Implications of the Global Baby Bust

Excellent essay over at Foreign Affairs on the coming problems of world underpopulation, the so-called "baby bust." Phillip Longman looks at falling birth rates around the developed and developing world, meeting the promises of retirement security, and how it all may shake out. You should read the whole thing, and it's a bit long, so I will address a few points here.

Although many factors are at work, the changing economics of family life is the prime factor in discouraging childbearing. In nations rich and poor, under all forms of government, as more and more of the world's population moves to urban areas in which children offer little or no economic reward to their parents, and as women acquire economic opportunities and reproductive control, the social and financial costs of childbearing continue to rise.

This is what the social scientists and science fiction writers of the Sixties and Seventies failed to recognise. I can remember all the doom'n'gloom over a world swimming in people. Soylent Green anyone?

That didn't happen. What experts quickly discovered was that, freed of the shackle of pregnancy by the Pill and by on-demand abortion, free of religious pressures to produce children, free to pursue their own education and careers, women did so in droves. Of course, these same women stopped having kids. Everywhere that Western educational and cultural norms have taken hold, the same has happened or is happening. China's population control, the only exception, has come at the point of a gun.

This fact alone would seem to argue for the Bush Doctrine of spreading liberty and freedom. We haven't been picky if newly-democratic nations tend to fall into the European model of social democratism, which accomplishes the same thing population-wise. What has always mattered is women: giving them reproductive control and occupational options.

A nation's GDP is literally the sum of its labor force times average output per worker. Thus a decline in the number of workers implies a decline in an economy's growth potential. When the size of the work force falls, economic growth can occur only if productivity increases enough to compensate. And these increases would have to be substantial to offset the impact of aging.

One thing not mentioned by Longman is robotics. This can go a considerable distance in improving productivity, though there are natural limits. We in America have come nowhere near those limits, so watch for robotics to become a buzzword in the coming decades.

Theoretically, raising the retirement age could help to ease the burden of unfunded old-age benefits. But declining fitness among the general population is making this tactic less feasible. In the United States, for example, the dramatic increases in obesity and sedentary lifestyles are already causing disability rates to rise among the population 59 and younger. Researchers estimate that this trend will cause a 10-20 percent increase in the demand for nursing homes over what would otherwise occur from mere population aging, and a 10-15 percent increase in Medicare expenditures on top of the program's already exploding costs. Meanwhile, despite the much ballyhooed "longevity revolution," life expectancy among the elderly in the United States is hardly improving. Indeed, due to changing lifestyle factors, life expectancy among American women aged 65 was actually lower in 2002 than it was in 1990, according to the Social Security Administration.

This essay also makes the point elsewhere that we do face a Social Security crisis, but for reasons like those above. And it was written nearly a year ago, before the most recent political debate.

This is going to become crucial in the next couple of decades, so will we be seeing more and more intrusion by the government, or by cost-conscious insurance companies? Will there be a return to a sort of "means testing" based on weight and overall physical fitness? Don't be surprised.

Current population trends are likely to have another major impact: they will make military actions increasingly difficult for most nations. One reason for this change will be psychological. In countries where parents generally have only one or two children, every soldier becomes a "Private Ryan" -- a soldier whose loss would mean overwhelming devastation to his or her family.

In America, we've been seeing more and more of this since Vietnam. It's an effective anti-war strategy, which is why the media is drenched with it since the Second War in Iraq. Even with an all-volunteer Army (an important change too many don't consider), we'll still find it harder and harder to justify sending soldiers to die.

The other side of this is China, which already has an excess male population (ie. men who will never marry) in the tens of millions and will see that grow in the coming decades. Military planners don't need a lot of fancy equipment when they can send in a million-man force in any given assault. This, I think, will have consequences for Taiwan and North Korea, possibly even resource-rich Siberian Russian. Turning an army of men loose on an occupied nation, where they can have a slightly better chance of gaining a wife, has to have some appeal to Chinese leaders.

According to the International Monetary Fund (IMF), the imbalance between what the U.S. federal government will collect in future taxes under current law and what it has promised to pay in future benefits now exceeds 500 percent of GDP. To close that gap, the IMF warns, "would require an immediate and permanent 60 percent hike in the federal income tax yield, or a 50 percent cut in Social Security and Medicare benefits." Neither is likely. Accordingly, in another 20 years, the United States will be no more able to afford the role of world policeman than Europe or Japan can today.

What Social Security crisis? American political leaders of the Right have already proposed shifting some of the burden of NATO back to Europe, but that's not going to happen. They just can't afford it. Their welfare states are overburdened already and facing relying on foreign, unassimilated workers to keep it going. You think those immigrants will join in?

European Union expansion east, to the newly democratic nations of the old Soviet sphere, can make a hollow military practicable by creating an enormous buffer zone between Russia and Europe. But Russia is already nervous by the encroachment and is making noises. They won't be able to afford to do anything about it for years, unless they can find a way to end the oligarchs and move to open markets, letting their economy grow. That will mean Russia has to import its own foreign workers, most likely from the Asian Islamic nations of their south and south-east. Which puts them into this problem, too; especially given their current negative population numbers.

Population aging is also likely to create huge legacy costs for employers. This is particularly true in the United States, where health and pension benefits are largely provided by the private sector. General Motors (GM) now has 2.5 retirees on its pension rolls for every active worker and an unfunded pension debt of $19.2 billion. Honoring its legacy costs to retirees now adds $1,800 to the cost of every vehicle GM makes, according to a 2003 estimate by Morgan Stanley. Just between 2001 and 2002, the U.S. government's projected short-term liability for bailing out failing private pension plans increased from $11 billion to $35 billion, with huge defaults expected from the steel and airline industries.

