U.S. birth rate – dwkcommentaries

“The Chinese Population Crisis”

This was the title of a recent column by the New York Times’ columnist, Ross Douthat.[1]

I was expecting to read about increases in that country’s massive population.

Instead, it was about a birth rate that was below replacement level, which Douthat said was “one of the most important geopolitical facts of the 21^st century.” Yes, it is true that the U.S. and many other developed countries are also experiencing declining birth rates,[2] but it was China and some other developing countries joining this “club” that was creating the crisis.

Although China has experienced amazing economic growth in recent years, “Chinese per capita G.D.P. is still about one-third or one-fourth the size of neighboring countries like South Korea and Japan. And yet its birthrate has converged with the rich world much more quickly and completely — which has two interrelated implications, both of them grim.”

“First, China will have to pay for the care of a vast elderly population without the resources available to richer societies facing the same challenge.”

“Second, China’s future growth prospects will dim with every year of below-replacement birth rates, because low fertility creates a self-reinforcing cycle — in which a less youthful society loses dynamism and growth, which reduces economic support for would-be parents, which reduces birthrates, which reduces growth.”

Moreover, as “ Lyman Stone writes in the latest National Review, the human race is increasingly facing a “global fertility crisis,” not just a European or American or Japanese baby bust. It’s a crisis that threatens ever-slower growth in the best case; in the worst-case, to cite a recent paper by the Stanford economist Charles Jones, it risks “an Empty Planet result: knowledge and living standards stagnate for a population that gradually vanishes.”

“As we contemplate the demographic challenge of the future, we should reserve particular opprobrium for those who chose, in the arrogance of their supposed humanitarianism, to use coercive and foul means to make the great problem of the 21st century worse.”

One commentator on this column said that Douthat missed an important fact exasperating China’s problem…–the enormous gender imbalance of . . .[its] ‘one child’ years. Boys were overwhelmingly favored, so there are many fewer women to birth those babies. One man can impregnate many women, but each woman can only birth at most one baby a year for a few decades (assuming she’s willing to be nothing but a baby machine, ehich is a huge stretch.”

A Hong Kong financial reporter suggests that China’s lower birth rates and aging population should increase the demand (and, therefore, higher prices and lower interest rates) for Chinese government bonds. As a result, buying such bonds now may lead to capital gains.[3]

Conclusion

We should thank Douthat for pointing out the important issues raised by China’s declining birth rate although the “Empty Planet” scenario seems absurd.

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[1] Douthat, The Chinese Population Crisis, N.Y. Times (Jan. 19, 2020).

[2] E.g., Implications of Reduced U.S. Population Growth, dwkcommentaries.com (Jan. 10, 2020).

[3] Bird, How to Invest in China’s Perilous Demography, W.S.J. (Jan. 20, 2020).

Additional Support for U.S. Needing More Immigrants

This blog previously has argued that the U.S. needs more immigrants, not fewer.[1] Additional support for that argument is found in recent news about U.S. population data, U.S. low unemployment rate and need for more workers and the examples of some U.S. communities welcoming immigrants.

U.S. Population Data[2]

There are two inter-related sets of U.S. population data that reflect the need for more immigrants: low U.S. native-born birth rate and foreign -born membership in the U.S. work force.

In 2018, the number of babies born in the U.S. was 3.79 million, the lowest in 32 years and the fourth year in a row that this number declined. Similarly the U.S. general fertility rate—the number of births per 1,000 women ages 15 to 44—fell to 59.0, the lowest since the start of federal collection of this data. These statistics reflect fewer babies born to teenagers and unmarried women, lower Hispanic fertility rates and the increase in women obtaining college degrees.

Moreover, the total fertility rate—the estimated number of babies a woman would have over her lifetime—has generally been below the “replacement” number of 2.1 since 1971. This could mean (without immigration) a declining overall population and workforce too small to support a growing number of retirees and older people. Such support, of course, includes paying for the Social Security and medical benefits for senior citizens.

This decline in the native-born population has been counter-balanced by increases in the foreign-born who are members of the U.S. labor force. In 2018, there were 27.2 million foreign-born workers, representing 17.5% of the total work force, which is the highest percentage since 1996 when these records were first kept. This segment includes those who now are U.S. citizens, immigrants and those here temporarily. Moreover, the data shows that the foreign-born workers are becoming better educated and more likely to be Asian.

“The top overall reason for people to come to the United States is for employment,” said Jeanne Batalova, senior policy analyst at the Migration Policy Institute, a nonpartisan think tank.

