The Truth About Population: And Away We Grow…

The Truth About Population: And Away We Grow…
By Debra Castellano

This week the Epoch Times—a freebie found in newsstands on Manhattan street corners—featured as its cover story, “Tomorrow’s Missing Workforce.” “Recession sent birth rates tumbling with no recovery in sight” and “Global economy squeezed as workforce numbers plummet” were the subheads. Curious about what they had to say about this alarmist idea in the face of the ever-rising global population, I grabbed a copy from the plastic bin.

Accompanied by what I assume is a staged photo of a preschooler sitting at a large table with one teacher and four empty chairs (today’s children should be so lucky), the article, taken from the Associated Press, looks superficially at the birth numbers in seven countries: the United States, Japan, Germany, France, the UK, Italy and Greece. The years 2008 and 2012 are compared, looking at how births have “tumbled” since the economy tanked. The AP posits that “for those who fear an over-crowded planet, this is good news—for the economy, not so good.” It continues, “Birth rates drop when unemployment rises…. The [lack of] growth in the pool of potential workers—ages 20-64—is signaling trouble ahead…. The labor pool is shrinking.” The hope for economic stability is, I suspect, why the UN bases its projections on the idea of all countries eventually converging to a birth rate of 2.1 births per woman; a birth rate of 2.1 theoretically equals two children for each couple, i.e., one child to “replace” each person. This balancing act would require the lowest-fertility countries (such as Italy, with its birth rate of 1.39 children per woman) actually rising back up to that replacement level.

However, the above countries have all been in the low-fertility category for decades, according to the United Nations population experts. So what happens if we compare them to, say, Kenya—a high-fertility country (and whose slums I’ve visited)? Or India, an intermediate-fertility country, with its population of a billion-plus—four times that of the U.S.? How are they doing with the demographic transition to population stability?

The countries featured in the article are currently in stage 2–3 of this transition. Since they are developed countries, infant mortality has already declined, followed by the decline in fertility and the start of population aging, meaning that their median ages are rising. In stage 3 of the transition, fertility levels off, but longevity continues to rise. This population aging is unavoidable to prevent further growth, and to eventually achieve a stable age distribution (stage 4). And along the way, the ratio of workers to dependents changes a few times.

Economically, the goal is a low “dependency ratio” (number of dependents per 100 people). The more the dependents (consumers) in a population outnumber the people of working age (producers), the tougher time a country has. Let’s look at the dependency ratio of the U.S., Kenya and India. We’ll also visit the Maldives, a tiny island archipelago between India and Kenya (with unbelievable scuba diving), and Iceland, which alphabetically butts up to India, but has some radical differences. (See chart.)

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The U.S. has literally doubled its population since 1950, but with total fertility (children per woman) sitting right around replacement rate (2.06), its population rise has been mostly due to immigration. Our total dependency ratio in 2005 and 2010 was 48.9 and 49 dependents out of 100 people, respectively—the lowest it’s been or is projected to be through 2100. Like the 2.1 birth rate, that’s about one to one. But as our population ages, that number is estimated to go up to 76.7 in 2100—way more dependents, with two-thirds of them being over age 65. Currently, however, our 20-to-64-year-old segment holds strong at 67.1%; fewer than 20% are under age 15, and 13% are 65+.

Kenya, a high-fertility Sub-Saharan country on the east coast of Africa, with its most recent total fertility of 4.8 children per woman, has an inordinately high ratio of children: 42.6% of their population is under 15 (consumers), with only 54.8% of working age (producers), and a tiny elderly population. Whereas our dependency ratio was 49 in 2010, Kenya’s was 82.4—meaning that 17.6% of the population is (theoretically) supporting the rest. That’s a lot of people to take care of. That said, while our own is projected to hit 76.7 in 2100, theirs could go down to 57, even though their population doubling time will be about three times as fast as ours from here forward. (Given the variables, some countries take centuries to double their population, while others can double in decades.) To note: everything here is based on the UN’s medium-fertility variant. This also assumes that the spread of HIV/AIDS and other infectious diseases will be managed, which heavily impacts mortality rates in parts of Africa.

