The annual rate of global population growth has slowed from its peak of 2.2% in 1962. It is currently 1.13%. Because the base was 3.1 billion in 1962 and is 7.3 billion now, however, we will add 82 million in 2015 as opposed to only 64 million in 1962. All of the new arrivals, to steal a slogan from a year when global population was a quarter of its current size, will want a chicken in every pot and two cars in every garage. That’s a lot of cars and chickens. Every contemporary environmental problem, from habitat loss to resource depletion, is at bottom a population problem. There is no prospect of it easing. The projection made by the UN in 2011 for 9 billion people by 2050 already looks like an underestimate. We should exceed 8 billion in 2024. Birth rates are not declining as much as projected – outside the First World, that is.
One never would know this from recent news articles in First World publications such as The Wall Street Journal, The Washington Post, and The Economist. There the alarm is over just the opposite, for, while the earth as a whole continues to be fecund, in the highly developed countries there is a baby bust. The total fertility rate is the lifetime average number of children per woman based on the current annual number of births. In the US the rate is presently 1.8, half what it was in the 1950s and below the replacement level of 2.1; without immigration the population eventually would decline. Yet, the US is more fertile than the rest of the G8 and most other well-to-do areas. The rate in Russia is 1.61, Japan is 1.42, Lithuania 1.29, South Korea 1.25, and wealthy Singapore an astonishing 0.8. Several countries already are experiencing absolute population decline. To combat this, some governments have gone beyond tax breaks, which long have been in place in most countries, and are resorting to cash payments to boost birth rates. Singapore, for example, gives to parents $6000 for each of the first two children and $8000 for a third. These programs have not been successful at increasing the number of births, though they do seem to affect the timing; in other words, women don’t have more kids than they would anyway without the payments but they have them a year or so earlier. In Europe, countries that shift a larger proportion of the work, responsibility, and cost of raising kids away from parents and onto others (in effect, by taxing the childless) are apt to have slightly higher than average birth rates – e.g. Sweden at 1.8 – but only slightly and still below replacement level. It’s not even clear that there is a cause and effect to the correlation or, if so, in what direction; it might just be that where parents are more numerous anyway they can vote themselves more benefits.
Why the concern? So what if folks in flush countries choose to have fewer kids (or none at all) in favor of other lifestyle choices? What’s wrong with fewer people? The problem is that pension and other entitlement programs are paid out of current taxes despite any claims to the contrary. There may not be enough workers in the future to pay for all of them. Even where investment funds supposedly exist they almost always are smoke and mirrors. The Social Security fund in the US is typical. It is not real and never has been. Social Security tax receipts are invested in Treasury bonds; the Treasury then spends the money from the sale of those bonds as it always has. The bonds are just IOUs to the Social Security Administration: promises by the government to tax future taxpayers to pay them off. Future taxpayers might have other ideas, as they surely will if their tax burden per worker soars too high. Fewer kids mean fewer future taxpayers, the argument goes, and therefore insolvent entitlement programs.
The alarm seems misplaced to me. Keeping the discussion to purely economic matters, kids are not just future taxpayers, but current expenses. To take the single item of schooling, per pupil expenditures are triple in real terms what they were 40 or 50 years ago, so even with fewer kids we are spending far more. These costs properly should be subtracted from what we hope to tax away from present-day students down the road. Also, nearly every rich country is a magnet for immigration, which easily compensates for any shortfall in native births. Some countries are more overt than others about immigration policies that maximize tax revenues from new residents by favoring skilled workers. So, even without reining in entitlement demands, there just doesn’t seem to be a threat to the future workforce that cannot be countered readily and simply.
Besides, maybe we should consider the advantages of living in a less crowded land, even if it means a smaller future workforce and all that entails. Not every benefit is in the form of a pension check.
The Hollies - Too many people