Where Have All the Children Gone?

 Demographics are Destiny

Mea culpa: You know, in all honesty I have been following this demographic time bomb for years, even while I was still working, but never believed it would happen. I was wrong. 

Update 4/14 - As luck would have it, in today's Star Tribune was an another article by the columnist mentioned below about demographics. In this one he points out that contrary to popular belief, Minnesota is actually gaining people over 65. It's losing younger people that is hurting us. Taxes, schmaxes! 

Unless you’ve been in a coma (or maybe retired) the last several years, you’ve seen or heard about the growing worker shortages. 

• “58%  of survey respondents found hiring to be “very” or “extremely” challenging.” RSM Consultants

• “Jerome Powell, the Federal Reserve chair, says the United States has a "structural labor shortage" that’s unlikely to be resolved anytime soon.” 

• “The US Chamber of Commerce claims there are over 10 million job openings in the US for which employers can’t find workers.”

Police and fire departments all over the country are short staffed. (Although for many different reasons e.g. Mpls cops are 18th in pay in MN. Number one? Sauk Center - go figure.)   

And also the miliary:

• (DoD Undersecretary) “Ashish Vazirani said that during fiscal year 2023, the military services collectively missed recruiting goals by about 41,000 recruits.” 

Thunderbirds Missing Man Formation

The Star Tribune’s very own Business section writer, Evan Ramstad, has had several columns about this growing  problem, especially in Minnesota. 

There are a lot of things involved in this first-ever (for the US) phenomenon.

First, there is undoubtedly the effect of retirements. With about 4500 baby boomers retiring per day (and going up every year) a lot of experience is leaving the workforce, creating a shortage of skilled workers.

Then there is the so-call skills mismatch.

• “While the loss of skills and experience through retirement is certainly a contributing factor, the leading cause of the skills shortage is the integration of advanced technology, AI and automation in the workplace.” Minneapolis Star Tribune Feb 20, 2024

     (Just another way to say that companies no longer need bodies,           they need well educated bodies.)

There is also this take:

• “Here’s the truth: There is no labor shortage. There is, however, a shortage of jobs paying sufficient wages to attract workers to fill job openings. For most Americans, real (inflation-adjusted) wage continue to drop. Wages have been increasing less than prices.” Robet Reich, American economist.

       (You know, how supply and demand are supposed to work in America?)

Which of these and how much each matters is open to debate but in any case there are a lot of jobs that aren’t being filled. Yet ironically the workforce is still growing (with great thanks to immigrants who make up 20% of it.)

But for how long?

The US, like most of the world, has had strong population growth for the last couple hundred years and very robust growth for the last 80 years. We went from 140 million in 1945 to 340 million today, average growth around 3%/yr. First Baby Boomers, then Gen Xers, followed by Millennials, then Gen Z, this population growth supercharged our economy's growth too. The growth rate now is about .5%/yr. (Yeah, point 5!) Can you imagine what it would've been - and will be - without immigrants?!

Apparently to all the Einsteins that study this stuff - demographers - the single most important statistic is the fertility rate. (This number is not to be confused with your neighbor who has 10 kids.) Here’s what they are looking for:

“Assuming no net migration and unchanged mortality, a total fertility rate of 2.1 children per woman ensures a broadly stable population.”

So how are we doing, fertility rate-wise? Right now the good old USA is coming in at a 1.66  – we’re number 134!, we’re number 134! - in fertility. Not terrible, Germany is 1.54. Much better than Japan, 1.33 and way ahead of the lowest, S. Korea at .89 – yowser!  Who’s number one? Niger at 6.6 – double yowser! (How are we doing in MN? 1.75)

Demographics, like DNA, doesn’t lie; the US, like the rest of the developed world, is facing a declining birth rate and population. That said, I’m not sure we all really appreciate what this means. (Well, except that there will be a lot more kids in Africa.)

We in Minnesota, and many other slow growing states (think cold weather), are already feeling the bite and currently can’t fill many types of jobs. We’ll have a lot more to worry about when we encounter a shrinking economy with fewer police, firemen, military members, doctors, nurses, teachers and others. We won’t be alone; this issue is going to affect the whole country over the next several decades.

Simply stated, every woman needs to have 2.1 kids - let's call it 3 - just for us to stand still on population. (This used to be pretty easy, my mom did more than her share with 5 kids.)

Sorry, as usual it's up to women to fix our problems.

There was a time in America when we couldn’t wait to have kids because we knew that their lives would be better than ours. Now, not so much.

What to do about it? Well, besides welcoming more immigrants, I suppose we could try to bribe the ladies of America to have more kids like some countries are doing. But that seems a little transactional – and apparently isn’t working anyway.

Actually, none of this is astrophysics. Here’s a thought: 

How about just trying to make this country a place where parents might WANT to have more kids - or any kids. You know, like good schools (and ones where you don’t have to worry about them being shot.) Good health care that doesn’t bankrupt you; enough housing so you don’t need to be rich to have a roof over your head and an economy that produces jobs that pay enough so that it’s worth going to work  - and supporting a family. Oh yeah, and fix immigration. 

Wouldn't that be tax dollars surprisingly well spent? (I shall now hold my breath.)

On a positive note, no need to plan for a shortage of politicians.

The Times They are A'Changin'     Bob Dylan

Wish You Were Here    Pink Floyd