POPULATION AND THE SUPPLY OF WORKERS
People are necessary in the production of goods. In fact, American industry is such that labor, especially highly skilled labor, is one of our most important resources. Labor supply is to some extent a function of the total population. The number of people affects the total need for goods and thus the need for investment, workers, and other factors of production. Thus, population is needed to provide markets and to perform work, as well as for military purposes. Too rapid a growth may, however, make it difficult to expand production fast enough to maintain per capita incomes. For these reasons population growth is to be considered as a major determinant or possible deterrent of economic growth. It is necessary to examine our prospects in respect to population and labor supply to estimate whether the latter will be sufficient in quantity and quality to meet the needs of growth. The question of the numbers of our population seems always to have intrigued us. There has been a constant worry either that population would be too low or too high, declining or increasing.
Whether a growth in population is advantageous for a country depends on the relationship between population and resources and the existing level of technology. Populations can be scarce as relative to the other factors of production. In such a case a growing population can be expected to lead to increasing average returns even with no improvement in technology and would be advantageous for a country. The United States was in this position for much of its early history. Accompanied by an improving technology, the effect was a rising level of economic welfare.
A second stage in population growth occurs when population is relatively larger and further growth would lead to decreasing average returns in the absence of improving technology. However, population growth may be slow enough to permit the existing rate of technological change to offset the effects of the rising population with the re-