Possible effects of a declining birth rate

[Ramen]

Interesting NYT podcast yesterday. The latest census shows the lowest U.S. birth rate in almost a century. This could have big implications for young and future retirees -- health insurance, elder care, Social Security, Medicare, Medicaid. The discussion does not get into savings and portfolio performance, or retirement specifically, but it does mention the possible effects on economic growth.

A Population Slowdown in the U.S.
How the declining birth rate could profoundly shape the nation's future.

Today's episode is about how a population slowdown is affecting Japan. I'm about to listen to that one.

 

[audreyh1]

So much for COVID babies. It looks like couples have resoundingly decided NOT to have another baby during a national health emergency.

 

[Vincenzo Corleone]

Interesting NYT podcast yesterday. The latest census shows the lowest U.S. birth rate in almost a century. This could have big implications for young and future retirees -- health insurance, elder care, Social Security, Medicare, Medicaid. The discussion does not get into savings and portfolio performance, or retirement specifically, but it does mention the possible effects on economic growth.

A Population Slowdown in the U.S.
How the declining birth rate could profoundly shape the nation's future.

Today's episode is about how a population slowdown is affecting Japan. I'm about to listen to that one.

That helps to explain the country's relentless push for ever higher amounts of immigration. What's interesting is this increasing push for higher amounts of immigration, in my opinion, is what's causing the problem described in the podcast:

"And the problem is we as Americans have gotten unused to thinking of ourselves as one group. It’s much less we and much more I. We’ve become tribal in a way that will really complicate collective decision-making on these really, really important issues."

It really seems to be a case of appetite growing by what it feeds on. The more immigration, the more tribal we become. A less cohesive society. And yet we need the growth in population.

 

[euro]

That helps to explain the country's relentless push for ever higher amounts of immigration. What's interesting is this increasing push for higher amounts of immigration, in my opinion, is what's causing the problem described in the podcast:

"And the problem is we as Americans have gotten unused to thinking of ourselves as one group. It’s much less we and much more I. We’ve become tribal in a way that will really complicate collective decision-making on these really, really important issues."

It really seems to be a case of appetite growing by what it feeds on. The more immigration, the more tribal we become. A less cohesive society. And yet we need the growth in population.

Then again, Japan, the poster child for an overaged population is an EXTREMELY cohesive society that keeps immigration very low.... yet... there they are

 

[Ramen]

Then again, Japan, the poster child for an overaged population is an EXTREMELY cohesive society that keeps immigration very low.... yet... there they are

Right, today's follow-up about Japan mentions this.

 

[Vincenzo Corleone]

Then again, Japan, the poster child for an overaged population is an EXTREMELY cohesive society that keeps immigration very low.... yet... there they are

Yes, you're right. It's a head-scratcher.

 

[Gumby]

.... And yet we need the growth in population.

Do we really? I'm not saying that I know the answer, just raising the question. I would think that we could motor along quite well with a static population as long as the age distribution curve remains relatively pyramidal. Technology can still improve the quality of life and it would certainly give the environment a break. I am agnostic as to whether that steady population is achieved by intrinsic natural growth, by immigration or, as is most likely, a combination of the two.

 

[OldShooter]

I'm not sure "cohesiive" is the right word. I would offer "homogeneous."

Japan values homogeneity to an extreme degree. That is why they are in such paralysis when the topic of immigration comes up.

Canada, which I believe from spending some time there, is comfortable with a sort of chocolate-chip-cookie model of society. Various nationalities and cultures separably embedded in the larger cookie. Quebec is an extreme chip maybe; the Chinese are probably a better example.

In the US we have had the "melting pot" paradigm where successive waves of Europeans arrived, were heavily discriminated against, then melted in and became almost undetectable after a generation or two. Later immigrants with distinctive religions, colors, and facial features, don't work so well with the melting pot scenario. The continuing decline in our country's birth rate, a decline that is skewed toward affluence, means we'd better be getting more comfortable with a Canadian-style paradigm.

 

[disneysteve]

And yet we need the growth in population.

Why?


An ever-growing population puts more and more strain on everything. More traffic. More energy usage. More pollution. More food consumption. More housing.



It wouldn't be a bad thing for the planet to have fewer people living on it.


Over the past 50 years, the world population has gone from 3.7 billion to 7.8 billion. How much more can the planet support? It would be nice to see that number start dropping back down.

 

[ExFlyBoy5]

Do we really? I'm not saying that I know the answer, just raising the question. I would think that we could motor along quite well with a static population as long as the age distribution curve remains relatively pyramidal...

I agree with your sentiment. Personally, I think there is way too much traffic as it is.

Why?

An ever-growing population puts more and more strain on everything. More traffic. More energy usage. More pollution. More food consumption. More housing.

It wouldn't be a bad thing for the planet to have fewer people living on it.

Over the past 50 years, the world population has gone from 3.7 billion to 7.8 billion. How much more can the planet support? It would be nice to see that number start dropping back down.

Nothing else to add except....agreed.

