As populations decline in a region, either as an effect of low fertility rates or emigration, the exodus leaves in its wake fewer and fewer qualified participants for the workforce. The working-age population in Japan has been steadily decreasing since 1995, and its economy has been contracting in step with that trend. If industries are unable to find workers, they will be unable to meet levels of output necessary to stay in business. The long and short of it is: they won't produce any more stuff. And no stuff, means no money, means no more business.
Economic downturns caused by population decline not only affect households' pockets and purses, but also its level of mental health. There is a very strong relationship between economic recessions and depressions and psychological problems, including increased suicide rates, worsening of mood disorders, and feelings of helplessness and hopelessness. Not only that, but witnessing a region's population leave can have a significant impact on the wills and spirits of those few that are left behind.
Just as businesses compete domestically for customers, countries play the same game just on a global scale. Depending on what kind of resources a country is blessed with, or the mind power and special talents of its citizens is, it can have an advantage over other countries that lack. When a state suffers from depopulation, and brain-drain, it effectively loses its edge over other states and regions. All of a sudden its outputs are no longer wanted by other states, and it can't buy them up itself (no one can afford to). So it withers away because it can't compete with stronger players.
Because a decline in population often causes gender inequalities, it can afford males a disproportionate degree of power in an already out-of-whack region. Basically what happens is that in societies that favor newborn males over females, the adult, unmarried, barren males have a tendency to be "poor, transient, uneducated, and...prone to violent crime, substance abuse, and collective oppression," say Hudson and den Boer in their book on the topic. The over-prevalence of potentially hostile males can contribute to civil unrest and crime — two things a region definitely doesn't need when it's already dealing with population decline.
Perhaps the most common form that depopulation takes is the migration of people from rural regions to more urban ones. Away from the farms, and into the big cities. The only problem is cities tend to have a higher cost of living (and quality of life) in comparison, so only the most educated, able-bodied, and eligible workers-to-be can afford to live in them. These are the individuals that typically leave the doomed countrysides for greener (albeit concretized) pastures, which in turn causes a "brain-drain" in the rural towns. Deprived of its smartypants, the rural areas will struggle to stay current.
Especially in rural, depopulated areas, there are far fewer women than men that stay behind. Especially in the 15 — 44 age range (working age), women are far less represented than their male counterparts, a phenomenon that contributes to gender inequality and male dominance. This imbalance can have all kinds of negative consequences, not least of which is sexual assault and disenfranchisement.
The maxim in business has it that the customer is always right. But, who's right when you have no customer? That's the biggest threat to businesses in areas faced with mounting depopulation: the lack of demanding customers. Either customer bases have fled to other, thriving regions, or those that remain are so impoverished they can't afford to splurge. Businesses unable to pay their rent are forced to close down, and each shuttering causes a ripple effect throughout the entire economy.
As the unknown saying has it, what goes out must come in. With regards to population movement, hordes of people that exit ailing countrysides and rural areas will rush into cities where work is plentiful and living conditions are substantially more attractive. This migration, however, often leads to the overpopulation of the cities, which doesn't come without its own problems. Crowding in cities can often drive poverty and class inequality, and expansion in the form of gentrification only fuels this issue. Especially in young cities, overpopulation without precaution measures in place (like health and safety teams) can be a recipe for disaster: flash floods, earthquakes, and other natural disasters can wreak havoc on heavily packed communities.
Eventually, governments of every size will give up trying to help aging populations and curb depopulation. This adds gasoline to an already raging fire. It will recognize the lost cause, and cut off much if not all of its public spending to those afflicted areas. This chokeholds infrastructure, and roads, buildings, facilities, utilities (water, electricity, heat) all suffer. With depopulation comes a much decreased tax base, which raises the question: where are you gonna get the money, honey, to pay for stuff?
As the government's interest and involvement in underpopulated, and therefore underperforming, regions wanes, the alienation of the people arises in its place. Citizens with no access to public assistance, protection, or funds drifted apart from the state. This was so towards the end of the ancient Roman empire, and those that remained in the depopulating rural areas dodged drafts, declined participating in public office, and even "stopped producing as much as they might for fear that the government would reap more benefit from it than they did," writes Gino Luzzatto. All in all, depopulation and deprivation can inspire mistrust and disaffection in a state, feelings that (if stoked) can erupt in great violence.
Once the government shuts off the tap, it leaves institutions like schools and transportation networks to rot. This deprives the remaining populations with even fewer possibilities for self-betterment and survival. Not only that, but as trains, roads, and other mass transit options start to disappear, it leaves those hoping to get out with no ways of escape. They're left to languish in their misery.
Historically, a region's decline in population relative to those regions around it usually foreshadowed its invasion or military defeat. This was the case in the 19th century: France started out as Europe's superpower. When Germany started popping out children at an alarming rate, it not only caught up to France's demographic but also annexed two of the country's provinces. This is not uncommon over the course of history by any means. What it boils down to is that in matters of comparative population, there are two players: us and them. If there are more of them than there are of us, it's usually not a good time to engage in a war.
Perhaps this isn't a drastic consequence to pacifists, but to the health and survival of a state a military is crucial. The Asia Times reported on various population problems, stating that "A people without progeny will not accept a single military casualty. If this generation is the last, there will be no children for whom to sacrifice..." A rather grim interpretation, but telling nonetheless. As households stop contributing more and more children to the general population, and in turn the military ranks, the armed forces will see those ranks dwindle. This will leave the region at even more of a security disadvantage, and make them more susceptible to invasion...and loss.
If there's a silver lining to depopulation, it might just be that it gives the environment an opportunity to rejuvenate after long stretches of human-led destruction. Think of it as a breather the environment gets to enjoy after getting the stuffing beaten out of it. Fewer people means fewer people releasing carbon gases, building houses, and generally less destruction. So, what's bad for human societies is actually kind of good for everything not-human.