Why India stands to gain as America grows older

Short of Musk having prescience about an asteroid hitting the planet and causing massive destruction of the human populace, these words have no basis in fact. A 2022 United Nations report (bit.ly/3EO7YHI) projects that the world’s population will grow from an approximate 8 billion today to 10.4 billion in 21Elon Musk, Twitter’s presumptive new boss, is known to be outspoken, and has millions of acolytes who hang onto his every word. A recent tweet by him said, “Population collapse due to low birth rates is a much bigger risk to civilization than global warming. Mark these words." Some years ago, he said, “Assuming there is a benevolent future with Artificial Intelligence, I think the biggest problem the world will face in 20 years is population collapse."

Short of Musk having prescience about an asteroid hitting the planet and causing massive destruction of the human populace, these words have no basis in fact. A 2022 United Nations report (bit.ly/3EO7YHI) projects that the world’s population will grow from an approximate 8 billion today to 10.4 billion in 2100. Also, the only region that will see an overall decline between 2022 and 2050 is eastern and south-eastern Asia. Japan has a low fertility rate of 1.3 per woman which is well below the accepted 2.1 that is needed to sustain any population at its prevailing size, and China followed a one-child policy for long. In the same period, India’s population will grow by over 250 million to overtake China’s as the largest in the world.

I think the real story behind Musk’s concerns involves shifting demographics closer to his home in the US. In what is admittedly an uncharitable view, it also seems to me that Musk’s comments are probably based only on observations of the demographics of a certain type of American—today’s majority—which, like Musk, is Caucasian.

Lots has been said about India’s “demographic dividend", which I do not need to repeat; most readers are well aware that we have a very young population, and that soon, the median working age of the Indian working professional will be 29, which means that more than half of our educated workers will still be in their twenties for many years to come. Suffice to say, however, that sooner or later, any demographic dividend must come to an end, but in India’s case, we are unlikely to worry on this score during our working lifetimes.

Things are different in Musk’s home, however. The US’s own demographic dividend ended years ago, in 1965. We don’t often dissect what is happening from a demographic perspective in the US, especially from a micro-demographics perspective. These micro-demographics strongly affect personal biases, the country’s political calculus and of course the economy.

I will draw my figures from the book Why Don’t You Like Me? by professor Mitchell Springer, which is a deep analysis of US micro-demographic trends. At current growth figures, the US will reach roughly 400 million people in the year 2058. America reached an important milestone in 2011 when, for the first time, more racial minority babies than Caucasian babies were born in a year. After 2011, most newborns have been racial minorities: Hispanics, African-Americans, Asians, and other non-Caucasians. In about three decades, Caucasians will be a minority in the US.

While this might explain some of the state of mind that Musk may have been in when he made his comments, there is actually a completely different set of numbers that we should be looking at from an Indian technologist’s perspective, whether as an exporter of technology services or products to that country, or as potential émigrés.

The single fastest-growing segment of the US population is individuals who are 55 years of age and older. The baby boomers—the generation that gave America its own demographic dividend—were born between 1946 and the start of 1965. They began turning 65 (accepted retirement age) on 1 January 2011, and are ageing past 65 at the rate of 10,000 per day, through December 2029. The last of the baby boomers will turn 65 in the year 2029, marking 2030 as the first year all boomers will be at least 65 years old.

Assuming that 1965 is the hard cut-off which defines this generation, then on 1 January 2030, each one of the surviving 78.8 million baby boomers will be at least 65 years of age. In 2022, the age range of Boomers is between 58 and 76 years. Following the baby boomer demographic dividend, far fewer Americans were born in succeeding generations, causing a vacuum in the native-born working age population.

But the immigration reform that began in 1965 added quite a large number of non-Caucasian immigrant Americans to the mix of the population in the US. Indeed, 1965 was a banner year in the US. It saw: a) the arrival of true democracy in the US, with all its citizens, regardless of race and national origin, finally getting equal rights to vote; and b) a modification of its immigration policy that removed national origin as a criterion, with the passage of the US Immigration and Nationality Act of 1965 (the Hart-Celler Act).

Prior to 1965, the national origin criterion ensured that most immigration to the US was from western Europe, which had the consequence of ensuring that the racial make-up of immigrants was mainly Caucasian. Abolishing the national-origin criterion opened up US doorways to nationals of many other countries. Indians have been beneficiaries of this key policy change for 55 years now.

Despite long queues at US embassies and a large backlog in handling immigration cases, this vacuum caused by America’s vanishing demographic dividend is bound to continue as a secular trend and will benefit India’s technology sector as well as those who want to emigrate to the US for quite some time to come.

Siddharth Pai is co-founder of Siana Capital, and the author of ‘Techproof Me’.