There's a whole section of the essay looking at these kinds of costs, along the costs of a larger, more sustaining retirement state. Did you read that: $1800 per vehicle for pension costs?

Indeed, according to a study by the UN Population Division, if the United States hopes to maintain the current ratio of workers to retirees over time, it will have to absorb an average of 10.8 million immigrants annually through 2050. At that point, however, the U.S. population would total 1.1 billion, 73 percent of whom would be immigrants who had arrived in this country since 1995 or their descendants....

Another is the prospect of a cultural backlash against immigrants, the chances of which increase as native birthrates decline. In the 1920s, when widespread apprehension about declining native fertility found voice in books such as Lothrop Stoddard's "The Rising Tide of Color Against White World-Supremacy," the U.S. political system responded by shutting off immigration. Germany, Sweden, and France did the same in the 1970s as the reality of population decline among their native born started to set in.

I can't find it now, but I remember reading last year that most to all of the population increase in the USA in the last census came from immigration. If you factor that back out, the US had flat population numbers!

The cultural backlash is already well underway. If we follow past history and shut down immigration for a generation, to absorb the most recent groups, then we too face shrinking worker numbers, exacerbating the problem immigration is masking. But seen another way, some things begin to make sense.

The Bush (and previous Republican administrations) have shown almost no interest in stopping the flood of illegals from Mexico. Could it be that they've done the math and seen that Mexican immigration is necessary? Will Mexico's coming hyper-aging population problem (read the whole essay, OK?) mean a reverse flood back, to take care of aging parents, or an ever more growing flood of young workers taking American wages and sending larger and larger percentages back home? What kind of economic effect will such a large outflow of potential capital and consumer spending have on our economy?

So where will the children of the future come from? The answer may be from people who are at odds with the modern environment -- either those who don't understand the new rules of the game, which make large families an economic and social liability, or those who, out of religious or chauvinistic conviction, reject the game altogether.

This is where the so-called "clash of civilisations" comes into play. Arab and Asian (a forgotten, but large group) Muslims will continue to grow in numbers, versus Christians, for quite a while. It's not likely that Muslim resistance to the West is motivated by a meta-awareness of this issue. But the functional result is still to see growing imbalance between Christian (European, American, and shrinking) populations and Muslim (Asian, Arab, and growing). Given the already large numbers of Muslims in the world, this will affect the problem.

But there's also, as the essay discusses, the growing movement in America for Christian cultures to disconnect from the larger culture. While this has the net effect of increasing white, European numbers, it's hard to see how this is sustainable when the attractions of delaying or avoiding children for material prosperity and career success are so strong. Some of the proposed solutions, unfortunately, involve government intervention.

There's another mode, which Longman only barely touches on: following the African-American model of having children. the dominant paradigm is from the upper-class ideals of modern American feminism, which is still largely class-driven and white-, European-oriented. Overwhelmingly, we see feminism approach motherhood as something to do after career success. More and more, medicine and culture are deformed to allow older women to have children at a time of life when their bodies are less well-suited.

In the African-American community, it's far more common for young women to have children, then enter the workforce and later still work on educational success. Many black women begin having children in their late teens, when women's bodies are better suited to pregnancy. Also, grandmothers are often still in their thirties and forties and better capable of providing post-natal support.

Institutional feminism stigmatises this model, but it seems to offer some attractive advantages. First, education is much simpler to fit around a child-raising schedule than a job. By the time a woman completes higher education or job training (or begins to seriously pursue a formal career) her children are of school age. The woman's career is then not disrupted by a need for extended leave, nor are businesses stressed by the demand to keep options open for leave-takers.

In this light, educational financial support serves two complementary purposes: first, we get a better-educated woman and second, it indirectly encourages child-rearing by smoothing out the complexities. It surprises me that this isn't explored more.

How can secular societies avoid population loss and decline? The problem is not that most people in these societies have lost interest in children. Among childless Americans aged 41 years and older in 2003, for example, 76 percent say they wish they had had children, up from 70 percent in 1990. In 2000, 40-year-old women in the United States and in every European nation told surveys that they had produced fewer children than they intended. Indeed, if European women now in their 40s had been able to produce their ideal number of children, the continent would face no prospect of population loss.

The problem, then, is not one of desire. The problem is that even as modern societies demand more and more investment in human capital, this demand threatens its own supply. The clear tendency of economic development is toward a more knowledge-based, networked economy in which decision-making and responsibility are increasingly necessary at lower levels. In such economies, however, children often remain economically dependent on their parents well into their own childbearing years because it takes that long to acquire the panoply of technical skills, credentials, social understanding, and personal maturity that more and more jobs now require. For the same reason, many couples discover that by the time they feel they can afford children, they can no longer produce them, or must settle for just one or two.

This is the nub of it for America. Government cannot encourage religion, but it clearly must not impede it. Government can encourage children by subsidy, possibly, if the focus is changed. The African-American model I talked about is an attractive possibility that demands further research.

I've only scratched the surface of this informative essay with these few excerpts. It's got wheels in my head turning like crazy. Current political trends don't seem to take into account the demographic trends underlying our society. Yes, war or disease could change the equations radically. But you can't plan for that, only alter plans afterward. You are encouraged to Read The Whole Thing.