Population Bomb Diffused by Baby Bust?

In an interview with the San Francisco Chronicle this Sunday, George Schultz cited from his recent work in demographics that China is entering a "baby bust" situation, largely due to two generations of its one-child policy, that is similar to that already being experienced by industrialized countries such as Japan, Spain, Italy, Sweden, Germany, Russia, Canada and others.  Some of these countries have begun to institute national programs to address the social problems stemming from declining birthrates and rising life expectancies.

While the reasons for this "baby bust" phenomenon are not universal (posited influences range from reduced reproductive fertility, social policy such as China's, economic pressures, and even the introduction of television to society,) the effects of the shift are similar across all in this club of zero or negative growth nations: a shrinking work force and a growing segment of society dependent on social services.  Faced with a declining tax base and expanding demand for health care and elderly care, these nations are grappling with this problem in different ways.  In Sweden, the government has created incentives for couples to have larger families, including extended paid leave from work for both parents, and increased tax credits for dependents.

This demographic pattern was not anticipated just a generation ago.  Paul Ehrlich's popular 1968 book The Population Bomb predicted that human population will expand unabated until a tipping point is reached where food supplies can no longer sustain the growth and a devastating collapse, characterized by famine and wars, will occur.

The chart at right, from an address to The Longnow Foundation by Phillip Longman in August 2004, demonstrates that unabated growth is not occurring.  It shows China's current population distribution, and the projected distribution is 2050.  While other countries' projections for 2050 look even more top heavy, it is the magnitude of China's problem that rings alarm bells.  Between 2030 and 2050 China's absolute population will decline by 50 million!  Yet the decline will not affect the population numbers over age 60. 

Schultz suggests that China is in a race to become rich before the crux of the "bust" is reached.  The implication is that a lot of money will need to be diverted into services for the older Chinese, and that there is not enough yet in the domestic coffers. Assuming that China's economic growth propels them through the crux, their culture of state owned enterprise and the employee pensions and insurance that it guarantees might serve them well by minimizing the disruption that would otherwise come with new systems of doling out and taxation.

But what will happen in a country like the U.S. where the welfare systems are being dismantled?  Are personal savings going to be sufficient when one in three Americans are over 60?  Will the shrinking younger generation within families be able to shoulder more of the burden of supporting their elders?   How would new taxes on the working class be handled?  The U.S. is not immune to the "baby bust" problem, but the problem is currently of little consequence to the IRS because immigration rates exceed the reproduction deficit.  That could change under certain immigration reform.  Compounding the potential for problems is the increasing obesity and sedentary lifestyle in the U.S. that puts more people in perpetual health care dependence for longer portions of their lifespan.

We do not yet know whether the shift in the demographics of so many industrialized nations is actually a slow collapse congruent with the outcome of population bomb predictions, or whether it is a stabilization process that ends in a state of equilibrium.  Given the uncertainty of the long term effects of the "baby bust", what steps can societies begin to take toward mitigating the risks?  Is Sweden on the right track with incentives to increase family size?  Does the U.S. need to augment certain welfare programs designed for older citizens?   Is China's situation so unique that any lessons there are not applicable elsewhere?  Let's hope we have some answers before the "bust" becomes a new "bomb".

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