As U.S. birth rate drops, concern for the future mounts

USATODAY

The drop in U.S. births to their lowest level since 1920 is sounding alarms about the nation's ability to support its fast-growing elderly population.

As public concern mounts, a growing number of books, reports and columns are laying out challenges the United States will face because of this demographic upheaval: Fewer babies are being born while the wave of 78 million older Baby Boomers have only begun to retire (the oldest turn 67 this year).

What to Expect When No One's Expecting: America's Coming Demographic Disaster, a book by Jonathan Last, went on sale this month. A University of Southern California study out last month reported an unprecedented decline in California's child population that "will pose significant challenges for the state's future prosperity."

The recent decline, fueled largely by a deep recession and slower immigration, has pushed the U.S. fertility rate below the 2.1 "replacement level'' — the number of children women are expected to have in their lifetime if current rates continue and the number needed to keep the population stable.

The slowdown is worrisome to many because of the growing gap between working-age populations that fund social programs and the elderly who rely on them.

The imbalance between children and retirees is growing. The economic burden on a child born in 2015 will be nearly twice that of a child born in 1985, according to the USC study.

"These are two trends going in the opposite direction," says demographer Dowell Myers, director of the Population Dynamics Research Group at the University of Southern California. "We will be increasingly dependent economically and socially on a smaller number of children."

In California, where about half of babies are born to immigrant mothers, the immigration slowdown is having a big effect, and it's not clear whether proposed changes to immigration laws will change the pattern. White House and congressional proposals would give illegal immigrants a way to become citizens but that would affect those already here.

"It's totally up in question to what extent immigration will return," says Last, senior writer for The Weekly Standard and author of the latest book on the subject. "All the energy goes out of society when fertility rates get low."

If fertility rates continue at their current pace, Myers predicts "a dropoff in taxpayers, more people selling homes, fewer people buying homes."

In 1970, there were 22.2 Americans age 65 and over for every 100 working-age adults ages 25 to 64, Myers says. By 2010, that had gone up to 24.6 and based on Census projections, the ratio will rise above 40 by 2030.

"One of the most important strategies is invest in the younger generation, the human capital," Myers says. "We can actually survive with fewer kids but we need to bring them along ... At the end of the decade, when Baby Boomer retirement hits us really hard, at that point we'll be begging for workers."

Despite the dip in the U.S. fertility rate to 1.9 children per woman — the lowest in 25 years — and slower population growth, the U.S. is still growing and is a long way from grappling with the demographic crisis other developed nations face.

"Fertility rates across the entire world are all heading downward in ways that are somewhat mystifying," Last says. "It's a global trend."

Italy, for example, has a fertility rate of 1.4. Only 14% of its population is under 15 and 21% is 65 and older. Its population is flat.

Japan is also at 1.4, with 13% under 15 and 24% elderly. Deaths outnumbered births in 2012.

By contrast, 20% of the U.S. population is under 15 and 13% is 65-plus. The nation added 2.3 million people from 2011 to 2012, growing 0.75% to 313.9 million.

"Compared to Europe and Japan, South Korea and Taiwan, we're in fine shape," says Carl Haub, demographer at the Population Reference Bureau. "Once employment improves, one would think we would return to previous levels."

The fertility rate was even lower in the 1970s, when it dipped to 1.7 — a result of inflation and more women going to work to bring home a paycheck.

"We rebounded from this," Haub says.

Whether births will bounce back along with the economy this time is not clear, says Sam Sturgeon, president of Demographic Intelligence, a Charlottesville, Va., company that produces quarterly birth forecasts for consumer products and pharmaceutical giants such as Pfizer and Procter & Gamble.

"We haven't been able to find a substantial difference in people's attitudes toward childbearing," he says. "The two-child family is still kind of the ideal culturally ... However, you can only delay so long and it will have an impact on the number of children we have."

For those who worry that more people will hurt the environment, Last says: "Population growth leads to human innovation, and innovation leads to conservation ... There are no cases of peace and prosperity in the face of declining populations."

Contributing: Paul Overberg