I understand what you're saying. I just disagree with your premise.
What matters more is the ratio of producers to dependents (defined as people who do not produce, but depend on being supported by those who do).
Everyone produces. What is important is directing the production in a profitable fashion.
Less demand = fewer businesses. Fewer businesses = less economy of scale.
What will happen is that things will get more expensive to produce (per unit cost), and productivity will go down - once you have everyone under 40 or so afflicted by this.