the median wage is over $100,000 was ranked higher.
Here are the affordable U.S. metropolitan areas with the most six-figure jobs.
Due to differences in states’ industry makeup, the concentration of high-earning workers can vary substantially by geography. States that have more workers in well-compensated fields like tech, finance, health, or law tend to have the greatest share of workers bringing in more than $100,000 annually. Massachusetts leads the nation with a 17.3% share, followed by California at 16.6% and New York at 14.1%.
A six-figure job will put workers in a comfortable financial position in almost every part of the country, but due to differences in cost of living, a six-figure salary goes further in some places. Residents in these ideal locations enjoy both a large number of well-paying jobs and a cost of living below the national average, allowing them to make the most of their money. Many of the cities where this is the case are found in Southeastern states that have boomed recently with job growth in fields like tech, finance, and health sciences. North Carolina stands out, with its two largest metros of Raleigh and Charlotte topping the list of affordable cities with the most six-figure jobs. And while the fast-growing Sun Belt features prominently on the list, a number of Rust Belt locations including Detroit, Milwaukee, and Cincinnati also rank highly.
The data used in this analysis is from the U.S. Bureau of Statistics and the U.S. Bureau of Economic Analysis. To determine the affordable metropolitan areas with the most six-figure jobs, researchers at HowtoHome.com calculated the share of employees in occupations where the median wage is over $100,000 and the cost of living is below the national average. In the event of a tie, the location with the greater total number of employees in occupations where the median wage is over $100,000 was ranked higher.
Here are the affordable U.S. metropolitan areas with the most six-figure jobs.
Will an aging, shrinking population put the brakes on economic growth? CFOTO/Future Publishing via Getty Images.
