Monday, July 8, 2019

The Reasons For The "Millennial Baby Bust" Are Not Difficult To Grasp

Denver traffic
A sign of the increasing population times: Traffic on I-25  near Denver. Colorado's population has doubled in the past 25 years. Most of the drivers shown here are Millennials.

True to form, and like a broken clock that's correct twice each day, the WSJ editorial writers did at least get  two things tagged correctly in their editorial ('America's  Millennial Baby Bust',  May 29, p. A14).  Which isn't saying a lot given they addressed about 7 items.  Before examining the major issues they flubbed, let's look at what they got right:

1)"Declining U.S. birth rates are the product of large cultural forces that the federal government can't buy off with subsidies and income transfers."

This is true because too many (upwards of 30 million) would have to be bought off. Facing a $22 trillion national debt such a buyoff simply would not be financially (or politically) feasible.

2) "The evidence from around the world  is that pro-natalist policies can't offset these cultural trends. Singapore's fertility rate has declined since the 1990s to about 1.2 even after decades of government payouts to encourage more children."

The editorial then cites similar stats  from Japan.

Where the editors slid off the rails is when they whined:

"The theory is that it's too expensive to raise children and thus government must subsidize families. The left wants universal child care, paid parental leave, a larger child tax credit.  A faction of the right supports much of that agenda and payments for women who exit the labor force to have children."

First, it IS too expensive for most middle class citizens - millennials or other - to have children. We are talking about $274,000 on average to raise one kid to college graduation stage.   Even to just high school graduation, $220,000 is a conservative estimate.  But the editors conflate two factors here: subsidizing children and parents as a moral decision of a government, and subsidizing baby making.

In a culture in which a never- ending war is fought over abortion it should not be necessary to point out that the "agenda" both of the left (and most of the right) ought to be a no -brainer. That is, only IF a government does do these things can one aver it is seriously interested in tending to the welfare of life AFTER BIRTH..  Then such policies could be seen as real and viable as opposed to the make believe farrago of BS trotted out by Naomi Schaefer Riley in her recent WSJ op-ed "Christians Are Pro-Life After Birth Too.".  Therein citing a few specialized examples of Christian care (i.e. in foster homes, adoptions) as if these constitute universal policies - say paid parental leave, and fully subsidized child care for working parents.

This is important because Rightist Christians, especially the Evangelicals, are among the most belligerent anti-abortion warriors - but among the most miserly in protecting and nurturing life after birth .  So if you as a Christian would have me believe you  are truly "pro life after birth" I want to see you go whole hog in for the higher taxes to support that agenda the WSJ rejects.  And again, this is a separate issue from millennials not having kids.

The biggest reasons for the latter are: 1) the crushing student loan debt, now over $1. 6 trillion and 2) the lack of decent paying jobs to cover (1) as well as afford housing.  In Denver now the median home price is $584,000 and a person (couple) that wants such a home would have to earn at least $90,000 a year to have enough left over - say to raise a kid, pay utilities, groceries, other bills.  In Colorado Springs, the median home price has now spiked to $490,000. Meanwhile, the average employee here in the Springs earns $20.50 an hour.  This isn't even enough to pay for most rents, now averaging just over $1,000 a month.

Now for a personal face on it: A young woman (Hannah Moore) featured in yesterday's Denver Post Business section (p. 1K, 3K) admits she's "worked continuously" since 2007 when she graduated college, and can't afford enough for a mortgage down payment. According to the story:

"About half her income, she calculates, is eaten up by rent, health insurance and student loan payments...of $850 a month."

And Ms. Moore is one of the lucky ones.  At least she can afford to pay off $850 a month in student loan debts. Many can't and either have to settle for a minimum, say $200 a month, or joining a new movement to deliberately default on their accumulated debt.  This will likely wreck their credit forever, or at least long enough to limit their job choice which - even if they get them - will see wages confiscated.

Meanwhile we are informed ('What The Student Loan Debt is Doing To The U.S. Economy'  (June 25, WaPo):

"Researchers need to account for the across the board wage stagnation that's happened since the 1970s."