Shortages of Workers in U.S.[3]

In Minnesota, for example, “factory officials — especially those in rural areas — say severe worker shortages are increasingly impeding their growth and profits. A March survey indicated that nearly 50% of such officials said “their inability to find qualified workers had hurt growth. . . .a rise of 14 percentage points from 2017.“

It is not just Minnesota that is experiencing this situation. The director of a recent survey of the nine-state mid-America region says, “finding and hiring qualified workers remained the chief threat to manufacturing economy for the region. … Of surveyed factory managers, approximately 44.7% identified labor shortages as the greatest threat to company success in the next 12 months.”

A Wall Street Journal editorial makes the same points on a national level. It says that “there is little evidence” for the belief “that lower-skilled immigrants undercut American workers,” but on the contrary “U.S. workers, taxpayers and businesses would benefit from more immigrants of all skill levels.”

This editorial also attacks the concept of a merit-point immigration system, recently put forward by President Trump. It says that such a system “is vulnerable to political meddling and will discriminate against less-educated strivers who also boost the U.S. economy. Merit systems don’t measure entrepreneurship and would keep out many less-skilled workers who start small businesses like the neighborhood dry cleaner. The plan also doesn’t increase or streamline guest-worker visas, which are crucial to reduce the incentive for illegal immigration.” Moreover, “Low-skilled immigrants are contributing heavily to the nation’s entitlement programs and sustaining Rust Belt communities that otherwise would be losing population. More immigration will be vital to maintaining the “safety net” as the U.S. fertility rate last year fell to a 32-year low.”

U.S. Communities Welcoming Immigrants[4]

Tom Friedman, the New York Times columnist and a Minnesota native, recently visited the city of Willmar, population of 19,610 (2010 census) in the southwestern part of Minnesota. Historically it was a largely white, Lutheran, Scandinavian town.

Now the town’s diversity is seen at its high school, which has students from 30 countries in Latin America, the Middle East, Africa and Asia. The languages spoken there include English, Arabic, Somali, Spanish and Karen (the language of an ethnic group from Myanmar). Visiting the school, Friedman saw “a Benetton ad of races, creeds, colors and clothing.” To assist this mixture the school has “Spanish-speaking and Somali-speaking cultural liaisons [who] work with teachers, students and parents, so families can learn how to advocate for their kids, what the rules are and just how the local culture works.”

The school’s principal, Paul Schmitz, summed up its challenge and mission this way, “Sustainable democracy in the world depends on the United States being a beacon of democracy. And that depends on how well we manage democracy in a pluralistic society.” And that depends on healthy public schools, because “the only shared experience we have any longer in America is through public education.”

Businesses in Willmar have donated money to “create an entrepreneurship program for area schools, through which selected kids begin their day by visiting or working at local businesses. There they have to come up with a business plan for a start-up, get it approved by a local banker, raise or borrow seed money themselves and work on the project instead of attending school for first part of each morning. . . . [One of the] Somali students . . . had started a company that makes short videos!”

Other Willmar collaboration occurs between a local community and technical college (Ridgewater College) and the K-12 schools, the local chamber of commerce, economic development commission and a community foundation. An example of that collaboration is the “Community Integration Center, which some Somali social entrepreneurs opened in 2017 to teach Somalis English and Minnesota culture and to teach Willmarites Somali and Somali culture.”

In short, Friedman discovered a successful community in Willmar because it needed workers to fill jobs, it embraced the immigrants and it has a critical mass of community leaders (business people, educators, philanthropists and social entrepreneurs). As Dana Mortenson, CEO of World Savvy, a global education organization, said, Minnesota towns that are rising are those “that . . . need a trained work force with a good work ethic and . . . [that embraces] a redefined sense of community.”

More generally in Minnesota immigrants are slowing or halting or reversing population declines in 15 rural Minnesota counties. One such county [next to Willmar] is Stevens County, population of 9,726. Its county seat of Morris (5,286 population) has a large Latino contingent who were drawn here for employment by agribusinesses involved in dairy and beef cattle farming. A professor at the town’s University of Minnesota-Morris started evening English-language courses for the newcomers that now operates twice a week at five levels of proficiency. This program also raises money to buy English books for the students and hosts events for long-time residents to meet the newcomers. The local library has books and library cards in Spanish. The newcomers organized a soccer tournament in the town.[6]

Conclusion

The objective reasons for wanting more U.S. immigration are clear—we need more workers. We also need younger workers who will help pay for the increasing costs of an aging native population. Rural areas with aging and declining population for their survival need immigrants.

These changes will be immensely aided by communities that welcome change and increasing diversity and develop ways to facilitate the assimilation of new people from different parts of the world with different lagnuages, customs, skin colors and religions.

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[1]See, e.g.,these posts to dwkcommentaries: “America’s Farms Need More Immigrants,” (Mar. 22, 2019); Businesses Need More Immigrants (Mar. 24, 2019); Trump Erroneously Says U.S. Is “Full,” (April 9, 2019).