And how is India doing, with its massive population? Not as well as China, with its similar population size but far more land, giving India a population density of 367 people per square kilometer, compared to its giant neighbor’s more comfortable density of 142 (and ours of a roomy 32). China also had a ten-year-longer life expectancy on India in 2010 (not to mention fierce population restrictions, of course). India’s dependency ratio is expected to dip down from its current 54.4, before rising back up to 66.2 in 2100, with the scales tipping to old-age dependency—very different from its 2010 ratio that is heavily made up of children (46.6 out of 100, versus 7.8 of those 65+).

Iceland is an interesting case, with its wee population of about 320,000 and only 3 people per square kilometer. Iceland’s fertility is currently around replacement rate. But it is expected to drop below ours, eventually getting to a negative rate of natural increase. Like the U.S., immigration plays a part in its population growth, but because of their shrinking fertility, their population will age dramatically. With a total projected dependency of 86.5 in 2100 (up from 2010’s 49.4), 59.4 will be 65+, and only 27.2 under 15. Here as elsewhere, let’s hope we continue to be more and more productive in later life. And Iceland may have a climate change that brings warmth and agriculture—so they may draw even more immigrants, although the UN projects their immigration rate will drop down to 0 by 2100. We’ll see.

The Maldives, however, rising just a meter above sea level in the Indian Ocean, may not be there at all in 2100—or even ten years from now, if the polar ice caps keep melting. This would be a case of the environment affecting population, rather than vice-versa. The population of the Maldives equals that of Iceland, but with a density of 1,093 people per square kilometer. Only 5% are over 65, 30% are under 15, and 65% are 15-24, giving them a current dependency ratio of 53.8. Not bad, and it’s projected to drop even further over the next 15 years…and then rise to 93.8 in 2100—if the country is still there.

And let’s go back to Italy. Its population density is quite high, current fertility is less than 1.4 children per woman, and it has a huge elderly population—because their people are living longer than almost any other country’s. (Compare it to the Central African Republic, where life expectancy is only 46.5—and 40.7% of its population is under age 15; clearly the CAR has not begun the transition, and as one of the poorest countries in the world, and with its current state of anarchy, nobody’s really moving there.) But Italy’s population is still growing; it’s just growing more slowly than those on the other end of the scale. Germany’s, however, is not, with a .2% drop between 2005 and 2010. But both Italy and Germany are in the sweet spot of the dependency ratio, where their producers far outweigh their consumers. At least the strength of the Euro is up—way up. I suspect this is the “first demographic dividend” at work, aside from the fertile European climate and technological advantages.

The AP article also doesn’t allow for the “second demographic dividend,” in which people working their way through its nation’s age structures stop relying on their former dependents to take care of them. Planning for this independence, they are more likely to save for old age; then national savings in general increase, leading to more funds that are available for investment, thereby causing the economy to grow faster—provided those funds are invested in productive activities. This dividend is not automatic; policies also need to be in place to encourage labor-market flexibility and trade liberalization, although both of these involve economic risks.

And what about the environment? An endlessly growing global population eventually can’t sustain itself. The end of the article ends with the warning, “The fertility rate needs to reach 2.1 just to replace people dying and keep populations constant.” Yes, but sadly, bringing fertility up is an issue for only a small part of the world. And it’s the part that uses the most of the Earth’s resources, and contributes most to climate change. The article also says nothing about the immigrants that developed countries draw in. Nor does it address what’s required to get to a stable age structure, and dropping fertility is part of that transition.

See why population, economy and climate change are so inextricably linked?

Population issues are a lot less complicated for animals—and a lot harder, as shown in the current DisneyNature live-action movie Bears. After a mother bear spends all spring and summer searching for and battling over food resources—even to the point of having to protect her two cubs from being cannibalized by a huge, dominant male—ultimately the spawning salmon converge with the bears, who romp through the river together and chow down on glorious, abundant seafood, happily building fat reserves for the long winter hibernation ahead of them. For as many winters as their species has left. Take note, humans.

(5/13/14)

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