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Home Publications Blogs Beat the Press Robert Samuelson Is Worried That the United States is Becoming Less Crowded

Robert Samuelson Is Worried That the United States is Becoming Less Crowded

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Monday, 09 August 2010 04:05

Yes, in the strange but true category, we have a columnist with a major national newspaper worrying that population growth in the United States could slow or even reverse. Yes, I have the same fear every time I push my way into the metro at the rush hour or get caught in a huge traffic jam. Imagine how awful it would be if cities were less crowded. It could make housing cheaper, reduce pressure on water and other resources and cut greenhouse gas emissions. Shortages of workers would drive up wages as the least productive jobs go unfilled (e.g. the midnight shift at 7-11 and parking valets at upscale restaurants). It's  a looming catastrophe if ever there was one.

Samuelson bizarrely thinks that slower or negative population growth will hurt the economy. He thinks that it will slow demand growth. There are two simple problems with this story. First, we are in an international economy, so if demand in the U.S. economy is growing less rapidly then we can sell our output elsewhere. The other problem is the big "so what?"

If we can produce everything we want in the United States and still not fully employ our workforce then we can all get longer vacations and have shorter workweeks. In a functioning economic system, having too much is not a problem -- you just work less. In the Netherlands they figured this out -- they use work sharing rather than layoffs to deal with inadequate demand. As a result its unemployment rate is close to 4.0 percent. In Germany, work sharing has been so effective that its unemployment rate is lower today than it was at the start of the downturn.

See, this is really simple for countries that have competent people guiding their economy. It is only inept economic policy that makes a shortage of demand a disaster for people and the economy. Too bad Samuelson won't discuss this failure of economic policy.

 

Comments (10)Add Comment
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written by skeptonomist, August 09, 2010 9:41
It's not a question of ineptness but of who controls the economy. For over 40 years the thrust of Fed and government policy has been to keep down wages - in other words to return to a Malthusian economy.
...
written by izzatzo, August 09, 2010 10:33
It's part of the ongoing chronic fixation on supply over demand determinants of economic output, indeed the ultimate case of supply creating its own demand via more population, which BTW is a contradiction within such a classical pre-Keynes, Say's Law framework, where the opposite is the case - less supply simply offsets and balances itself with less demand while maintaining full employment.

Again, Baker points out the obvious, that if there's not enough demand to absorb existing supply, more can be generated by sharing produced output among more willing workers, rather than wallowing in long-term predictions of fear about a shrinking population which cannot produce enough supply in the first place, which for many is little more than code for a culture war of one sort or another.

If Samuelson was a firefighter, he would never put out a fire because it would cut into his long term reserves for putting out future fires, which peak just when everything has been burned down by fires.
Another consequence
written by Brendan, August 09, 2010 10:50
It's worth noting that another consequence of negative population growth will be that as supply of labor lags behind demand, lower paying jobs will be left with labor shortages. At this point, we'll be FORCED to turn to immigrant labor to fill the demand.

Also, negative population growth is not solely an American issue. Already, many developed nations are facing this issue. In time (likely less than three generations), the US will actually have to COMPETE to attrack immigrant workers and will have to offer INCENTIVES for immigrants to choose to work in the US, over other nations trying to fill their labor supply shortages.

Quite a turnaround from the current "attitude" towards immigration.
But you don't understand Mr. Baker!
written by Nick B in DC, August 09, 2010 11:23
We have to be the biggest! We must continue to grow, population, GDP, everything! How else can we continue our global hegemonic conquest?!? Remember, empires require constant expansion...

Oh, I second the metro-rush sarcasm... but they are designed poorly. I think if they were NYC style you would have WAY more standing room, and many more people.
Dense people
written by diesel, August 09, 2010 12:35
A few years ago, a Republican woman politician expressed the same dismay as Samuelson does, but she backed up her feelings with some hard empirical data. The U.S., she said, is much less densely populated than the Netherlands and Japan and so can easily take on more population. Then she gave some numbers relating people per square mile or kilometer.

Apparently, it never occurred to her that soaring mountain ranges and vast parched deserts don't provide the means to support anyone, or that areas that receive 10 inches of rainfall a year may only be good for seasonal grazing. But, hey, at least she was able to hold two concepts in mind simultaneously--pretty good for a Republican. Speaking of which, I think that of the three, Hannity, Limbaugh, and Beck (or is it OReilly?), one of them managed to finish his first semester of college.
Say What?
written by James, August 09, 2010 9:48
Working sharing is all good bc that means we have more time for vacation, family, etc. We are all into that but with less pay, can we still afford the same house, vacatation, retirement?

Does Prof. Baker suggest with work sharing, all the cost will suddenly decline at the same rate or more so standard of living will be the same as b4?

Work sharing has been implemented for many city, county, and state workers! They said they cannot wait for that furloug made permanent. Yeah.
...
written by Queen of Sheba, August 10, 2010 12:27
I for one am in favor of more population (workers), much more, as I hear all the time that the current workforce won't be able to pay enough into Social Security so I and the rest of my Boomer buddies can retire in leisure.

But the Republicans have an answer - cut Social Security benefits, ship all the immigrants back to Mexico (no matter where they're from) and force all American women to carry all pregnancies to term. That should do it.
it's not exactly news...
written by vinnie the p, August 10, 2010 2:11
...when R Samuelson says something idiotic..
...
written by Richard, August 11, 2010 8:03
Oh I find this article amusing, if one looks at the post times of Mr. Baker's commentaries on the press, they will see that perhaps Mr. Baker would be the ideal candidate to share some of his work, as his posts come in from early morning hours to late evening hours. Perhaps an unemployed comedian could fill the spot.
timberland shoes store
written by timberland for you , September 11, 2010 4:44
Tucked away in our timberland for you subconscious is an idyllic vision. We see ourselves on a long trip that timberland 6 inch spans the continent. YQ

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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