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America's demographic cliff

Jul 6, 2013#1

strawman

Forget the debt ceiling. Forget the fiscal cliff, the sequestration cliff and the entitlement cliff. Those are all just symptoms. What America really faces is a demographic cliff: The root cause of most of our problems is our declining fertility rate.

http://online.wsj.com/article/SB10001424127887323375204578270053387770718.html
(text, video)

Already happening in Japan over the last few decades, America is soon to feel the pinch of an older average population.

Major points from the article (it's rather long, 7 pages printed):

Once a country's fertility rate falls consistently below replacement, its age profile begins to shift. You get more old people than young people. And eventually, as the bloated cohort of old people dies off, population begins to contract. This dual problem—a population that is disproportionately old and shrinking overall—has enormous economic, political and cultural consequences.

...

Low-fertility societies don't innovate because their incentives for consumption tilt overwhelmingly toward health care. They don't invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don't have enough workers to pay for the retirees. They cannot project power because they lack the money to pay for defense and the military-age manpower to serve in their armed forces.

...

If you want to see what happens to a country once it hurls itself off the demographic cliff, look at Japan, with a fertility rate of 1.3. In the 1980s, everyone assumed the Japanese were on a path to owning the world. But the country's robust economic facade concealed a crumbling demographic structure.

...

Conservatives like to think that if we could just provide the right tax incentives for childbearing, then Americans might go back to having children the way they did 40 years ago. Liberals like to think that if we would just be more like France—offer state-run day care and other programs so women wouldn't have to choose between working and motherhood—it would solve the problem. But the evidence suggests that neither path offers more than marginal gains. France, for example, hasn't been able to stay at the replacement rate, even with all its day-care spending.

Which leaves us with outsourcing our fertility. We've received a massive influx of immigrants from south of the border since the late 1970s. Immigration has kept America from careening over the demographic cliff. Today, there are roughly 38 million people in the U.S. who were born elsewhere. (Two-thirds of them are here legally.) To put that in perspective, consider that just four million babies are born annually in the U.S.

If you strip these immigrants—and their relatively high fertility rates—from our population profile, America suddenly looks an awful lot like continental Europe, which has a fertility rate of 1.5., if not quite as demographically terminal as Japan.

Relying on immigration to prop up our fertility rate also presents several problems, the most important of which is that it's unlikely to last. Historically, countries with fertility rates below replacement level start to face their own labor shortages, and they send fewer people abroad. In Latin America, the rates of fertility decline are even more extreme than in the U.S. Many countries in South America are already below replacement level, and they send very few immigrants our way. And every other country in Central and South America is on a steep dive toward the replacement line.

Jul 6, 2013#2

Gilgamesh

So white people are having a low birth rate and the only solution is immigrants?

America is like 90% immigrants. I think we'll be fine.

If it's the -white's only- that are worried? Well, lol?

Jul 6, 2013#3

strawman

Gilgamesh said:
So white people are having a low birth rate and the only solution is immigrants?

America is like 90% immigrants. I think we'll be fine.

If it's the -white's only- that are worried? Well, lol?

"America's total fertility rate is 1.93" That includes all races/ethnicities/etc. Further in the article he looks at the replacement rate over two centuries, and since they only had data for white people they could only continue to use them to look at the overall trend, but the main points don't apply just to whites.

But the replacement rate is under 2, and he points out that immigrants are not a long term solution. That may prop us up for a little while, but the replacement rate for latin America is also dropping precipitously, and we are seeing fewer and fewer immigrants in the US.

Jul 6, 2013#4

Tress

Overpopulation could be people, planet problem

(CNN) -- By the year 2050, China will no longer be the most populous country in the world.

That distinction will pass to India, where more than 1.8 billion people could be competing for their country's resources, according to the U.S. Census Bureau's International Data Base.

The 2007 population estimates from the U.S. Census Bureau and the United Nations Population Division set China's current population at around 1.3 billion people, and India's at around 1.1 billion. If population continues to grow at the estimated rate, such rapid growth in India between now and mid-century could lead to overpopulation and an uncertain future for the environment and the people living there.

And while organizations like the Population Institute and the United Nations Population Fund are working to promote the human rights and environmental consequences of overpopulation, not everyone views the newest population estimates with pessimism.

"Nothing ever continues at its present rate, neither the stock market nor population growth," said Doug Allen, the dean of the school of Architecture at the Georgia Institute of Technology, and an expert in the history of cities and urban design, which he's taught for more than 31 years.

"There is a substantial body of evidence that the world population will flatten out in about 30 years," he said. "Built into that model would be an assumption that more of the world's population will become urban, and as such the population will begin to decline."