[2]DeBarros, & Adamy, U.S. Births Fall to Lowest Level Since 1980s, W.S.J. (May 15, 2019); Freeman, A Historic Shortage of Americans, W.S.J. (May 15, 2019).

[3] DePass, Minnesota Manufacturers say worker shortages hurting growth, StarTribune (May 15, 2019); Slaughter, Immigrants for the Heartland, W.S.J. (April 28, 2019); Editorial, Trump’s Immigration Progress, W.S.J. (May 17, 2019).

[4] Friedman, President Trump, Come to Willmar, N.Y. Times (May 14, 2019); Rao, In Minnesota counties losing population, immigrants slow the decline, StarTribune (May 12, 2019).

[5] Friedman’s account of visiting Willmar is reminiscent of his fond reminiscences of growing up in the successful integration of Jewish citizens with the existing Christian community of St. Louis Park, Minnesota and then the current intergraton in his home town of Latinos and Somalis into the exisitng white and African-Ameican population. (See Friedman, Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations, chs. 12, 13 (Farrar, Straus & Giroux 2016). See also, Reactions to Tom Friedman’s “Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations,” dwkcommentaries.com (Mar. 13, 2017).

Others Factors Favoring More U.S. Immigration

On May 17, the U.S. National Center for Health Statistics reported “the fertility rate in the United States fell to a record low for a second straight year, federal officials reported Thursday, extending a deep decline that began in 2008 with the Great Recession.” This latest rate “fell to 60.2 births per 1,000 women of childbearing age, down 3 percent from 2016. . . . It was the largest single-year decline since 2010, when families were still feeling the effects of a weak economy.”[1]

If such rates “are too low, a country can face challenges replacing its work force and supporting its older adults, like in Russia and Japan. In the [U.S.], declines in rates have not led to drops in the population, in part because they have been largely offset by immigration.”

An apparent cause is women “postponing marriage, becoming more educated and . . .more likely to be the primary breadwinners for their households.” Yet, Donna Strobino, a demographer at the Bloomberg School of Public Health in Baltimore, says, “It’s hard to tell whether this is a dip that we periodically see in fertility or this is a long-term trend due to major social changes.”

“The most recent decline has been deepest for minorities. The fertility rate among Hispanic women dropped more than 27 percent between 2007 and 2016, the most recent year of data by race. The rate for whites has dropped about 4 percent, for blacks about 11 percent and for Asians about 5 percent.

The Wall Street Journal recognizes this problem. Its May 17 editorial states, “the immigration destructionists are detached from the reality of the American farm economy and a worker shortage that’s driving food production overseas.” Moreover, the U.S. “farm labor shortage is growing more serious as the overall U.S. jobless rate falls. The Labor Department says about half of the 1.2 million or so workers employed in agriculture are undocumented, and if they were deported the shortage would become a crisis.”[2]

A related Wall Street Journal article quotes “a study from former regional Fed economist Madeline Zavodny, now at the University of North Florida, suggesting that new talent doesn’t hurt our existing talent and may even help. She finds that ‘having more immigrants reduces the unemployment rate and raises the labor force participation rate of US natives within the same sex and education group.” These “results may be surprising, but they are consistent with research that finds immigration has little adverse effect on native-born workers’ wages and employment. The results do not deny, however, not all workers in America are doing well. The results simply point to the fact that immigrants are not to blame for deeper structural forces or circumstances that may have led to dim labor market prospects for some workers.”[3]

A similar report comes from Minnesota. “The strength of Minnesota’s manufacturing industry has obscured a potentially serious challenge ahead for the sector: finding enough workers.” A Minnesota industry group said a “looming worker shortages [is] a top concern for manufacturers, as baby boomer retirements shrink the labor pool at the same time the sector continues to grow.” Nearly one-half of survey respondents ‘identified hiring and retention as their number one challenge.” April data “provided more evidence that hiring has slowed sharply in the state this year amid an ultratight supply of workers. The [state] agency said the number of unemployed workers is at a 17-year low.” [4]

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[1] Nat’l Ctr for Health Statistics, Births: Provisional Data for 2017 (May 17, 2018); Tavernise, Fertility Rate Fell to a Record Low, for a Second Straight Year, N.Y. Times (May 17, 2018).

[2] Editorial, Exporting Jobs Instead of Foods, W.S.J. (May 17, 2018) See also U.S. Needs More Immigrants, dwkcommentaries.com (April 14, 2018).

[3] Freeman, Trump and America’s Immigrant Shortage, W.S.J.(May 17, 2018).

[4] DePass, Minnesota manufacturers’ profits soar, but a labor shortage looms, StarTribune (May 18, 2018); Ramstad, Minnesota’s employers, with fewer people to hire, are hiring fewer, StarTribune (May 18, 2018).