> That doesn't mean there is demand. If I start eating more rice and beans, that doesn't mean I'm in the market for steak. Class sizes are a hot topic here too. It is not because we can't come up with enough teachers, it is because the current government doesn't want to hire more teachers. Are you sure that is not what is going on there too?
They didn't suddenly make these changes because they want to provide worse education, certainly. It's true that demand is weak in the sense they're not paying enough to keep teachers in the profession, or draw back those who left—it's taking some time for school districts (run by elected school boards, at least in much of the US, if not in all of it, and with funding largely determined by public votes on taxes and bonds) to catch up with the current "going rate" for the level of education they used to provide, just four years ago, at the tail of a decade of stagnating wages (pay freezes that were never made up, so, cuts; inflation adjustments that didn't quite keep up with even pre-pandemic inflation rates) punctuated by the pandemic, an inflation spike, and a sharp jump in bottom-end wages in the rest of the economy. I suspect many districts will ultimately not meet the new rate, and education quality will settle into a new, significantly worse level in much of the country (a "new normal", if you will) but right now they still want more staff than they're able to obtain, as they try to return to the state of things pre-pandemic. Once they accept the new situation and stop so-trying, yes, I think it'd be fair to say that demand has dropped, as they'll be aiming for a lower level of quality than they are now. Maybe they'll surprise me, though, and voters will decide to make up the ~30% drop in total comp teachers have seen (around here, at least) since 2005 or so. Doubt it, but maybe.
So, in a sense, I think we're headed to what you're describing as "reduced demand", but right now schools are still trying to get back to pre-pandemic staffing levels, though their funding has yet to increase enough to make that happen—and I doubt it will. I expect education to become/remain a lot worse, instead, as average teacher quality drops, class sizes grow, time in class is reduced or remains at already-reduced levels rather than rebounding, and opportunities offered to students are withdrawn.
Certainly, the problem isn't that the supply-side of the teacher equation is constrained, in the US, but that the career's just not as appealing anymore (which, again, I can see why you'd describe that as insufficient demand)
Many families will eat some of what could have been increased school funding, in the form of higher childcare expenses; taxes won't go up much or at all; and public education will get worse, is my prediction for the mid-term trajectory of public education in (at least much of) the US. Probably going to be lots of opportunities for startups to grift public dollars for ineffective computer learning systems, though, as schools desperately try to compensate for all of that without raising taxes (or reducing administration overhead...). Maybe cheap "para-educators" monitoring classrooms while kids watch YouTube lectures? Who knows. Probably lots of things will be tried, and none of them will help much, if history is any guide.
I'd expect a boom market for tutors in the nearish future in the US, as the above state of affairs becomes more widely-appreciated. Not many parents can afford actually-consistently-better-than-public-schools $25k+/yr private schools, or are willing/able to homeschool, but quite a few can afford some tutor hours each month—and they're going to need them, if they don't want to lose ground. Kids whose parents can't do that, or choose not to, will join a widening cohort of students whose future prospects are... grim.
(for bonus fun, we're speeding toward a healthcare cost crisis, and we've got a retirement crisis—a paucity of retirement savings, in every generation after the "Boomers", with worse at-same-year-of-life savings rates for each subsequent generation and already a large gap between "X" and "Boomers", that is—all set to hit more or less at the same time. I reckon we'll have beat the odds if we still have anything resembling free and fair elections by 2050, what with all those stressors on the system and the increasing sophistication of political-legal games-playing, plus stuff like the gradually-worsening housing supply & ownership consolidation problem)