Citing historical evidence of falling birthrates in urban populations, Allen looks to Italy as a current example of the phenomenon.

"Italy right now [is] not at a point where it can sustain its current level. And I don't think that's because people in Italy have suddenly become aware of the need to conserve resources. I think it has more to do with decisions that are made by families on the margin not to have as many children."

Consequences of overpopulation
Overpopulation occurs when a population's density exceeds the capacity of the environment to supply the health requirements of an individual, according to the Environmental Protection Agency.

Environmentalists have long been concerned about the resources threatened by rapidly growing human populations, focusing on phenomenon such as deforestation, desertification, air pollution and global warming. But the worst-case scenario for people experiencing overpopulation, according to Lawrence Smith, president of the Population Institute, is a lack of fresh, clean water.

"If the water goes, the species goes," he said.

"That sounds kind of alarmist," Smith conceded, "considering there's water all around us, but 97 percent plus is saltwater, and the freshwater that we use to sustain ourselves is just native to 3 percent. ... So the accessibility of water, the competition for water, the availability of water is going to be a major, major threat," he said, noting world population growth estimates at more than 9 billion people by 2050.

Nine billion is an exceptional amount of people, considering the world's population only reached 1 billion in 1830, according to the Population Institute, a nonprofit organization that works to fund population and family planning programs around the world.

By 1999, world population reached 6 billion, and in the relatively short time between 2007 and 2050, there could be roughly 2.4 billion more people on Earth needing clean water, space and other natural resources from their environment in order to survive.

Governments facing overpopulation will also struggle to manage waste, said Allen. "Handling your waste and the public health consequences of not handling it well is the biggest problem that will be faced in rapidly growing urban areas in the developing world." When London, England, faced a population boom in the 1850s, for example, its infrastructure was not prepared for the excess waste, which resulted in Cholera outbreaks.

"Huge outbreaks," said Allen. "Fifty-thousand people dying over the summer. That's the kind of thing that in the developed world we no longer have problems with, but in the developing world are very, very real."

Smith said that 97 percent of world population growth between now and 2050 will occur in the developing world, where governments face serious economic and social challenges.

"I would say most of this is in sub-Saharan Africa, where by every other health indicator, they rank at the bottom," Smith said. "This growth rate is taking place despite the high levels of HIV and AIDS and [tuberculosis] and malaria."

Health care -- and the lack of it -- is also a factor in the rising populations in developing countries, according to Stan Bernstein, United Nations Population Fund senior policy adviser.

"We've seen a global trend of people wanting smaller families, but in the poorer settings that's not quite the case yet," Bernstein said. "And it's certainly not the case within countries that the poor [do not] have access to the kinds of services that the wealthy avail themselves of."

Globally, Bernstein said the poorest fifth of people in countries with rapid population growth have twice as many children, on average, as the wealthy people in those same countries.

Birthrates make a difference
The massive growth in developing nations is due in large part to fertility rates, where women during their reproductive years will have an average of five children, said Smith. "That's considerably higher than it is in the developed world."

In addition to the growing demands of developing nations, emerging countries like China and India are rapidly industrializing, said Smith. "Their demands for food alone will have considerable impact on global markets."

China's government has instituted population control methods in order to curb growth. Their controversial "one child" policies have garnered an uneasy reception, especially in rural populations, where people complain of stiff fines or forced sterilizations and abortions as a result of breaking population laws.

Traditionally, rural populations are larger than urban populations, said Smith. This is because rural families need to be larger in order to work and live off the land, and urban populations -- with better education, health care and family planning opportunities -- offer parents the luxury of choosing how many children they will have, he said.

This year is the first year that rural and urban populations are nearly equal, according to the United Nations Population Fund's annual report. This creates a mixed bag of concerns, according to Smith, that include susceptibility of young urban populations in poor countries with weak governments to recruitment for terrorism and conditions of instability.

"We have never in the history of the world experienced urban growth rates or metropolitan growth rates at the same level that we are experiencing now," said Allen.

Jul 6, 2013#5

strawman

Tress said:
Overpopulation could be people, planet problem

Funnily enough, that replacement rate of 5 in India has halved over the last 6 years to 2.59, and if they continue the trend they too will be below the 2.1 replacement rate required to maintain a population number within a few years.

Jul 6, 2013#6

Tress

stienman said:
Funnily enough, that replacement rate of 5 in India has halved over the last 6 years to 2.59, and if they continue the trend they too will be below the 2.1 replacement rate required to maintain a population number within a few years.

