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Low population growth: A looming seismic shift

| Monday, May 10, 2021

There were some interesting revelations about the trend of demographics in the recently released U.S. census data from the 2020 census. The results indicated that the U.S. population grew slower in the last decade than it did in the prior decade. Americans are living longer, but they are reproducing a lower rate. And it is projected that by 2050, people 80 years and over will constitute over 10% of the U.S. population. What is at stake for the U.S. in terms of its future is great. A bipolar world order is at hand with the inevitable, unstoppable rise of China. There is more to what appears to be just an economic conflict. So, we ask, what implications could the changing demographics of the United States have for the of America as we know it future?

In terms of culture, the possibility of a cultural stagnation is a real one. We can think of young people as the motive force for culture and other forms of progress for that matter. While it is not necessary that there is a preponderance of young people for them to play their role as catalysts of change, it certainly helps if there is a sea of them, surrounding a rock of seniors or pensioners. So, if the number of older citizens continues to grow relative to the child population, America could be headed for a cultural stagnation. Why? With a preponderance of older people, it is likely that this would enhance the staying power of old ideas in the different sectors of society. The influence of public opinion is strong in a society with mass culture such as the U.S., meaning that old ideas can be transmitted with more force and greater effectiveness. Therefore, if most of the citizens are set in their ways, the younger ones could have serious trouble dislodging old ideas that are mainstream.

In terms of national security, America’s military is a big part of its staying power. As most service members will tell you, it is preferable to have younger folks in the military than older ones. With a slowing population growth rate, competition for bodies will increase across different sectors of society, and this could directly impact the ability of the U.S. military to attract a sizable number of young people to join their ranks. Moreover, because people are having fewer children, the incentives for joining the military could be weakened for a significant portion of the population. The military guarantees college education for its officer cadets. Individuals who are unlikely to afford college tuition will take up this opportunity in return for their service to their country. As families have fewer children, they will probably be better able to support them given the scarce resources. Therefore, for some people, the incentive to join the military will weaken. The military must therefore have a game plan going forward. Some things they could do include making national service compulsory for a couple of years after college so that young people get some critical life skills while ensuring that the military always has sufficient bodies to execute its constitutional mandate of preserving the democratic order and the territorial integrity of the state. 

Economically, the picture isn’t so hopeful. Economists have belabored the point of an increased burden on pension funds and social security if there are more seniors than there are currently. It is important to note that a big part of the U.S. economy is consumption, which constitutes about 70% of the GDP. With more seniors who have lost their sources of income, we can expect consumer demand to fall. This increased pressure on social security will be compounded by a shrinking of the work force which could reduce the overall productivity of the economy. Moreover, the lower population growth could mean reduced labor supply which would push wages up and increase the cost of doing business. Fewer working people would also mean a higher dependency ratio. The U.S. must prepare for this possibility. Some ideas could include reimagining its approach to immigration as immigrants could, quite literally, become the lifeline of the America economy going forward, both in terms of production and consumption. This point has been made by several economists. But the country could also want to invest heavily in technology, especially artificial intelligence that can make up for the decrease in labor supply to maintain high levels of output.

In terms of politics, aside from the apportionment count that determines the number of seats in Congress allocated to each state, a smaller, older population could have significant political implications. For starters, there could be a remake of the American electoral map. As population shrinks in some states and soars in others, calculation of the political game could change. We could see new centers of American culture. We could see a shift in power centers as some groups gain numerical power while others lose. Political upstarts with grand ambition must keep their eyes on the dashboard for these emerging tendencies.

What is happening in the U.S. is not new. It has been happening in parts of Europe for a while now. The U.S. can look to its European allies to see how they are dealing with this as it searches for its own responses to a seeming seismic shift in its course.

Trevor Lwere is a junior at Notre Dame majoring in economics, with a PPE minor. He hails from Kampala, Uganda and lives off campus. He is a dee-jay in his other life and can be reached at [email protected]

The views expressed in this column are those of the author and not necessarily those of The Observer.

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