Based on ‘Business’ – CBC News
We tend to think economic growth comes from working harder and smarter. But economists attribute up to a third of it to more people joining the workforce each year than leaving it. The result is more producing, earning and spending.
Now this secret fuel of the economy, rarely missing and little noticed, is running out.
“For the first time since World War II, we’re no longer getting a tailwind,” says Russ Koesterich, chief investment strategist at Blackrock, the world’s largest money manager. “You’re going to create fewer jobs. … All else equal, wage growth will be slower.”
Births are falling in China, Japan, the United States, Germany, Italy and nearly all other European countries. Studies have shown that births drop when unemployment rises, such as during the Great Depression of the 1930s. Birth rates have fallen the most in some regions that were hardest hit by the financial crisis.