The article I posted was a few years old. I posted it more for two parts in particular: the discussion on the negative consequences of overpopulation, and the discussion on how declining birthrates are a natural byproduct of the developing world.

The problem is not that Americans aren't having enough babies. The problem is that we have many social systems built on the premise that the population always increases. That needs to change, as opposed to creating an incentive for larger families.

Jul 6, 2013#7

AshburnerX

The fundamental problem here is that everything in our society disincentives having children during the periods when we are most fertile. First an foremost is the education problem: you basically need short of a decade and a half of education (in one form or another) just to get the most basic of sustainable living. If you don't feel like living in a desperate or lesser situation then you need ANOTHER 4 years minimum to get to a moderate level of living. That's assuming you have the finances and ability to get it done.

This is incredibly hard to do if you have kids. Not impossible mind you, but difficult enough that I doubt anyone would recommend doing it. But if you wait much past your 20's, it suddenly because much harder to conceive.

Jul 6, 2013#8

ThatNickGuy

In the longer run, wouldn't it be a positive thing, though? If the elderly outnumber the young, they'll start dying off and then we have a lessened population, do we not? I don't know all the economic ramifications would be once they do outnumber, though, and whether we'd be able to push through that until they start dying off.[DOUBLEPOST=1373144045][/DOUBLEPOST]

AshburnerX said:
The fundamental problem here is that everything in our society disincentives having children during the periods when we are most fertile. First an foremost is the education problem: you basically need short of a decade and a half of education (in one form or another) just to get the most basic of sustainable living. If you don't feel like living in a desperate or lesser situation then you need ANOTHER 4 years minimum to get to a moderate level of living. That's assuming you have the finances and ability to get it done.

This is incredibly hard to do if you have kids. Not impossible mind you, but difficult enough that I doubt anyone would recommend doing it. But if you wait much past your 20's, it suddenly because much harder to conceive.

And these days, even having a bachelor's degree isn't much help, either. I've been hearing lately there's more push for people to get into trades.

Jul 6, 2013#9

Tress

ThatNickGuy said:
In the longer run, wouldn't it be a positive thing, though? If the elderly outnumber the young, they'll start dying off and then we have a lessened population, do we not? I don't know all the economic ramifications would be once they do outnumber, though, and whether we'd be able to push through that until they start dying off.

In my opinion, the WSJ has always concerned itself with short-term gains and largely ignored long-term consequences. The whole paper is set up that way. The same thing goes for most of our government.

Jul 6, 2013#10

AshburnerX

ThatNickGuy said:
And these days, even having a bachelor's degree isn't much help, either. I've been hearing lately there's more push for people to get into trades.

This is never going to happen as long we treat mechanics, plumbers, carpenters, and electricians like they are hired help and not the professionals they are. One of the biggest reasons for the push to degrees in the first place is that having one suddenly made you "respectable" in society. Why would anyone aspire to these careers if your going to make less money and have less respect than someone with a BA?

Honestly, I think we just need to revamp the education system and start fast tracking kids based on ability as soon as we can. Yes, this does create the problem of a potential underclass who have trouble finding work beyond a few fields, but right now our K-12 education is so generalized that it's completely useless. We ether have to make college/trade school free (so that everyone can specialize) or start specialized education in HS (so that everyone can leave with a useful, in-demand skill). What we have now just is doing it.

Jul 6, 2013#11

strawman

ThatNickGuy said:
In the longer run, wouldn't it be a positive thing, though?

Population contraction is seen by most economists as a bad thing:

Or, as Mark Steyn notes in America Alone, "There is no precedent in human history for economic growth on declining human capital."

It is impossible to predict with certainty the side effects of population decline. But there is good reason to believe it will be bad for us. Innovation will suffer as the demand for nearly everything (save health care) slackens. The welfare state is unsustainable in a contracting, top-heavy population. And instead of producing windfalls of excess supply, economies will probably contract. As Livi-Bacci observes, "Historically, areas depopulated or in the process of losing population have almost always been characterized by backward economies."

http://www.cbsnews.com/8301-215_162-2272616.html

Also see the opinions from others: https://www.google.com/search?q=is population decrease bad

And, generally speaking, in a capitalist society, what's bad for the economy is bad for its citizens.

Jul 6, 2013#12

Frank

Kind of funny, where I live, most trades dominate in wages compared to just basic BA jobs.

This'a'here's oil country though.

Jul 6, 2013#13

AshburnerX

Frank said:
Kind of funny, where I live, most trades dominate in wages compared to just basic BA jobs.

This'a'here's oil country though.

That has more to do with life expectancy problems and career longevity. I guarantee you there are more old doctors than old oil workers and the doctor is probably still working.

