Part 2/9:
Economists traditionally maintain that societal advancement hinges on two main variables: labor force growth and productivity. Productivity, defined as output per worker, has been the central focus, especially in recent decades, fueling policies that aim to optimize efficiency. Nonetheless, the speaker underscores that labor force growth is equally crucial—and often overlooked.
To nurture labor force growth, two conditions must be met:
- Potential labor force expansion: This depends on population growth and reproduction. Society must sustain itself demographically; otherwise, economic stagnation becomes inevitable. Historical examples, such as Japan’s low birthrate and aging population, illustrate the consequences of demographic decline.