I'd say it's fairly straightforward if people are willing to open their eyes to the 800 -pound "gorilla" sitting in the room.  That is the explosion in human population. Look, since 1972 the global population has doubled to 7.3 billion and change.  As I pointed out in a previous post (July 3rd), the U.S. population has itself increased by 45 million  since 2000.  Those are 45 million people - hitting age 19 now-   who will need jobs, homes, health care providers, resources - and most of which aren't there.  Colorado alone has doubled its population in 25 years turning our traffic into nightmares (see graphic) and making competition for jobs and homes downright brutal. This state isn't alone, either. Florida has doubled its population twice since 1972.

The results?  The added numbers of job seekers to Colorado represent a supply that can't be accommodated given the kinds of jobs they seek:  mainly IT, MJ specialists or related tech. And they will not take the jobs (especially after graduating with a B.Sc. or B.A.)  that are going begging. Like picking crops of  peaches, strawberries, watermelons or cleaning school gyms.  So, in effect, a large elite labor surplus has been created, from which the tech employers can pick and choose-  and dismiss. 

This upper tier labor surplus ensures corporate employers have zero pressure on them to offer higher wages.   In the words of Adam Gadomski of Aspen Advisers - quoted in one WSJ piece from two years ago-  explaining why so many corporate employers aren't hiring top talent with pay commensurate:

"When companies lament they can't find workers to fill key openings, that is code for: "I can find talent, I just don't want to pay them as much as they cost."

Why would they when they can always find a 'next in line'  (e.g. in the techie labor surplus)  who will accept lower pay, fewer benefits?    Thus the fierce competition for scarce, better quality jobs is ultimately driving many seekers away disheartened.  Because, of course, they can't indefinitely continue to work two jobs - say one at Arby's  and  driving for  Lyft evenings - while paying $1300- 1600 a month rent.

Now, seriously, do you think they can also afford to have kids in this milieu? Of course not.

The home building also isn't keeping pace with the population growth. According to the state demographer Elizabeth Garner, there are fewer new (rental) units than in the past despite the fact that housing construction hasn't picked up since the Great Recession.  According to Garner, quoted in the Denver Post:

"Even though people think we're doing a lot of building it's not as much as they think we are."

The lack of housing, creating a shortage of supply, has radically driven up costs even forcing many who've moved to Denver to now look for housing 67 miles away here in Colorado Springs. So now our housing prices are shooting up too. We regularly receive up to two notices a week from realtors begging to buy our place "on the spot, hard cash".  Of course, we just laugh and tear them up.  As our Springs housing fills up the Denver workers are even being chased as far south as Pueblo to try to find affordable homes . And as they put pressure on the market there with their demand (and again limited supply) the housing prices again shoot up.

Nor is this problem confined to the U.S. As we have recently learned (WSJ, 'Affordable Housing Grows as Global Issue', April 3, p. B5):

"Across 32 major cities around the world, real home prices on average grew 24 % over the past five years, while average real income grew by only 8 percent over the same period."

Too many people!  Add the costs of living (homes, rents, medical care) to the numbers competing for the same limited resources such as lumber (growing ever scarcer) and you have a nightmare, e.g.

Therein, the Earth overshoot (of consumption of planetary resources)  is the basic basis for the "Affordable home bust" as well as the  "Millennial Baby Bust".  And look, don't listen to the Pollyannas  (like Prof. Steven Pinker) because it isn't going to get better.  That much we know.  Barring a massive effort to control births worldwide (no more than 8 b people by 2050)  the resource depletion, crops depletion, wars and extreme inequality that incites them will just keep getting worse.  And the risk of a deadly pandemic like Spanish flu in 1918 culling human  numbers,  also increases.  Which is just a takeoff on Isaac Asimov's theme when he delivered a lecture in Barbados back in 1976,

 i.e. that "if humans can't control their numbers then nature will do it for us."

The formula is straightforward: More humans =   more crowding, more traffic, more CO2 pollution and greenhouse warming, more consumption of water, timber, fuel, and LESS space for other life forms, as well as quality living space to share.  Asimov's conclusion was that Earth's carrying capacity was 3 billion, and we have already surpassed that by 4.3 billion.

