FYR – The national income groupings are based on the World Bank Atlas method (detailed HERE) and listed in full at the articles end. High income nations have per capita incomes over $12k/yr (and as high as $80k/yr) and upper middle nations have income per capita ranging from $12k/yr to $4k/yr. This is compared with lower middle income nations with per capita income ranging from $4k/yr to $1k/yr and low income nations below $1k/yr. All population data is based on UN data and medium variant forward looking estimates.
The chart below shows the annual population change of the high and upper middle income nations, further broken down by which age segments are growing, from 1950 through 2050. Annual total population change among the high and upper middle income nations (yellow line, below) essentially double peaked in 1969 (+42 million/yr) and again in 1988 (+44 million/yr). During both those years, the 0-64 year old population increased by 38 million/yr (blue columns) while the remainder was growth among the 65 to 74 (maroon columns) and 75+ year old populations (black columns). The forward estimates assume current rates of immigration…absent that, the under 65 populations would fall away significantly faster.
The high and upper middle income nations of the world haul in 91% of the global income. The chart below details gross national income (GNI), by national income groupings. High income nations (black line, below) represent 64% of the global income while upper middle income nations (yellow line) represent 27%. The lower middle income nations (maroon line) are 3.1 billion persons in 2018 but produce just 8% and the low income nations of the world are about 700 million persons (blue line) but produce less than 1% of global income.
The end of growth among high and upper middle income nations under 65 year old populations is an absolute game changer. The remaining growth among the 65-74 and 75+ year old populations neither supplies adequate workforces nor adequate growth in consumption to justify the growth in the workforce. Workforce participation rates will continue to plunge. The under 65 year old consumer population will peak about 2022 and be in decline indefinitely thereafter. The global economy is set to suffer a massive convulsion from low interest rate fed overcapacity versus the inescapable collapse in demand.
Of course, federal government and central bank policies and activities (overt and otherwise…starting with The Farce That is the US Treasury Market like those of the EU and Japan) are driving asset prices inverse to the economic fundamentals (How Did America Go Bankrupt? Slowly, At First, Then All At Once!!! ). Ludicrous asset prices are a sign of extreme weakness and fear of what “free markets” would do absent the invisible hand(s). To highlight this rising disparity, the chart below shows US household net worth (HHNW, blue area) over $100 trillion representing the total current value of all assets privately owned versus US disposable personal income (DPI, green area) representing all income remaining after all taxation. The yellow line represents net worth as a percentage of DPI. Never has all forms of income been a smaller percentage of asset valuations (and it would be nearly 700% now had it not been for the recent farcical adjustments to DPI). Said simply, asset prices are rising far faster than the sum of all income (and this is saying nothing about the great disparity among a shrinking cadre owning the bulk of those assets and reaping the bulk of the income).
This sort of asset price fixing in the face of organic economic weakness has never worked. This time, in the face of large scale declines underway in the consumer populations of the world, this price fixing is only exacerbating an already monumental shift from a high growth to low/no growth world…and ultimately to a global economy that must remodel itself to survive for decades or even perhaps centuries amid secular economic decline.
Extra Credit – US federal debt growth per period versus 15 to 64 year old population growth versus full time jobs growth per period (below). As population growth among the 15 to 64 year old population wanes, jobs growth wanes, but debt creation goes berserk. One can only guess at the minimal jobs growth and massive debt growth over the next decade as working age population growth will be minimal (and the estimated population growth over the next decade assumes immigration at higher levels than the US is presently experiencing…so significantly lower 15 to 64yr/old population growth is not just possible but probable).
|LOWER-MIDDLE-INCOME ECONOMIES ($996 TO $3,895, 47 Nations)|
|LOW-INCOME ECONOMIES ($995 OR LESS, 34 Nations)|