Jul 6, 2013#14

Frank

A doctor is hardly a basic BA job.

I think you have a pretty skewed impression of what most oilfield jobs involve. Most guys I know who do oilfield work call it pretty sedentary for the most part. Lots of sitting around waiting. The only shitty part of it is being away from home for 2-3 weeks at a time.

Then they come home for a week or two and buy brand new dualie trucks because, f'ckin' Albertan!

Jul 6, 2013#15

Cheesy1

My dad worked the fields in the Arctic Circle of Alaska. Two weeks on, two weeks off. Better pay than almost anything found around here in California.

Jul 6, 2013#16

ThatNickGuy

stienman said:
Population contraction is seen by most economists as a bad thing:

http://www.cbsnews.com/8301-215_162-2272616.html

Also see the opinions from others: https://www.google.com/search?q=is population decrease bad

And, generally speaking, in a capitalist society, what's bad for the economy is bad for its citizens.

I'm also pretty anti-capitalist, so to paraphrase Charlie, "Fuck the man!"

Jul 6, 2013#17

Ravenpoe

I am for anything that reduces the amount of traffic on the freeway.

Jul 6, 2013#18

Bowielee

I've been saying for years that the baby boomers need to die off already and free up the job market.

That being said, my parents and aunts and uncles are baby boomers, so I don't want that either.

Jul 6, 2013#19

ThatNickGuy

Ravenpoe said:
I am for anything that reduces the amount of traffic on the freeway.

I'm WAY ahead of you.

Jul 6, 2013#20

DarkAudit

Shegokigo is gonna want that back when you're done with it.

Jul 6, 2013#21

GasBandit

The answer is simple. We need a "sunset squad" that disappears everyone over 64.

Oh, and a ban on all contraception and abortion, and a complete revocation of all rights and roles of women to be anything other than housewife-broodmares

We're talking a mandatory 2 children quota by 25. Chop chop.

Jul 7, 2013#22

DarkAudit

GasBandit said:
The answer is simple. We need a "sunset squad" that disappears everyone over 64.

Oh, and a ban on all contraception and abortion, and a complete revocation of all rights and roles of women to be anything other than housewife-broodmares

We're talking a mandatory 2 children quota by 25. Chop chop.

Now that you've removed all that disposable income, how do you plan on fixing the economy? Those Harleys aren't gonna sell themselves.

Jul 7, 2013#23

PatrThom

Why wait until 64? Why not 30?

In all seriousness, a large number of our economic woes can be traced to having too many people. I often wonder if this is in part responsible for the increased popularity of shows like "Dexter," as when we get cramped closer and closer together, our collective fantasies may turn more and more towards killing one another, or worldwide disaster films, or zombie apocalypse, or any other fantastic scenario where large portions of the population are unceremoniously removed.

--Patrick

Jul 7, 2013#24

Bowielee

Life day! RENEW! RENEW!

Jul 7, 2013#25

Hailey Knight

Capitalist economy is based on constant growth these days. Over a century ago, it used to ebb and flow, with constant recessions and booms, but we try not to do that anymore. This same constant growth needs an influx of new blood.

However, the world's resources aren't going to expand with our population size. The planet is going to stay the same size. At some point, the population is going to have to step back or be forced to step back. I don't think we're facing a real problem when there are immigrants coming here and having 12 to 20 babies per couple. I've seen in my cases guys who come in who have over 40 siblings (not all the same two parents of course).

There's going to be an upset. Maybe not all those old folks get cared for as much as they should. Maybe there will be more people like me who don't want to live long enough to become feeble in body and mind. But eventually people the population will settle out. It's not going to save the day for people to just start having more babies when resources and the economy are facing so many other problems. We can't evade every disaster by fucking each other.

Jul 7, 2013#26

tegid

stienman said:
Population contraction is seen by most economists as a bad thing:

http://www.cbsnews.com/8301-215_162-2272616.html

Also see the opinions from others: https://www.google.com/search?q=is population decrease bad

And, generally speaking, in a capitalist society, what's bad for the economy is bad for its citizens.

But does that mean that we need to fix the problem of keeping population growth or that we need to fix the economy/system? Rethink capitalism, think of an alternative, whatevs? It seems hard, yes, but maintaining an exponential population growth seems unwise.

Jul 7, 2013#27

Charlie Don't Surf

Eat the (old and) rich

Jul 7, 2013#28

bhamv3

We need a massive world war to kill off most of the world population.

Someone convince China to invade Alaska for oil. I'll get started on digging vaults.

Jul 7, 2013#29

PatrThom

PatrThom said:
In all seriousness, a large number of our economic woes can be traced to having too many people.

