Global Economy

Sunday 12 December 2010

AS Macroeconomics: Population issues in developing countries

By 2015, the world population will be £10 billion, mainly due to population growth in developing countries. Here is a very good video clip summarising population problems in just one city - Lagos. Unable to earn a living off the land, people move there hoping to find jobs. They live in slums with no clear legal status, so are in constant fear of eviction.
The young people interviewed in this video survive on wages of 20 pence a day. They are caught in a downward spiral: With mass immigration of unskilled labour into the city, wages have fallen to an all-time low. Supply of labour exceeds demand. Low wages earned by adults are not enough to feed the family. This means that even an 11-year old needs to go to work, increasing unskilled labour supply further. Work keeps her off school so she will only ever be unskilled and when she has children they, too, will probably have to earn money at a young age. An increase in crime and corruption is the result.

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