Oh - I forgot to have children

No matter what else you say about Social Security, it is a type of pyramid scheme, an intergenerational chain letter. Unless we manage to stockpile a prodigious amount of canned food and live off our cache in some secluded valley, all our retirement plans depend on the kindness and responsibility of subsequent generations. The problem is that many of us have forgotten to have kids, or didn’t have enough of them.

Demographers estimate that the average American woman needs to produce 2.1 children in order for the population not to fall. These are averages. The number of childless women is increasing. If half the women produce no children, the remaining half will need to produce 4.2. How many families do you see (outside Utah or the Amish country) with 4-5 children? It looks like we are in for population decline.

The U.S. actually does well by developed world standards. The average American woman produces two children, below replacement level but not much. We also take in more immigrants than any other country, so our population will continue to grow. Europe and Japan are falling into the abyss, with 1.4 and 1.3 children per woman respectively. Populations can drop almost as fast as they can rise and nobody can go back and replace generations not born. After withstanding millennia of wars, famines, pestilence it is possible, even likely, that many European populations will essentially succumb to the pale rider of peace and material security.

The odd thing is that this demographic crash is worldwide. The developing world still has a long way to go and has a lot of demographic momentum, but even here fertility rates have dropped from about six children per woman in 1960 to only 2.9 today. Given higher death rates, even this is approaching replacement. China's famous one child policy had the effect of slamming on the demographic breaks and also produced another problem - boys. Many Chinese couples wanted to make their only child a boy, so they aborted, mistreated or murdered girls. In some areas there are 120 boys for every 100 girls. Men are important to population growth, but women are the true limiting factor. A sex ratio unbalanced in this direction means lower population growth in the future.

We all grew up in the population bomb world and this world is still with us. Demographic momentum will carry populations higher in some parts of the world for much of our lifetimes. But you can see the future in Europe and Japan and the future is gray. (The Russian population is already smaller than it was ten years ago. Others are following.) America has a temporary reprieve from the worst of the crash, but our trend is the same.

All this tells us that pension reform is not something we can forget about or postpone. We have a responsibility to ourselves and future generations to reform when we can, not when we are forced to. Beyond that, it is in our interests to make it easier and more desirable to have kids. We need to vote for the bond issues to build schools, increase the child tax credits and fund youth programs. Investing in the next generation is one of the wise investments government can make. On the personal side, we should just be nicer to people with kids. Don't ostracize them in restaurants or airplanes. Remember, those who don't support the next generation will have to rely on the Lugar retirement plan. On your 65th birthday you take the Lugar, put it in your mouth and pull the trigger. We all depend on the next generation. Let's support them.

Posted by Jack at January 11, 2005 2:17 PM