Demography and Destiny
Monday, October 29, 2012
Demography is destiny, and if current trends offer a glimpse of the future, America needs to confront its troubling population picture.
Earlier this month,
USA Todayfeatured a piece on the causes of declining births in the United States (http://www.usatoday.com/story/news/nation/2012/10/03/birth-rates-record-lows/1608543/). The article noted that since 2007, U.S. births peaked at 4.3 million, but this number has been in decline ever since. Many demographers have noted that economic recessions often trigger fewer people having babies. As the piece points out, experts expect fertility rates to rise within one or two years following the end of a recession, but this has not occurred since the last recession ended. This is even more alarming because the number of women of prime childbearing age has gone up.
But the story had an interesting omission: the lower birth rate also stems from a decrease in immigration to the United States.
Declining births are just part of the overall problem of America’s declining population growth. If Americans are not bringing more children into the world, there is only one other source for our nation’s population growth: immigrants, and the families these young newcomers start after they arrive here. As Mark Mather of the Population Reference Bureau has noted, the drop in net immigration to the U.S. has been accelerating over the last decade (http://www.prb.org/Articles/2012/us-population-growth-decline.aspx). In 2000, annual immigration stood at 1.4 million; between 2010 and 2011, that figure had been cut in half. Mather asserts, this decline in immigration was caused by “job losses in construction, manufacturing, and other occupations that are often filled by recent immigrants, as well as stricter enforcement of immigration laws.”
So why should everyday Americans be so concerned? There are two simple reasons: our aging population and declining innovation.
It is estimated that over the next two decades, nearly 75 million baby boomers will be retiring. This will result in lower tax revenues from their salaries as well as reduced spending to fuel our GDP. And needless to say, covering their healthcare costs will not be inexpensive.
Yet it is perhaps America’s declining innovation that should raise our eyebrows even more. As our manufacturing base continues to wither, the United States is becoming an increasingly innovation-driven economy. However, as the esteemed Danish economist Ester Boserup theorized nearly 50 years ago, a nation’s growing population and the pressure it places on its citizens for more new products and services encourages such innovation. If demographic trends continue and natural growth can no longer be relied upon to boost America’s population in the near future, our only hope to sustain such an innovation-dependent economy may be greater immigration (of both the highly educated and the low-skilled).
And our only hope for more immigration is sensible immigration reform.