Tags: Birth | Dearth | Labor | Forces

'Birth Dearth' Is Depressing Labor Forces Around World

'Birth Dearth' Is Depressing Labor Forces Around World
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Dr. Edward Yardeni By Monday, 26 June 2017 01:55 PM EDT Current | Bio | Archive

The Voluntary Human Extinction Movement (VHEMT) was founded in 1991 by Les U. Knight, a high-school substitute teacher who lives in Portland, Oregon. He and his followers believe that human extinction is the best solution to the problems facing the Earth’s biosphere and humanity.

The VHEMT website shows that the group’s motto is “May we live long and die out.” Their Facebook page sells tee-shirts declaring: “When You Breed, the Planet Bleeds.” Another declares: “Thank You for Not Breeding.” Sure enough, the pace of human breeding has slowed, but for reasons that have nothing to do with VHEMT.

All around the world, humans are not having enough babies to replace themselves. There are a few significant exceptions, such as India and the continent of Africa.

Working-age populations are projected to decline along with populations in coming years in most of Asia (excluding India), Europe, and Latin America. The US has a brighter future, though the pace of population growth is projected to slow significantly in coming years.

There are many explanations for the decline in fertility rates around the world to below the replacement rate, which is estimated to be 2.1 children born per woman in developed countries. It is higher in some developing countries that have higher mortality rates.

Melissa and I believe that the most logical explanation is urbanization. The United Nations estimates that the percentage of the world population that has been urbanized rose from 29.6% in 1950 to just over 50.0% during 2008 (Fig. 1). This percentage is projected to rise to 66.4% by 2050. The world fertility rate was around 5.0 births per woman in the mid-1950s (Fig. 2). It fell to 2.5 in 2015. The UN projects it will fall to 2.0 by the end of this century.

In our opinion, families are likely to have more children in rural communities than urban ones. Housing is cheaper in the former than in the latter. In addition, rural populations are much more dependent on agricultural employment. They are likely to view every child as contributing to a family’s economic well-being once he or she is old enough to work in the field or tend the livestock. Adult children also are expected to support and to care for their extended families by housing and feeding their aging parents in their own huts and yurts.

In urban environments, children tend to be expensive to house, feed, and educate. When they become urban-dwelling adults, they are less likely to welcome an extended-family living arrangement, with their aging parents living with them in a cramped city apartment. A UN report titled “World Urbanization Prospects: The 2014 Revision,” noted, “The process of urbanization historically has been associated with other important economic and social transformations, which have brought greater geographic mobility, lower fertility, longer life expectancy and population ageing.”

In our opinion, the urbanization trend since the end of World War II was attributable in large part to the “Green Revolution,” the term coined by William Gaud, the former director of the US Agency for International Development, a.k.a. USAID, to give a name to the spread of new agricultural technologies: “These and other developments in the field of agriculture contain the makings of a new revolution. It is not a violent Red Revolution like that of the Soviets, nor is it a White Revolution like that of the Shah of Iran. I call it the Green Revolution.”

In 1970, Norman Borlaug—often called “the Father of the Green Revolution”—won the Nobel Peace Prize. A January 1997 article about him written by Gregg Easterbrook in The Atlantic was titled “Forgotten Benefactor of Humanity.” Easterbrook wrote that the agronomist’s techniques for high-yield agriculture were “responsible for the fact that throughout the postwar era, except in sub-Saharan Africa, global food production has expanded faster than the human population, averting the mass starvations that were widely predicted.” Borlaug may have prevented a billion deaths as a result.

The resulting productivity boom in agriculture eliminated lots of jobs and forced small farmers to sell their plots to large agricultural enterprises that could use the latest technologies to feed many more people in the cities with fewer workers in the fields. Ironically, then, the Green Revolution provided enough food to feed a population explosion. Instead of working the land on family farms, much of the population moved to the cities and had fewer kids! Good old Tommy Malthus, the dismal scientist of economics and demographics, never anticipated ag tech and urbanization.

Now consider the following related developments:

(1) China. The fertility rate in China has plunged from 6.0 in the mid-1950s to below 2.0 during 1996 (Fig. 3). It remains below that level and is projected to do so through the end of the century. Initially, the drop had less to do with urbanization than with the government’s response to the country’s population explosion, which was to introduce the one-child policy in 1979. That did slow the 10-year growth rate in China’s population from a peak of near 3.0% at an annual rate during 1968 to 0.5% in 2016. However, it also led to a shortage of young adult workers and a rapidly aging population. So the government reversed course, with a two-child policy effective January 1, 2016.

