Writing over at Populyst, Sami Karam looks at America’s birth declining birth rate. Like Jonathan Last, he sees this as a serious problem, rather than (as I would) an inevitable and-- managed properly--mainly positive transition. Nevertheless he makes this important point (my emphasis added):
I differ with Last on his recommendation that we need more children now. Children born now will not contribute to the economy for another twenty years and their numbers will only further exacerbate an already climbing dependency ratio. We cannot rewrite the past but what we need now are more adults in their 20s, 30s and 40s, in other words more children born in the 1970s, 80s and 90s. Yet, had we had these children back then, the economy would not have been as strong in the 1980s and 1990s because less capital would have been available for saving and investing. In many ways, we front-loaded demand, saving, investment and prosperity in those two decades and now face some inverse complications.
For my part, I’d argue that the front-loading was well worth it. The disastrous mistake the US (and, for that matter, Europe) made was to fill a (largely) non-existent labor gap by mass immigration.
All is not lost however. Instead of boosting the birth rate now, a four-point solution would include 1) raising the age of eligibility for Social Security and Medicare, 2) improving labor force participation, 3) continued innovation and 4) more exports. The first two would slow, delay or neutralize the rise in the dependency ratio. Innovation is the most important driver of the economy but innovation without a large demographic audience does not achieve its full wealth creating potential. An iPhone introduced to a market of 3 billion people clearly will create more wealth than an iPhone introduced to a market of 30 million people. Because US demographics are getting weaker and US demand will be less strong than in the past, an obvious solution is to look for new sources of demand outside our borders.
There’s a lot to that, but improving labor force participation is more likely to be evidence of a cure than a cause of it. Even Ross Douthat (a convinced natalist, as you may recall) seems to accept that there's a problem with the increase in the number of people who appear to have been exiled forever from the workforce:
…The decline of work isn’t actually some wild Marxist scenario. It’s a basic reality of 21st-century American life, one that predates the financial crash and promises to continue apace even as normal economic growth returns. This decline isn’t unemployment in the usual sense, where people look for work and can’t find it. It’s a kind of post-employment, in which people drop out of the work force and find ways to live, more or less permanently, without a steady job. So instead of spreading from the top down, leisure time — wanted or unwanted — is expanding from the bottom up. Long hours are increasingly the province of the rich...
Of course, nobody is hailing this trend as the sign of civilizational progress. Instead, the decline in blue-collar work is often portrayed in near-apocalyptic terms — on the left as the economy’s failure to supply good-paying jobs, and on the right as a depressing sign that government dependency is killing the American work ethic.
In fact, “near-apocalyptic” is a not entirely unreasonable way of looking at what this trend could mean (and it is not just an issue with blue-collar jobs, either), and the left (as Douthat describes them) are closer to identifying the source of the problem than those who would blame it on “government dependency”.
How to fix this mess is something of a mystery, but, under the circumstances, grumbling about a decline in the birthrate makes no sense at all.