I have been wondering what the implications of a declining birth rate might be for a country such as the USA (or the world). The world birthrate in 1950 was almost 35 births per 1000 people, today it is a bit under 18 per 1000 (it is about 12.5 in the USA) – a 50% decrease since 1950! In 1950 there were about 2.5 billion people in the world, today there is about 8 billion – and increasing rapidly. In the USA, the population went from about 150 million to about 330 million people in the same time period, with a projection of around 450 million by 2100. Obviously, there is not an immediate “risk” of a decreasing population in the world, or the USA, any time soon. That doesn’t mean that the growth will continue everywhere during that time. For example, Japan’s population peaked at 128 million in 2008, now it is about 126 million and is projected to be about 105 million in 30 years. In that means that they will have about 12 million excess housing units, millions of empty class rooms, and untold numbers of empty hospitals. There are many countries around the world that are, or will be, experiencing significant overall population decreases, at the same time that they will be experiencing vastly reduced birthrates leading to a major shift in the age distribution within the country.

While there is little “danger” of running out of people any time soon. However, “local” changes can result in major problems. One obvious issue is that while average birthrates are decreasing in countries, it does not decrease uniformly across ethnic, age or society groups. Therefore, some groups will grow in percentage of the population while others are reduced. This is bound to have a very stabilizing influence on “the balance of power” within countries – creating fear and hope (depending upon who you ask). For people in groups that maintain low birthrates, it will feel like an “invasion” by groups that maintain high average birth rates.

Looking into the future “crystal ball” of countries such as the USA, it appears that while the population will continue to increase for many decades, the available work force will change radically. The highly trained and experienced people will “retire” (but not die), resulting in a workforce that is much younger, less trained (and smaller because many of the productive people will be removed from the workforce due to old age and retirement). We hear about the growing problem of the smaller number of youths having to support the growing number of oldsters, both in terms of “retirement” dollars, but also food and other material things. My guess is that this will be manageable for the current cohort of old folks because many, or perhaps most, were able to plan for their “golden years”, but it might become a problem for later generations that don’t have the excess resources required for such planning.

As populations decrease there will be a decrease in things like housing needs, which will result in reduced home values instead of the “normal” annual increase. It is likely to also end up with a lot of vacant homes and office buildings. Perhaps this will reduce housing costs enough to take care of our current homeless crisis. A negative population growth curve will result in fewer people to fill jobs, perhaps increasing wages because labor becomes a scarcity rather than a glut. For awhile, housing will become a glut, rather than a scarcity making housing more affordable, but also removing the profit incentives for building and maintaining property. This is likely to result in vast numbers of abandoned buildings. Maybe building demolition jobs will replace building construction jobs? Other odd things will happen such as sewer systems will fail to function because of insufficient water flow, requiring the replacement of sewer infrastructure. Power grids will need to be revised to meet the new demographics. Highways will become under utilized so instead of a continued need for more and bigger highway systems (funding highway construction projects), simple maintenance will be sufficient. Fewer houses being built will result in less logging, and therefore the failure of the economies of many rural communities that depend upon logging as the source of good paying jobs. Oil will once again become a glut on the market as demand decreases.

The change from an economy based upon continued growth to one that experiences continued shrinkage will be dramatic and pervasive. Almost every industry that depends upon supplying the needs of the population will face a future of decreasing, rather then increasing, profits. Investment opportunities will be harder to find, and will likely return a much smaller return on investment. Taxes on profits will decrease, resulting in a much leaner government, perhaps so much leaner that they will find it extremely difficult to maintain the minimum necessary level of service.

But it is not all doom and gloom – there will be lots of benefits in terms of a cleaner environment, less pressure on the natural resources, the potential for far better paying jobs for those that are available to serve the job markets, and many other things. My remembrance of a USA with a half of the current population was that it was pretty nice. We were not “short on people,” we had all that we needed. There was not so much crime, very little (or no) homeless problems, not so much crowding everywhere, much prettier parks, plenty of job opportunities for the young people, much better schools and a lot more. Some of this was the result of fewer people, but some was the result of a rapid growth curve coupled with an economic system that was designed to thrive during growth creating funding. For example, if you purchased a house at the top of what you could afford, within just a few years wages grew so that the percentage of income devoted to housing was reduced to almost being a nominal amount. It was easy to “bet” on the future because the future was always increasing, making the effective cost of investments such as property decrease rapidly. This will probably not be the situation in a economy based upon shrinking populations and therefore shrinking markets.

I think we are in for some interesting times, or at least my children and grandchildren will see them. I think it is best to figure out what is likely to happen, and begin the process of educating people about what to expect so that they can understand it as an inevitable result of dialing back the population rather than thinking that what they are experiencing is the fault of the government, or because some group is trying to invade in a silent war or some sort. These changes, and many more, WILL occur as we readjust to better fit our population that the world can sustain. The end result will be MUCH better, but the path to getting there from here will be treacherous and difficult. It is pretty clear that the population of the earth will decrease because we are operating above the carrying capacity of the earth. The question is whether we just keep going until it collapses on its own (with all of the horrible consequences that we create), or do we try to manage the decrease in ways that get better over time rather than much worse. It is a choice, but one that we might not be capable of making given the political and social unrest that has been happening in the USA over the past decade or two.