The Stats Guy: Why ‘peak humanity’ is nearer than you think

It's Australia v Germany in Simon Kuestenmacher's latest look at the stats.

It's Australia v Germany in Simon Kuestenmacher's latest look at the stats. Image: TND

Let’s step away from our focus on the here and now and answer a delightfully big question.

When will we reach peak humanity?

When will planet Earth see the maximum of human inhabitants? What will this mean for Australia?

The question is obviously an important one. Our penchant for growth might well stem from the seemingly never-ending increase of the human population. If there are more of us, we need more resources, more space, more of everything.

Whether the global population grows, or declines depends on how many babies are born and how many people die every year.

Even though our global population continues to grow older as better healthcare and fewer wars increase the average life expectancy, the total number of annual deaths will only continue to rise on an ageing planet.

While we would have expected around 59 million global deaths for 2020, COVID-19 drove this number up by at least three million, according to the World Health Organisation.

Declining fertility

How many babies are born every year is linked to a single number, the total fertility rate. That figure describes the average number of children born to a woman in her lifetime. If the global fertility rate is below the replacement level of 2.1, global population shrinks.

The reason the replacement rate isn’t 2.0 children is that we need to account for infant and child mortality as well as gender imbalances.

Conventional wisdom long suggested that we humans will continue to grow our population until we create famines and create suffering at unimaginable scales.

Good news! That’s not what current demographic projections think the world will look like.

I am showing the two most well-known global population forecasts in this chart. The UN Population Division’s ‘Median Variant’ is by far the most quoted population projection. It assumes that we reach peak humanity at just under 11 billion around the year 2100. That suggests we need to feed, house, and educate an additional three billion people.

In 80 years, we face the challenge of a declining global population, a world of abandoned villages, stagnating megacities, and bustling metropolises.

The ‘Median Variant’ is just one of several scenarios published by the UN. Their low-ball estimate has the world top out at 10 billion by 2080 and their extreme scenario has the world reach its population peak at 12.7 billion by 2100.

Fewer warm bodies?

These days more and more demographers disagree with the UN’s population projections.

The Wittgenstein Centre for Demography and Global Human Capital at the University of Vienna produces the second-most-quoted set of global population forecasts.

According to the Austrians, we will reach peak humanity by 2070 at only 9.4 billion.

An increasing number of researchers find even the Wittgenstein predictions to be too high. The Lancet recently published a piece suggesting we will see a population peak of under 10 billion as soon as the mid-2060s.

If you are under 40, there is a fair chance you’ll see peak humanity in your lifetime.

Considering we have finite resources on this planet, it comes as a relief to hear that we’ll have fewer mouths to feed. To understand the challenges a shrinking population brings, we can look at Japan today or at China in five years.

Japan reached its peak of 128 million people a decade ago and has been slowly shrinking ever since. Japan was very lucky to have become wealthy before the population started ageing and retiring at high rates.

To counter the double-whammy of ageing and shrinking, Japan invested heavily into robotics and automation, changed its social contract to encourage women to remain in the workforce after marriage, and even changed its longstanding restrictive migration policies – Japan is now home to over two million migrants.

China will face similar challenges to Japan but at a much higher rate. In about five to eight years, China will peak at just under 1.5 billion people, before starting to shrink at a rate of about five million people per year.

The problem for China is that it won’t be as rich as Japan was when it started shrinking, and hundreds of millions of elderly Chinese face a poverty-stricken retirement.

This Chinese demographic cliff is the reason why the nation’s leaders will do anything to keep GDP growth high – it won’t be enough, though, to counter the demographic forces.

The one-child-policy will haunt China. Nations like China will have to burden their young with high taxes and lower living standards to finance an ever-aging society.

Young Chinese will therefore increasingly look to move abroad, will seek out younger, more agile nations where their economic security can be guaranteed.

Fighting for talent

An ageing and shrinking planet will lead to a large population reshuffle. We will see the international war for talent increase. Countries that manage to remain young by importing workers in their 20s and 30s will be the winners.

Retirement planning will become increasingly important. Superannuation schemes, where every worker owns their own retirement bucket, will become more common across the globe.

Demographically speaking, Australia is well positioned to succeed in a shrinking and ageing world. We have plenty of room to accommodate more young people to soften the effects of an ageing population, and we already have a decent national retirement scheme in place (which will need to be tweaked to work for the poorest quarter of the country as well).

In that scenario Australia will grow even when the planet is shrinking. We will become much more culturally diverse and this suggests we must be much more proactive in helping our new arrivals to assimilate.

On the other hand, we might also need to become more selective and set stringent language requirements to ensure all residents have a common language.

We also will need to be realistic about just how big the coming population growth is likely to be and plan accordingly. In the past two decades we failed to grow infrastructure and social programs at the same rate as we grew our population.

We’d be fools to repeat the same mistakes.

Demographer Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. Follow Simon on Twitter or LinkedIn for daily data insights.

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