Doom mongers have been warning about the danger of overpopulation for centuries. Mass starvation and resource shortages were predicted to be right around the corner—the planet couldn’t possibly provide for the ever-increasing number of humans.

A survey conducted just six years ago found that nearly 60% of Americans and more than 80% of American ­scientists believed that increasing world population is a major problem. But what if everyone’s worried about exactly the wrong thing?

The problem that the US will confront in the coming years is a rapidly declining population. US birth rates are at an all-time low—American women are having an average of 1.7 babies apiece, according to 2018 estimates, well below the 2.1 required to maintain a country’s population.

The trend of falling birth rates reduces demand for natural resources, but long term, it also means slower economic growth, a shortage of ­workers and less tax revenue for government programs including Social Security and Medicare.

This falling population problem is even worse across much of the rest of the world—global birth rates have plummeted by more than 50% in the past 50 years. And the populations of Italy, Japan and South Korea are ­expected to be halved by the end of this century.

Bottom Line Personal asked futurist Erica Orange to discuss the ongoing “baby bust” and its implications for America and the world.

The US

America’s birth rates are higher than those of many countries in Asia and Europe, but they’re low enough to take a toll. Here’s why this problem isn’t ­going away and how it could impact your life…

Don’t expect a dramatic post-­pandemic birth-rate rebound. The US economy weathered the pandemic surprisingly well, but that won’t trigger a baby boom among people who put off having babies due to 2020’s uncertainty. It isn’t the overall health of the economy that affects birth rates…it’s how economically secure adults in their prime childbearing years feel about their futures. Today’s young adults are extremely anxious about money. A 2020 Deloitte survey found that 44% of millennials (that’s the generation born between 1981 and 1996) and 48% of Gen Z (born between 1997 and 2012) reported being stressed about money most or all of the time—and that survey was conducted shortly before the pandemic. Stressed young adults may have fewer kids or none at all.

Big homes in the suburbs could decline in value. Real estate has rallied recently, and the suburbs, in particular, have prospered as urbanites fled some cities during the pandemic. But low US birth rates suggest that suburban home values are at risk in the coming decades. Fewer and smaller families will undercut demand for big ­houses with access to good public schools. Households that don’t have kids are more likely to opt for either the low cost and scenic beauty of rural areas or the dynamism of cities.

Not all cities will thrive, however. Very expensive cities, such as New York and San Francisco, historically have justified their astronomical costs mainly by offering access to the most lucrative jobs. In this post-pandemic world, many employers are willing to work with remote employees—so people in search of urban vibrancy are likely to choose vibrant cities with lower costs of living and higher quality of life. ­Cities well-positioned for post-pandemic growth include Nashville, Austin, Miami and a number of mid-size Florida cities such as Ft. Myers and Port St. Lucie.

Retire the idea of retiring by 65. On first glance, the statistics suggest that the pandemic inspired an early retirement trend—around a million and a half fewer Americans age 55 and up were in the labor force early this year than one year ago. But for several reasons, the long-term trend almost certainly will be for later retirement.

Employers will become more willing to hire older workers. It historically has been challenging to land a job after age 50, but by the end of this decade, the massive Baby Boom generation will have reached 65. The generations that follow won’t be able to supply enough workers to take their place, much less fill the six million new US jobs expected to be created this decade.

Remaining in or returning to the workforce is going to become more appealing than ever to people of retirement age. The pandemic made employers increasingly willing to hire remote employees and made most employees and retirees comfortable with video-­conferencing, making it more feasible than ever to move to a dream destination while working full- or part-time.

Many mature adults will need to keep working for economic security. The number of older Americans ­receiving benefits is climbing, the number of workers paying into the system is declining, and the system is due to run short of funds by the mid-2030s. Raising payroll taxes cannot realistically fix this problem, so the age to receive “full retirement benefits” will have to creep up and/or benefit amounts will have to decline. (Full retirement age is currently 67 for anyone born in 1960 or later.) Politicians likely will put off this unpopular move as long as possible, reducing the impact on people currently in their 60s and older.

The World

The baby bust is even more dramatic in much of Europe and Asia than in the US, though it’s not a bust everywhere…

Africa is on the rise. If you look at the list of countries with the highest birth rates, one thing stands out—almost all are in Africa. The continent’s population is expected to double by 2050, at which point it will make up about one-quarter of the world’s population. Africa’s growing population also is rapidly urbanizing and becoming better educated…its infrastructure is rapidly improving…and it has relatively few retirement-age people to take care of compared with the rest of the world. Add it up, and the continent is extremely well-­positioned for rapid growth. Africa likely will “digital leapfrog” the West—advanced technology in newly developed areas can help to circumvent the bureaucracy of older systems elsewhere. This already happened with mobile telephony in Africa. As it dropped in price and became more widely available, there was little incentive to build traditional phone lines, so Africa leapfrogged the rest of world when it came to mobile banking, money transfers and microfinancing.

China has been aggressively investing in Africa’s infrastructure for years, no doubt realizing that Africa’s growth prospects are better than its own. Individual investors might decide this is a good time to seek out mutual funds and stocks that offer exposure to Africa.

Also well-positioned is Israel, which is among the very few nations that have both high birth rates—about three babies per woman—and a highly developed economy. Its gross domestic product (GDP) per capita exceeds those of France and the UK.

China won’t be where everything is made for much longer. China accounted for an astonishing 28% of global manufacturing in 2018. That figure is going to fall as the baby bust hits China especially hard, in part because of its imposed “one child” policy from 1979 to 2015. China’s working-age population already is declining, and its total population is on course to fall behind still-growing India’s by 2027.

The Chinese government clearly has no intention of surrendering its leading position on the world stage, however. The country has been accelerating its control over Hong Kong…flexing its military muscle toward ­Taiwan…financing extensive infrastructure projects in Africa…and planning military bases overseas—all attempts to compensate for ebbing manufacturing strength. This military and economic expansionism is very likely to increase as China’s workforce continues to contract in the coming decades, creating a massive threat for the rest of the world. China is poised to become the leader in everything from quantum computing to artificial intelligence and robotics, and its New Silk Road initiative will redraw the global map.

Retirement to desirable European locales could become more affordable. If you dream of retiring to a ­sunny cottage in a warm part of Europe, there’s a good chance you’re imagining Greece, Italy or Spain, which are among the European nations where birthrates have fallen furthest. Declining populations can lead to falling real estate prices—there are fewer potential home buyers. US retirees in search of European retirements might be able to find bargains—a nice home in a pleasant village or small city could cost less than $100,000. Falling property values lowers rents, too, if you don’t want to buy. Of course, prices vary and access to good health care will be a concern for retiree transplants.

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