 

[Vincenzo Corleone]

I'm not sure "cohesiive" is the right word. I would offer "homogeneous."

Use whatever word you want. What seems to be apparent to me is that society has, indeed, become more tribal than when I was a kid. And I would argue that the effects of a tribalistic society are not conducive to an organic growth in population over the longer term. Until someone brings up Japan, of course.

 

[OldShooter]

--- It would be nice to see that number start dropping back down.

Without agreeing or disagreeing with you, I'd point out that the world demographic projections show flat or declining population. https://www.economist.com/graphic-de...t-97bn-in-2064

Re the US I haven't heard anyone arguing for significant population growth in the US, but we do need the economic contributions that only immigration can provide in a timely manner. That may not increase the population at all or it may increase slightly, but the need is easily visible from the demographic data.

 

[Brat]

Raising a child in the US is an expensive proposition. Most childcare is the mother's responsibility and most women work. No wonder the birth rate is low.

No US resident raises a child to work the fields or perform housekeeping in hotels, we will need to import that labor force. Even they don't want their children to follow in their footsteps. The other common immigrant occupation is personal care and we have an aging population that needs those services. Immigration of unskilled workers is a necessity.

 

[MichaelB]

There is a very clear correlation between economic development and population growth. Across the world, as the standard of living increases the rate of growth slows and then flattens.

If we were to look forward to a world where the standard of living was significantly higher for the poorest 1/2, it’s likely global population growth would have peaked and might even be in decline. It’s difficult to picture one without the other, and there’s no doubt a higher standard of living for all is a good thing.

The greatest fear of a declining population is its impact on capital markets. They rely on growth, which relies heavily on population growth. A steady or declining population will find it challenging to grow the economy.

 

[foxfirev5]

Agreed. And to me the 800# gorilla is the lack of people willing to go back to work. The number of help wanted signs are off the hook. We really need immigrants to provide the labor needed. Sorry but IMHO it's true. Same as it was 100 years ago.

 

[redshift]

+1

Why?


An ever-growing population puts more and more strain on everything. More traffic. More energy usage. More pollution. More food consumption. More housing.



It wouldn't be a bad thing for the planet to have fewer people living on it.


Over the past 50 years, the world population has gone from 3.7 billion to 7.8 billion. How much more can the planet support? It would be nice to see that number start dropping back down.

 

[Out of Steam]

Agreed. And to me the 800# gorilla is the lack of people willing to go back to work. The number of help wanted signs are off the hook. We really need immigrants to provide the labor needed. Sorry but IMHO it's true. Same as it was 100 years ago.

People are making the very reasonable choice that, once disease risk is added to low wages and lack of health insurance, it's not worth working for the wages offered. Costco has no problem filling jobs at starting at $16 an hour with benefits.

 

[Aerides]

seems there are two separate issues, which overlap but not completely.

One can argue BOTH that the planet would be better with a declining global population, while also arguing that the US financially is impacted by a declining birth rate here.

 

[razztazz]

People are making the very reasonable choice that, once disease risk is added to low wages and lack of health insurance, it's not worth working for the wages offered. Costco has no problem filling jobs at starting at $16 an hour with benefits.

Yes. It's not like everybody just woke up and got a brand new idea about not working. It's the marketplace. And it's never just one thing. The invisible hand has many fingers. Adam Smith meets Charlie Chan. An adaquate wage is different if you ask the person trying to make one or the person who's having to pay it.

 

[RAE]

Do we really? I'm not saying that I know the answer, just raising the question. I would think that we could motor along quite well with a static population as long as the age distribution curve remains relatively pyramidal. Technology can still improve the quality of life and it would certainly give the environment a break. I am agnostic as to whether that steady population is achieved by intrinsic natural growth, by immigration or, as is most likely, a combination of the two.

+1. There are negatives to increased population growth - environmental degradation, for one. I think we would do just fine with a relatively static population.

 

[RAE]

The greatest fear of a declining population is its impact on capital markets. They rely on growth, which relies heavily on population growth. A steady or declining population will find it challenging to grow the economy.

Yes - but a healthy economy ultimately depends upon a healthy environment. An ever-increasing human population will certainly lead to more environmental degradation, and at some point this has to negatively impact the economy. The planet can only support so many people on a reasonably sustainable basis (some would argue we have exceeded that number already).

 

[Dtail]

seems there are two separate issues, which overlap but not completely.

One can argue BOTH that the planet would be better with a declining global population, while also arguing that the US financially is impacted by a declining birth rate here.

Sounds about right.

 

[Ramen]

It really seems to be a case of appetite growing by what it feeds on.

The greatest fear of a declining population is its impact on capital markets. They rely on growth, which relies heavily on population growth. A steady or declining population will find it challenging to grow the economy.

This is the key point I took away from the podcast relating to retirement. While the discussion eventually gets into the environmental benefits of a smaller population (which I welcome), the red flags are about how we've been relying on an unsustainable economic model. Eventually this could cast FIRECalc estimates in a new light, for example, if someday we need to plan to cover expenses that the current model helps us manage.