I feel I need to clarify this a bit. A recent (emotional) reddit post explored a related issue, that of wealth gravitating towards the wealthy. Regardless of the validity of the remainder of the post, there is the following:

It is fundamentally impossible for one laborer to move up in the economic food chain without further enriching a very wealthy individual already ahead of him.

Essentially, unless you are at the very tippy-top of the labor pyramid, your efforts serve to enrich someone else more than they enrich you, which means your relative position does not change. And because our population is so large, and so many people are working (overall quantity, not percentage), those people at the top of their respective pyramids are getting richer faster than ever before. With consolidations and mergers (Hello, banking industry!), multiple pyramids combine together, which results in more wealth being driven uphill even faster. If the economy consisted of millions of smaller pyramids that were at most only a handful of layers deep, it would behave more like champagne, with streams of bubbles rising to the surface and (upon the death of a pyramid tip, natural disaster, or sudden exodus of workers) "popping" and releasing those resources back into the pool. With today's mega-mega-businesses, the heirarchies are so wide and so deep that they can easily absorb the removal of senior officers or large chunks of the workforce without seriously disrupting their structure. This means the engines which move wealth upwards continue their function, implacably extracting value from the lowest levels and sending it up the chain.

Now raising children (as I'm sure stienman can attest) ain't cheap, and the cost of living doesn't automatically adjust itself depending on your income. There's a certain minimum amount of money you need to support yourself, and if you add a spouse and kid (or even just a kid!) into that mix, that amount goes up, and if you don't earn enough to beat that spread, then you either forego kids just to survive, or you risk ending up on the news somehow. As wealth is drained from those lower levels and passed up the chain, you can figuratively draw a line across that heirarchy: People above the line can afford kids, people below the line can't, and unless wages keep exact pace with inflation, that demarcation will keep moving up the org chart. This means that, inexorably, the number of people who can't afford to have kids gets larger and larger. Good news! The longer it goes on, the slower this number increases (because the pyramids narrow as you move upwards)...but it turns out this is actually Bad News, because when your line is still near the bottom, moving up even one tier causes the biggest percentage jumps to happen first. Oh, and guess what...turns out that if you arrange the entire population according to income? You get the same pyramid shape and dynamic.

So it seems obvious, really. As the rich get richer (and they have been doing so for a while now), of course we are going to be birthing fewer and fewer children. Unless the people who own 40% of the nation's wealth start pumping out 40% of the nations babies*, it's just not possible. Because math.

tl;dr: "Too big to fail" really means "too big to allow others to succeed."

--Patrick
*2012 population=313million, 2012 births=about 4million, so that wealthiest 1%=3.1million people who would have to have 40%x4million=1.6million children annually, which only works out if all 3.1 million of them pair up with one another and each couple has a new baby every year. And this doesn't account for the fact that a large portion of this 3.1million is probably too old to have children, so the remainder will have to get extra busy to make up the difference. Also, if the top 1% has a new baby (or two) every year, I will guarantee they won't stay in the top 1% wealthiest for more than a decade or so.

Jul 8, 2013#30

Bowielee

PatrThom said:
Intersting stuff.

This is why the fiscal conservative stance kind of floors me and why I think that it ignores the realities of today's market forces.

The ideal that they try to push is that anyone with enough talent and motivation can start up their own business and push to the top. This simply isn't the case. The market as it stands right now is ruled largely by the banks and the largest stock holders. The traditional forces of supply and demand simply don't work the way they would in ideal traditional or even Keynesian economics. The supply side holds an abundance of power. Power of fixing cost. Power of fixing labor. Political power. It really is a losing sum game for someone who is from a lower income.

Can people move up? yes. But they are quite often the exception to the rule and even then, to do so, the only way they can do it in the current system is by feeding larger interests.

Jul 8, 2013#31

PatrThom

Bowielee said:
Can people move up? yes. But they are quite often the exception to the rule and even then, to do so, the only way they can do it in the current system is by feeding larger interests.

"Venture Capitalists."

--Patrick

Jul 12, 2013#32

sixpackshaker

bhamv3 said:
We need a massive world war to kill off most of the world population.

Someone convince China to invade Alaska for oil. I'll get started on digging vaults.

Get China and India to duke it out for 50 years, and the winner gets Africa as a bonus.

Jul 12, 2013#33

strawman

sixpackshaker said:
China and India

That's not fair! China has 3 times the land area and twice the number of nuclear warheads. It wouldn't even be a contest without pulling other interests into play.

It is ridiculously hilarious that India's first nuclear test was codenamed "Smiling Buddha".

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