Baby Boom to Baby Bust (Craig Douglass On Consumers)

“By improving health and empowering women, population growth comes down.” Bill Gates said it, and its validation may be occurring through the measurement of birth rates.

The improving health part of the quote could mean a number of things. First and foremost would be the increase in life expectancy. But coupled with empowering women, we see that the choice of having children later in life is made safely possible, along with a decrease in the birth rate among teens.

A few statistics from the Centers for Disease Control & Prevention: Women ages 30-34 had the highest overall birth rates. However, those rates decreased 2 percent in 2016-17. (To further the later-in-life point, women ages 45-49 saw a 3 percent increase in their birth rate.) Teens between the ages of 15-19 had the greatest decrease in births during the same period, dropping 7 percent. This teenage group was followed by women in their 20s, with a 4 percent drop in birth rate since 2016.

Put all this together and the birth rate in the U.S. is now at its lowest ebb in 30 years. The overall rate between 2016-17 dropped 2 percent. The lowest rate in 29 years was recorded the year before.

Medical advances in the form of reproductive technology are responsible for health and empowerment. Or choice. Setting the moral debate aside, for now, the fact is that pregnancies and parenthood are being delayed until later in life. With the decrease in births to teens and 20-somethings, there is now created a “baby bust” that could be troubling to the economy from available workforce, or replacing an aging workforce, to consumer-driven GDP to tax revenue for economic stability and government services (such as caring for the growing numbers of elderly Americans, which some chronological clinical guidelines have changed from over 65 to 75 and over). There is no doubt that the solvency of Social Security and Medicare will be further compromised over the next generation.

These columns, when dealing with consumer demographics and the economy, just wouldn’t be complete without yet another reference to millennials. I’m not the only one, though. Ariana Cha, writing in The Washington Post, reports millennials are choosing not to have children primarily due to their mobile and transitory lifestyles: from job hopping to bed hopping. But they will begin to settle sooner or later. And with that settling, or perhaps matriculation to maturation, parenthood as a lifestyle may return. Albeit in their 30s and into their 40s. (The oldest millennials are now in their late 30s.)

Research and opinion from a 2017 report by Negative Population Growth, Inc., located in Alexandria, Virginia, also key on millennials. “Millennials came of age during the worst economic crisis since the Great Depression,” the report states. “Many saw their parents lose their jobs, their homes, and their dignity — and vowed they would not repeat those mistakes. As a result, life-cycle milestones so prized by their Baby Boomer parents — the first driver’s license, marriage, children, home-ownership — are postponed or abandoned altogether by millennials.”

The profile of emerging consumers is sure to encompass these changes as the bubble moves through the next 20-30 years. Considering home-ownership alone, there certainly could be a marked decrease in not only new housing starts and existing home sales, but also a softening of sales in and use of furniture, fixtures, appliances, energy consumption, insurance, financing services and more.

Natural and economic resources can be overly tasked when the birth rate or population growth is too high. So there is a sweet spot or balance that benefits a particular society. The range of that balance is called “replacement level,” meaning the birth rate per 1,000 in population is within a range of deaths or possible outmigration. Of concern is the fact that the replacement rate in the U.S. has been drifting lower since the early 1970s.

Here’s a politically volatile notion, as reported by NPR: If the economy is to enjoy the benefits of population equilibrium, and the positive economic impact that comes with adequate population growth, the U.S. will have to rely on immigration to increase, at manageable levels, the employed-productivity of the country.

Craig Douglass is an advertising agency owner, and marketing and research consultant. He is president of Craig Douglass Communications Inc. of Little Rock. Email him at Craig@CraigDouglass.com.