America’s slowing population growth puts limits on its future
The U.S.’ sharply declining rate of population growth threatens to put an expiration date on a country built around a vision of endless reinvention.The big picture: Fewer people means fewer workers to support an aging population, fewer innovators with new ideas, less economic growth — and more of one thing: political fights over a shrinking pie.Stay on top of the latest market trends and economic insights with Axios Markets. Subscribe for freeBy the numbers: At the end of April, the Census Bureau reported that between 2010 and 2020, the U.S. population grew at its slowest rate since the Great Depression and the second-slowest rate in any decade since the country’s founding. Recent data from the CDC indicates the U.S. birth rate fell for the sixth straight year, with births falling precipitously in December, around when any babies conceived during the start of the pandemic would have been born.The fertility rate — defined as the number of live births per 1,000 women aged 15–44 — fell from 64.1 in 2010 to 55.8 in 2020.That’s in part a result of positive changes, like the sharp drop in teen pregnancies, but it also means Americans are not having enough babies to keep the country’s population growing by births alone.The impact: Countries with falling population growth — and eventually population decline — face serious economic, political and even cultural challenges.Fewer births combined with longer lifespans mean fewer productive young workers to balance those in retirement. As a result, JPMorgan senior economist Jesse Edgerton notes, there will be excess capital sloshing around the global economy, keeping interest rates low and making it more difficult to save for retirement. While a slower-growing population puts less pressure on the climate, new ideas come from people, and fewer people means fewer sources for those new ideas. That leads to a slowdown in innovation at the very moment when we need it most, as Stanford economist Charles Jones argued in a recent paper.Put those two trends together, and you have a formula for corrosive generational conflict and a country in long-term decline — which is exactly what a 2019 Pew survey about Americans’ attitudes toward the future found.”I think for many [Americans], it’s not a completely boundless dream anymore,” Lanhee Chen, a public policy fellow at Stanford’s Hoover Institution, told the Washington Post. Context: Slowing population growth is a reality throughout most of the developed world, as well as in China, where government data released this week showed the average annual population growth over the past 10 years was just 0.53%, the slowest in decades. Yes, but: The U.S. has one option to keep its population growing that China and many other countries lack: immigration.Immigration has always been key to U.S. population growth — absent its foreign-born citizens and residents, the country would have some 40 million fewer people, and cities like New York and Chicago would have shrunk.The demand to come to the U.S. is still huge: Data from Gallup indicates 42 million people in Latin America and the Caribbean alone would move to the U.S. if they could.The average age of immigrants is more than seven years younger than the median American, which means they’re in a demographic position to bolster the workforce for decades and have more children of their own.The catch: While the U.S. had a net migration of more than 1 million people a year leading up to 2016, that number fell to an estimated 595,000 in 2019, even before pandemic-led border controls closed the spigot further.A report this year from the National Immigration Forum found increasing net immigration levels by at least 37% — approximately an additional 370,000 immigrants per year — would prevent the U.S. from falling into a “demographic deficit.”What to watch … the progress of President Biden’s immigration proposals, which would expand legal immigration while creating a pathway to citizenship for millions of undocumented immigrants. The Biden administration has also proposed a number of family-friendly policies in its American Families Plan, including enhanced child tax credits and free preschool for children ages 3–4. But in European and East Asian countries that have grappled with low birth rates for years, attempts to reverse the decline through pro-natality policies like child allowances have done little to bend the fertility curve upward.While Americans have consistently said they desire more children than they actually have, and some demographers suggest the COVID baby bust could be reversed as prospective parents have the children they put off earlier, long-term trends around declining marriage rates and delayed childbearing will be difficult to reverse.The bottom line: No country in the world has figured out a reliable way to induce citizens to have more children over the long term, which means the U.S. can live up to its self-conception as a “nation of immigrants” — or face a shrinking future.Like this article? Get more from Axios and subscribe to Axios Markets for free.