One of the consequences of the inverse relationship between population density and per capita consumption is declining incomes as the demand for labor fails to keep pace with the growth in supply. As per capita consumption goes, so goes employment.
I published Five Short Blasts in 2007, just before the onset of the “Great Recession.” That unemployment rose and incomes declined during the recession was no surprise and provided no proof of my theory. But a report released last week by the Federal Reserve does. The Fed released it’s 2013 update to its tri-annual “Survey of Consumer Finances.” (Link provided above.) The latest survey shows the changes in consumer finances during the 2010-2013 period, a period of recovery, following the previous release which covered the 2007-2010 period of recession.
The survey found that while Americans grew substantially poorer during the 2007-2010 period of recession, they have continued to grow poorer during the so-called “economic recovery.” Median incomes fell yet another 5% after falling 8% during the recession.
Median net worth fell another 2% during the “recovery” after falling 38% during the recession.
Wealthy Americans, the top few percent of wage earners, have fared much better. Their incomes have risen 4% during the recovery and they have completely recovered their much-smaller loss in net worth that occurred during the recession.
Economists are baffled. I’m not, and you shouldn’t be either. As long as the U.S. continues to mis-apply free trade to nations grossly overpopulated and as long as we continue to exacerbate our own worsening population problem, declining incomes and worsening unemployment is inescapable. People living in crowded conditions consume less. It’s impossible to avoid. When people consume less, less is produced and employment declines. It’s all really quite simple – simple to anyone willing to open their eyes and ponder the economic consequences of a growing population – something that economists are still unwilling to do.