The projections now are for at least 10 billion people by 2050, and an 80 percent probability of 12.3 billion on Earth by 2100. Simply put, there simply aren't the resources to support even the lower addition. At root, the issue is sustainability - especially for water which is needed for crops. NO water, no crops to feed a growing population.   With 2.5 billion more humans set to arrive by 2050 where will the added people go? Where will the affordable homes, or food or medical care - not to mention living space - come from ?  The jobs?  The water?  No one has a clue and that future is barely 30 years away, a literal blink.

Regarding  fresh, potable water, we learned in today's WSJ (p. A8):

"By 2030  demand for water in India will be double the country's supply."

And this is twenty years short of the additional half billion people India will likely have by 2050.

But what do the WSJ editors offer instead of hard analyses? Well, more codswallop and distractions, excuses that fit into their capitalism uber alles narrative.  Writing, for example (ibid.), as another "reason" for the Millennial baby bust:

"More women want to find fulfillment in professional work, a strong social force that won't be mitigated by a monthly check if they stay home."

While such fulfillment can't be summarily dismissed it still only accounts for about 30 percent of the failure to start families.  The much bigger reason-  according to the Fed's and other stats (e.g. from the Economy Policy Inst.)-  is not enough income to purchase an affordable home.  Which can then be traced inexorably to the stiff competition arising from guessed it... too many people competing for the existing homes, jobs.

This leads us to ask why it is that excess population is not given more play in the media.   I offered an answer in my May 11 post from last year when I pointed out:

"The hedge funds and corporations that own the newspapers and run the boards of directors are in thrall to consumption and ever more debt.  If they spilled the beans about too many people already, they'd have to admit to their agenda of not only exploding population and exploding consumption but exploding debt. Already, consumer debt of all types (including student loan debt) in the U.S. has hit $15 trillion.   The increasing debt itself is a pronounced signal that things cannot go on as they are, e.g.

In an article appearing in `Physics Today' (July, 2004 issue): `Thoughts on Long-Term Energy Supplies: Scientists and the Silent Lie', Prof. Albert Bartlett (Univ. of Colorado-Boulder) pinpointed the failure to name human population growth as a major cause of our energy and resource problems.

Bartlett asserted that "their (scientists') general reticence stems from the fact that it is politically incorrect or unpopular to argue for stabilization of population - at least in the U.S. Or perhaps scientists are uncomfortable stepping outside their specialized areas of expertise".

Bartlett himself, in one magnificent lecture, i.e.

 Has perhaps given the best reason for this reticence of scientists to speak out: the realization that too few Americans understand the concept of exponential increase which lies at the heart of population increase.  The problem here is that if scientists, e.g. physicists, aren't willing to come forward and call out population growth as a key culprit in our wage stagnation,  planetary degradation and economic morass then few others will.  Interestingly, Bartlett echoes Asimov in his lecture - 17:20 mark on - in noting everything that makes the population problem better are things we are desperate to avoid, i.e. war, disease, famine, accidents, abortion etc.  And all the things that make the population problem worse (more people)  we are for.  (But as he notes, ultimately nature will decide from the former list to limit our numbers if we don't.)

Personally, I suspect another huge reason the Millennials aren't churning out babies is because they relate more intimately to the planetary disruption and damage our numbers have caused. In everything from destroying the oceans, e.g. via warmer temperatures and higher acidification, to the proliferation of plastics, e.g

No photo description available.
 To polluting our limited fresh water rivers, lakes and atmosphere.  They know humans are the primary contributor to these and don't wish to add more contributing consumption units.

Bottom line: Millennials are leery of having kids because of the attendant expense. But this is directly a function of the paucity of high paying jobs needed to: a) purchase a house, and b) raise the kid(s).  That in turn is a function of population pressures in whichever locale the person (Millennial or other) chooses to live. Reduce the population pressure and you reduce the competition for high paying jobs which in turn will lead to more youngsters (graduates)  able to get them. That in turn will lead to a better chance to have kids  - at least afford one - and also afford rent or home ownership. In any case no one ought to be having more than one kid, the Earth simply can't afford it. Meaning those of us who share the Earth can't afford to have another intense resource consumer (and polluter)  added to the mix.

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