09/14/2021
In 1968, a book was published that would have a profound effect on the course of world events. It was called, The Population Bomb, written by a Stanford University professor named Paul Ehrlich.
The author pointed out that the population of Earth had doubled in the space of a single generation, from 2 billion to 4 billion, and was growing at a rate that would cause it to double again over the coming 30 years. The world, he argued, would not be able to sustain that growth.
He expected that the biggest problem would be agriculture, which would not be able to produce enough food, especially as more land and water would be diverted directly to people. Famine would surely follow, most likely accompanied by disease, pestilence, and war.
You could make a case that some of those predictions have actually come to pass, but many of Ehrlich’s specific calls missed the mark. Moreover, famine has more often resulted from political strife than agricultural failure.
At any rate, the book became part of a movement that raised awareness about the prospect of overpopulation. Since that time, fertility rates have declined worldwide along with mortality rates, the population has doubled over a 50-year span, and the human race consumes 24 percent more calories per person.
As social scientists have become less concerned with the growth of the population, economists have become more concerned with the lack of it. For centuries, economic prosperity has been tied to the constantly increasing supply of potential customers, and the corresponding increase in the labor supply.
That being the case, I was struck by a recent headline in The Wall Street Journal, “U.S. Population Growth, an Economic Driver, Grinds to a Halt.” The subhead was, “COVID-19 pandemic compounds years of birth-rate decline, puts America’s demographic health at risk.”
I know we’ve had a lot going on in the news for the past couple years, and stories that normally would have been big have gone largely unreported, but I still find it hard to believe that this development is getting so little attention. Population growth in America has always been a given, and all our businesses rest on the assumption that it will continue indefinitely.
In the year ending on July 1, 2020, estimates indicate that the total U.S. population grew by approximately one-third of 1 percent, which is the lowest rate in our history. Some experts think that the following year could show an actual decline.
In 25 states last year, there were more deaths than births, which is up from only five states two years ago. Overall, the birth over death rate has dropped from a peak of 2.75 to 1 during the early 1950s, to about even right now.
Historically, fertility rates have dropped during times of economic uncertainty, and we have certainly experienced a lot of that in the past year-and-a-half. The pandemic has the additional effect of reducing human interaction in general, and procreation in particular.
COVID also put a crimp on immigration, which had accounted for a third to a half of population growth in recent years. It is something of a wild card going forward, as the improving U.S. economy may lure workers with more jobs, and the Biden administration loosens restrictions that were imposed by the previous president.
If that upsurge in immigration doesn’t happen, then the population decline that some demographers have predicted seems increasingly likely. Nor is it only an American trend. The whole industrialized world, including Russia, China, and the European Union, have seen fertility rates drop below replacement level.
The basic reason for the long-term decline is that Millennials everywhere are choosing to have fewer children, but the thinking behind their choice is hard to pin down. As in most things, at least a part of the explanation comes down to money.
Over the past two decades there has been a series of financial shocks that has undermined confidence in the economy, starting with 9/11 and running through the financial crisis of 2008, the Great Recession, and the COVID recession of 2020. In addition, there is an ongoing shift in employment from the old brick-and-mortar economy to the new digital world, which creates a pervasive sense of job insecurity among a large share of people in their childbearing years.
A third economic factor is the increasing educational attainment of women in the United States. As more women are obtaining advanced degrees across all disciplines, including law, medicine and engineering, they are less willing to interrupt their career tracks, especially at a young age. They tend to have fewer children, later in life.
There is also a geographical angle to this. According to the 2020 census, 55 percent of U.S. counties had more deaths than births last year, versus 37 percent of counties in 2010. Counties fall into six categories: large city, large suburb, medium city, small city, small town, and rural.
The change happened across all categories, but the ratio is very different depending on population density. In big cities, there were nearly two births for every death in 2010. By 2020 that ratio had dropped to about 1.7 to 1. In rural counties, the number of births per death is about half of that, in both 2010 and 2020.
Over time, the population decline in rural areas feeds upon itself. Companies move to places that have a more abundant labor force, and working-age individuals and couples move to places that have more jobs. The population of rural America is not just getting smaller, it’s getting older.
What does all this have to do with selling art supplies? Plenty.
The extent to which population decline affects your store may well depend upon which of those six demographic categories your location falls into, and it’s not only about having fewer prospective customers. You may do well with an older clientele, or a younger one, or among people who don’t live in your immediate area.
The bigger problem could be staffing. Between COVID-19, diminished immigration, enhanced unemployment benefits, urbanization and declining fertility rates, you may have a very difficult time finding quality employees at an affordable price. Our own company is in a small city, and we have several long-term vacancies.
Things could change in the next year, and the U.S. population trend could turn around. The pandemic could end (please, God), which might encourage young people to have more children and also take a leading cause of death off the table. Immigration could pick up, and a rising economy could revitalize rural America.
In any event, good employees are hard to find, and it doesn’t appear as if that situation is likely to change any time soon. The Labor Department recently announced that there are more than 10 million job openings in the United States for the first time on record.
If you have good people, keep them close.
You can e-mail Kevin at kfahy@fwpi.com
