Insult to Injury: The Media and the Birth Bust
The impact of today’s empty cradle goes far beyond a generic reduction in labor supply.
The New York Times has discovered that there is a fertility decline in Europe. Slate is spinning the same story with a superficial opinion piece so blinkered, it’s dangerous.
The first problem, as always, is that neither author realizes the difference between the fertility rate and the birth rate. Fertility, as the average number of children born to a woman over her lifetime, is a long-term measure that takes decades to reach the lows we are seeing. The birth rate is just an annual measure that may be affected by things like recession, but can bounce back very quickly. It takes many years of consistently low birth rates to get to the low fertility rates we are now seeing around the world. And it would take many years of consistently higher birth rates to recover. If the long term roots of this spiral go uncorrected, there will ultimately be no recovery because, in the very long run, lower fertility means there are fewer mothers to give birth. So, for the record, a sudden and slight uptick in the European economy is not going to solve this problem. The cause goes too deep.
The economic implications of the birth dearth are often shrugged off with a superficial, “Oh well, we will just improve productivity or import more immigrants” judgment. The scope of this problem goes well beyond a reduction in total labor supply and the resulting negative impact on GDP. Anyone who got a passing grade in Econ 101 can come up with that analysis—there are other, more intractable implications—but let’s just take these two simplistic suggestions one at a time.
The black line is the replacement rate, 2.1 births per female over her entire child-bearing years. The later the first birth, the smaller the number of years left and, usually, the fewer births women will have.
First, what does immigration look like as a solution? These writers do not seem to realize that the birth bust is not confined to a handful of European countries plus Japan, but is a long term global trend. Canada, for instance, has a fertility rate lower than Denmark, the country featured in both articles for allegedly changing its sex ed curriculum to encourage pregnancy. Singapore, Taiwan, and Hong Kong are even farther down the fertility toilet than Japan. And this is not to mention one-child-rule China. The only places still pumping out babies at a high enough rate to have a surplus of people for actual “export” are poor, conflict-ridden countries, mostly in Africa.
Bear in mind also that we are not looking at a generic labor shortage, but a future with a vast skills gap. The biggest need will be in managerial posts. Most jobs will require a university education and considerable familiarity with technology. Already, 60% of new jobs require skills that only 20% of the world population has. In the countries that still have high fertility rates, most of the children don’t even go to secondary school. So the “extra” people in Africa (or South Asia or wherever) are not going to fill the bill, even if the Western nations could be convinced to shrug off their current xenophobia and stop trying to seal their borders.
Instead, what the low fertility countries will need is more educated workers. For that, women willing to pop out babies is not enough. You need parents who can afford to bring children up and educate them. It has become outrageously expensive to rear and educate children to a university level. Two incomes are required to pay the freight for bringing even one child to that point, never mind the two children needed for a society to stay at replacement rate. It takes money, but it also takes time.
In this one, the black line is equality with men. So, if you are reading that, in every EU state, women enroll in higher education in equal to or greater numbers than men, you have it right.
Employers penalize young women because they anticipate that the time to cultivate children will somehow hurt their bottom line. (Like, maybe she will have to go home after working 9 hours instead of 12.) This conflict lies at the core of the baby bust: parents can’t afford to have a child without a second income, but companies are hostile to working mothers.
So, what happens is that couples put off having children longer and longer, trying to establish the woman’s career before taking the long-lasting financial hit that comes with the mommy track. Otherwise, the women will never realize the value of their education, never mind achieving their dreams.
Importantly, this failure to realize the investment in education hurts nations as much as it hurts families. A substantial number of the developed countries actually have more females than males currently enrolled in tertiary education. The failure to fully include these highly-skilled workers into the economy wastes resources and, thus, reduces national competitiveness. Yet employers are so prejudiced against women that they would rather import educated males from another country than to treat a highly qualified local labor resource fairly.
These are the same guys who will tell you that the “explanation” for why women are paid less and don’t advance is that women have children (as if they are actually blaming the women for making this choice). I will never understand why people can’t see that if having children is the accepted “explanation” for poor career prospects, the obvious solution will eventually be not to have them—or to put having them off until it’s too late.
What about the other idea? You know: “Oh well, no big deal. We’ll make it up with higher productivity.” People are already working 24/7/365, checking their email before they throw back the sheets in the morning and writing reports on the weekends. These folks are so “productive” we can legitimately question their clarity of thought.
People working harder is not the solution. Instead, this higher productivity is supposed to come from the all-purpose, present-day panacea, “technology.” Yeah, so better machines and super software may help maintain GDP, but such innovations do nothing for the young couple who still needs two pay checks to have a child they can bring up to run the machines, interpret the data, and so on. “Productivity” is a solution for companies, not families.
Well, so this is where some uninformed person writing in the comments will always say something like, “So maybe we just don’t need that many people because the machines can do the work instead. Maybe it’s ok to shrink the population. It will help the environment.”
Women’s Economic Opportunity (a composite measure designed by the Economist) tracks directly with national competitiveness (a composite from the World Economic Forum). This is true because national competitiveness is a measure that reflects how well a country uses its resources. Failing to include half your population–especially the more educated half–is a hugely inefficient use of resources.
The Econ 101 analysis really shows its limits here. The impact of the birth dearth will reverberate through the economy in many other ways besides shrinking the labor supply. It will challenge markets like nothing ever has. And it will affect the quality of life for everyone.
As I explained in a speech at the UN just two weeks ago, the coming change in the age structure will create dramatic shifts in family dynamics and purchase behavior. In some countries, like Germany, the population will morph over the next ten years into a place where most of the population will be past retirement age. The aged dependency ratio will rise to a precarious level.
The easy answers are on the tip of the tongue, right? Raise the retirement age or teach all the old folks to be entrepreneurs. But, actually, the bulk of the older cohort will be moving toward that phase of life where they can’t really even fend for themselves any more. (The peak of the Baby Boom is between 60 and 62 today. In ten years, they will be in their early 70s and the first half of the Boomers will be closing in on 80.) Mobility becomes problematic and so does memory. What were once routine physical or mental tasks present huge challenges.
Taking care of the aged makes raising children look like. . . well, child’s play. An older person’s needs are often just as great, but their larger size and remembered independence can make them very difficult to contain or even to assist. It’s a nonstop nightmare and can go on for decades.
There will be an enormous population stretching from retirement age up to their 80s and 90s. This huge cohort will have to depend on an age group that is much smaller, not only to pay wages into the system, but to run to the emergency room when they fall, refill their prescriptions, and keep them from wandering into the street. The I-don’t-know-what-I’m-talking-about answer to this problem is (Eureka!) robots. I’m sorry, folks, but robots are not to a point where they can responsibly watch a person with dementia who is determined to drive. This problem will be upon us too soon for that.