Sunday, December 09, 2012

Falling Birthrates, Falling Down On The Job

To paraphrase Voltaire: the comfort of the rich requires a vast population of the poor.

You’ll notice this whenever (for example) you read comment threads about movements like OUR Walmart (seeking better pay and working conditions for people at that company), or the Hostess/union bankruptcy story a couple weeks back: anytime any worker asks for higher wages or better working conditions, there’s plenty who’ll argue they don’t deserve these things because they’re so very replaceable: “If you don’t like your job, there’s plenty of people who’ll take it!” And that’s true, especially in this dismal economy.

So color me unsurprised to learn that pundits like Ross Douthat and Megan McArdle (both of whom oppose minimum-wage laws for sundry reasons) are extremely concerned about America’s declining birthrate. Douthat tut-tutted about it last week in a New York Times column titled “More Babies, Please,” and McArdle agreed with him a few days later when she worried about “Our Demographic Decline.”

It’s true that our current pay-as-you-go Social Security system can’t survive without an ever-growing base of younger workers to support retirees. But that’s true of any Ponzi scheme; the housing bubble would still be inflating, if only America had a few hundred million extra suckers and some additional too-big-to-fail banks willing to lend them money with no concern about repayment. So even if my generation (X) had enough kids to support us in retirement, that would only kick the can down the road a generation or two.

Of course, to address an argument I’ve had thrown at me before, it’s absolutely true that humanity would go extinct if everybody decided to travel the childfree route. (Though pretty much any life choice would be catastrophic if adopted by every adult on the planet: “You want to be a doctor? But if everybody became a doctor then we wouldn’t have any farmers, and we’d starve to death!” “You want to be a farmer? But if everybody became a farmer then we wouldn’t have any doctors, and would die of easily treatable diseases!”)

Not that Douthat or McArdle resort to the extinction-of-humanity strawman argument. McArdle instead offers the following thought experiment:

… picture two neighboring towns, sharing all the same infrastructure and economic opportunities, with one key difference: their median age. In the first town, which I’ll call Morningburg, the average resident is 28. In the second, which I’ll call Twilight City, the average householder is 58.

Research indicates that even with all the same resources at their disposal, these two places look very different, and not just because one’s grocery store does a booming business in diapers while the other’s has a whole aisle devoted to Centrum Silver.

In Morningburg, young workers are rapid, plastic learners, eager to try out new ways of doing things. Since they’re still hoping to make a name for themselves and maybe get rich, they take a lot of risks. They push their managers to expand into new markets, propose iffy but innovative product lines, maybe start their own firm if the boss won’t let them advance fast enough. For the right opportunity, they’ll put in 18-hour days for a year or more.

In Twilight City, time horizons are shorter—people aren’t looking for projects that will make them rich or famous 20 years from now. They are interested in conserving what they have. That’s mostly rational, given Twilighters’ life stage; but studies show that older people worry more than younger ones about losses and are therefore especially averse to risk. Twilighters also tire more easily and need more time off for illness, so hours worked slowly decline each year. Wages stay steady, however; Twilighters, like most people, get very angry if you try to cut their salary.

That makes Twilighters expensive—so when they lose a job, finding another is tough. As a result, Twilighters tend to cling fiercely to their positions, and may block younger workers from getting a foothold in the labor market.

That’s happening already; high unemployment among the young is exacerbated by Baby Boomers clinging to their jobs because they can’t or won’t retire. But adding more young workers to the competition isn’t going to help, either. Nor is America running short of upwardly mobile young entrepreneurs. The one thing we’re low on these days is jobs that pay enough to support a family, for non-entrepreneurs who aren’t destined to found the next Facebook or Twitter or Apple. (And for every twentysomething American today working soul-crushing hours in hope of getting rich, there’s a far greater number working just to keep themselves housed and fed.)

No, even if American births remain at below-replacement rates, we won’t run out of upwardly mobile entrepreneurs, or of service workers to make their lattes and care for their elderly relatives in nursing homes. But if birthrates don’t increase, there will be a shortage of people desperate enough to work such jobs for poverty wages. And it truly is an amazing coincidence, the large level of overlap to be found between those who oppose minimum wage laws, and those who tut-tut over falling birthrates.


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