Meanwhile, urbanization has proceeded apace, with the percentage of the urban population rising from 10.0% in 1950 to 50.0% during 2010 and reaching 57.3% in 2016 (Fig. 4). The urban population increased by 21.8 million that year, which is truly extraordinary, as this category has been increasing consistently by around 20 million per year since 1996 (Fig. 5). To urbanize that many people requires the equivalent of building one Houston, Texas per month! I first made that point in a 2004 study.

In our opinion, the move to a two-child policy is coming too late. China’s primary working-age population (15-64 years old) peaked at a record high of 1.02 billion during 2014 and is projected to fall to 815 million by 2050 (Fig. 6). By 2050, the primary working-age population in China will represent 59.7% of the total population, below the peak of 73.8% during 2010 (Fig. 7). Over the same time span, the elderly dependency ratio, which we define as the primary working-age population divided by the number of seniors (65+), will fall from 8.8 workers/senior to 2.3 by 2050; even more eye-popping is the drop from its peak of 16.2 during 1965 (Fig. 8).

In any event, the fertility rate is unlikely to rise in response to the government’s new policy. Young married couples living in cities are hard-pressed to afford having just one child. An 10/30/15 article in the Washington Post titled “Why many families in China won’t want more than one kid even if they can have them,” observed:

“[F]or many couples, it has become very costly to have kids in China. To prepare a child to succeed in the country’s competitive schools and workplaces, parents must invest lots of time and money in a child—for schooling, extracurricular activities, and outside tutoring, often for college-entrance and English proficiency exams.” Another problem is that most “Chinese of child-bearing age are single kids, and they may forgo having another kid in order to better support their aging parents.” As is written in the Bible, “As you sow, so shall you reap.”

(2) US. The fertility rate in the US was over 3.0 during the second half of the 1950s (Fig. 9). It fell just below 2.0 during 2013, and been hovering around that level since then. The percent of Americans living in rural areas fell from 30.0% during 1960 to 18.4% during 2015 (Fig. 10). The UN projects that the primary working-age population will continue to grow through 2050, though the growth rate will be very low (Fig. 11 and Fig. 12).

(3) Europe. The fertility rate in Europe fell from 2.7 during the late 1950s to below 2.0 during 1980, and has remained below that level ever since; it’s projected to remain below the replacement rate through the end of the century (Fig. 13). Europe’s primary working-age population peaked at a record 503 million during 2010 and is expected to decline to 361 million by the end of the century (Fig. 14).

(4) Africa & India. During 2015, among the highest fertility rates were in India (2.5) and Africa (4.7). They are projected to decline to 1.9 and 3.1 by 2050. India’s primary working-age population is projected to rise from 860 million during 2015 to peak at 1.12 billion during 2050 before heading lower over the remainder of the century. Africa’s primary working-age population stands out, as it is projected to rise from 663 million during 2015 to 1.57 billion during 2050 and 2.84 billion by the end of the century. India and Africa remain predominantly rural.

(5) Latin America. The fertility rate in Latin America was 2.2 during 2015 and is expected to fall to 1.8 by 2050. The region’s working-age population was 422 million during 2015 and is projected to peak during the early 2040s at 500 million before heading downwards to 390 million by the end of the century.

(6) Study guide. The UN also has a report titled “World Fertility Patterns 2015.” Nearly half the world lives in countries with below-replacement levels of fertility. According to the report: “Today, 46 per cent of the world’s population lives in countries with low levels of fertility, where women have fewer than 2.1 children on average. Low-fertility countries now include all of Europe and Northern America, as well as many countries in Asia and Latin America and the Caribbean. Another 46 per cent of the world’s population lives in ‘intermediate-fertility’ countries that have already experienced substantial fertility declines and where women have on average between 2.1 and 5 children.”

Melissa, Mali, and I are working on creating a bunch of global demography chart books for our website’s Global Demography section. So far, we have Global Population, Global Working-Age Population, and Global Elderly Dependency Ratios.

Dr. Ed Yardeni is the President of Yardeni Research, Inc., a provider of independent global investment strategy research.

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All around the world, humans are not having enough babies to replace themselves. There are a few significant exceptions, such as India and the continent of Africa.
Birth, Dearth, Labor, Forces
Monday, 26 June 2017 01:55 PM
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