[FOUNTAIN]Challenges of a declining population

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[FOUNTAIN]Challenges of a declining population

With Korea’s low birth rate, the population will soon begin to decrease. It might be a rare event for future generations to have grandchildren. What kind of influence will a declining population have on us? Experts are concerned about diminishing labor power, a shrinking market, a slumping economy and weakened defense power.
But acclaimed Japanese economic commentator Taichi Sakaiya offers a different theory. He claims that a declining population will result in the development of the economy and culture. He cites the example of 15th century Italy, where the Renaissance culture blossomed. According to statistical records, the Italian peninsula had a population of 9.3 million in 1340. By 1500, the population had decreased to 5.5 million, a 40 percent drop in 160 years. The prevalence of the plague in the mid-14th century was responsible for the sharp decline.
The sudden drop in population initially caused rises in wage levels and prices. Because labor was scarce, workers and farmers had a tendency to not stay in one job but to move to employers who paid more. In today’s economic vocabulary, the flexibility of the labor market ignited a restructuring. During the Renaissance, Italy made a drastic decision to import farm products that were costly to produce at home. The system developed trade and stabilized prices.
As a result, the ratio of food consumption to total income declined, which gave Italians more disposable income. The decline in population also produced a new wealthy class. With more buying power, they spent more. Mr. Sakaiya explains that a smaller population actually served as a foundation for the new cultural movement of the Renaissance. Not everyone is persuaded by his theory. But it is an important point that the shock of a decreasing population could be buffered with proper restructuring.
What is the Korean government’s position on the declining population? Instead of looking at it as an upcoming situation to be prepared for, the government seems to consider it a problem to be resolved with certain policies.
The government is focusing on policies encouraging more children. But Korean women are not buying the government’s offers. A more plausible option might be a completely new social blueprint based on the decreasing population.

by Nahm Yoon-ho

The writer is a deputy city news editor of the JoongAng Ilbo.
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