An Aging Population Is a Crisis (but There’s an “Easy” Solution)

Last January, billionaire Elon Musk tweeted:

If the alarming collapse in birthrate continues, civilization will indeed die with a whimper in adult diapers.

That was hardly his last word on the subject. Just to make sure everyone understood his thoughts, in another tweet last August, he wrote:

Population collapse due to low birth rates is a much bigger risk to civilization than global warming.

Elon’s opinions on population collapse came to mind recently when we read last month that for the first time in more than 60 years, China’s population had declined.

In 1961, China’s population fell due to what amounted to the largest genocide in world history. In what Chinese dictator Mao Zedong called the “Great Leap Forward,” the government confiscated the homes, lands, and belongings of hundreds of millions of Chinese peasants.

The policy was intended to transform China into a communist society by collectivizing agriculture and creating state-run communes. Peasants were forced to abandon their homes and relocate to the communes. Inside them, access to food was highly restricted. Meanwhile, millions of acres of farmland were neglected. Historians estimate that at least 45 million people died of starvation or disease, or were murdered outright.

But by the 1970s, Chinese officials believed the country’s population was still growing too quickly. So, Mao’s successor, Deng Xiaoping, rolled out a policy which prohibited most families from having more than one child.

By the early 21st century, the catastrophic effects of the one-child policy were becoming evident. A shortage of marriageable women developed, due to Chinese parents’ preferences for male children. As birthrates plummeted, the proportion of elderly people soared in the population. And Chinese demographers warned that if the policy wasn’t relaxed, China’s population would once again decline.

In 2015, the Chinese Communist party ended the one-child policy. But the damage had already been done. Birthrates continued to fall, and today, Chinese women still have an average of only about 1.2 children. That’s far below the 2.1 children per women for the population to remain stable. Demographers now predict that China’s population will fall by nearly 50% by the end of the century.

For those worried about “Chinese hegemony,” the projected population decline might come as good news. But the fact is, birthrates in all industrialized societies are falling. For instance, the birthrate in the United States is only 1.6 births per woman – significantly higher than China’s, but still too low to maintain our population.

And that could have serious consequences, especially for American safety nets like Social Security and Medicare. As we observed in this article last year, if Congress doesn’t act to increase Social Security revenues or decrease payments, scheduled benefits will need to be reduced by nearly 25% across the board beginning in 2035.

Fortunately, as the title to this week’s missive indicates, there’s a solution to prevent the US population from plummeting. And that’s to encourage more people to immigrate here.

But politically, that will be hard to achieve. As we wrote a few months ago, nearly 30% of voters favor an immediate closure of American borders to all migrants – both legal and illegal. And more than half of Americans believe there’s an “invasion” at our southern border.

That attitude is understandable, because there’s been a 500% increase in illegal entry to the United States in the past five years. Still, as we’ve pointed out many times, the fact that people want to migrate to the United States is a good thing. While it’s important to secure our borders, we think America should encourage – not discourage – immigration to help replenish our population in the decades ahead.

Still, immigration might not be a permanent solution to a falling population. Fertility is falling nearly everywhere on our planet. In the long run, immigrants will be in short supply, simply because there won’t be as many people around wanting to immigrate.

Sure, there will always be temporary exceptions with refugees fleeing from oppression at home. That’s a big reason for the influx of illegal migrants into the United States, given dismal conditions in places like Venezuela, where more than 7.1 million have fled the country.

But at some point, although perhaps not for decades, America’s politicians will need to find a way to encourage women to have more children. And that’s not something any country – including China – has figured out how to do effectively.

Anyone receiving benefits today might not be affected by this trend. But if you’re under 60, you could be. In 2020, there were 3.5 working age adults paying into Social Security and Medicare to support each person receiving benefits from these programs. But by 2050, the ratio will drop to 2.6 unless the birthrate returns to historic norms. And that means those who are still working will need to pay a much higher proportion of their earnings to support the next generation of retirees.

If you were born after 1963, we’d encourage you to live below your means and save whatever you can for your retirement. Because if present trends continue, there won’t be enough people paying into safety net programs like Social Security to pay anywhere close to the benefits you’ve been promised.

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