Wednesday, March 06, 2024

Canada is in a Population Trap

Canada news:
Much has been written of the negative impacts of rapidly rising immigration on the housing and the affordability crises and on essential services like healthcare. Now, the negative effect on the economy is being analyzed, and a previously unfamiliar term is appearing to describe it – “population trap”.

Appropriately, two economists from the National Bank of Canada (NBC) begin a report on the topic with Oxford’s definition: “Population trap: A situation where no increase in living standards is possible, because the population is growing so fast that all available savings are needed to maintain the existing capital-labour ratio.” (The capital-labour ratio is the ratio of capital employed to labour employed.)

Predictably, if the machinery and equipment employed grows relative to the labour employed, the labour productivity or efficiency of the economy increases and living standards typically rise. But when the capital-labour ratio fails to keep pace with a rapidly rising population, living standards or GDP per capita cannot improve. That is the “trap”. In Canada currently, as immigration surges, the capital-labour ratio has actually been declining, and living standards have been following. ...

The 2022 and 2023 surges are unprecedented. The NBC report observes “current population growth appears extreme” in relation to the absorptive capacity of Canada’s economy and considering our demographics are similar to the OECD average. The report says the absorption challenge is most evident in housing, where the housing supply deficit in 2023 more than doubled the historic average.

The NBC notes that population is growing so fast, we don’t have enough savings to stabilize the capital-labour ratio or to grow GDP per capita. “Simply put, Canada is in a population trap for the first time in modern history.”

Canada is destroying itself with massive immigration.


CFT said...

There is this little thing:
Supply and Demand.

It is the basis of all economics no matter what you call, or pretend to call various methods of economic activity. Command economies are not an exception as Russian and China can attest.
Believe or not, ANYTHING can be put into the Supply category, and you can do various analysis of how that will effect Demand.

Now, put 'people' into your supply category. What does this imply? The more you increase your supply of people, yes my dear Gloucon, your demand for people will eventually plummet. Who knew? Anyone who paid attention in economics 101 and who wasn't shill lobbyist, socialist, communist, far leftist, or who eats Woke agenda for breakfast.

If this idea offends one's precious ethical sensibilities, for context you can put one of the most precious metals on the planet 'gold' into the supply category, and see what happens if you could increase it ad infinitum. It's value or demand decreases. This same experiment can be done with anything you like, even soda pop. Diminishing returns is also a real thing, no market is infinite, and ALL resources are finite, though too much of anything finite is also a bad thing as anyone who knows what drowning is knows.

Humans for some reason come with a default fault setting called 'I want everything even if I can't use it' (also known as greed), which is a problem that can only be mitigated by proper upbringing and internal moral restraint, sadly this upbringing/training is in rapid decline among avid materialists of all known stripes.

CFT said...

The more a country imports large numbers of people, the more pressure will be placed upon the previous inhabitants to pay for all the goodies being offered to the new immigrants. This also reflects itself in native birth rates, as in order to pay the costs, the previous citizens now have to divert more time and wealth towards immigrants instead of investing in their own children and families.

Western civilization's women are presently falling way behind replacement birth rates as they revel in their biological and cultural 'liberation'. Only rampant immigration has mitigated this slide, and the result is countries that become increasingly culturally incoherent as culturally divergent foreigners rapidly overtake natives.