The Next Global Dilemma: An Aging World

by Tina Kim
Co-Editor

The next great crisis of our generation may not be global warming, nuclear attacks, looming deficits, or any pending apocalypses. It’s babies—specifically, not enough babies. 97 percent of the world’s population now lives in countries where fertility rates are declining, according to the Wall Street Journal. In 60 years, the global population will begin to decrease and the world will lose its most valuable and fundamental resource: human capital. For the past century, large populations have brought innovations to technology and science and provided the manpower to drive the economy. Moreover, a plethora of taxpayers have allowed governments to fund healthcare, defense, education, and all other spending. However, at some point when the world transitions into a situation where the old largely outnumber the young, we will come face to face with an immeasurable problem.

Throughout the world, countries have already faced the consequences of low fertility rates, varying culturally from region to region. In Asia, “tiger” nations such as China, Japan, Korea, Taiwan, and Singapore have fertility rates well below the 2.1 replacement rate. The “tiger” culture of an intensely competitive workplace and lifestyle leave individuals without much spare time while depriving them of the disposable income necessary to enjoy their lives and raise a child.

“Most of my friends are not married,” a 35-year-old female civil servant in Singapore said in an article from Forbes. “They don’t want to be single but they are too busy with their work commitment. My friends are consumed by work. Money, status, prestige, climbing the ladder. You expect things to change when you get older but it doesn’t. The calculation just doesn’t work out.”

Joel Kotkin, author of The Next Hundred Million: America in 2050, explains this issue as an “economic and spiritual” problem. Economically, the high costs of living and the time and money consuming nature of child rearing are seen as major roadblocks. In addition, unlike in the U.S. (with a few exceptions like New York City), many of these Asian countries have high density apartment living. In high density areas, traffic congestion, overloaded public transport, higher rates of crime, higher costs of basic products and services, and general overcrowding are everyday occurrences. Kotkin, who has interviewed and researched individuals living in Singapore and other East Asian countries, stated that spiritually, people who live in these conditions are reflective of their difficult lives. For these individuals, the growing pessimism towards the future has given them a dismal outlook for the next generation, which has led many to not have children.

In 2009, 20 percent of women between the ages of 30 and 39 chose to remain childless; it is estimated that in some East Asian societies, up to a third of all women will remain childless. In addition, as women become more educated, many have pursued their own careers, which have prevented marriage or child rearing. As a result, women are no longer able to take on the cultural expectation, including that of being the sole caretaker of the child. Countries in Southern Europe, which have had similar cultural views, have also had significantly lower fertility rates compared to their Northern European counterparts.

In Northern Europe, greater male participation in child rearing has offset much of the difficulties faced by other countries. Such cultural differences have influenced government policies and have led to higher fertility rates. An article by the New York Times states that, “many countries with greater gender equality have a greater social commitment to day care and other institutional support for working women, which gives those women the possibility of having a second or third child.” For instance, Scandinavian countries provide state support for having a child and guarantee paternity leaves, which gives women the opportunity to work while raising a baby. More importantly, since both parents are more likely to work, financially, the couple is better able to handle obstacles such as high living costs.

In response, many governments in Asia have instituted measures such as state-funded childcare to encourage parenthood. However, according to Kotkin, these state-funded initiatives will only marginally increase fertility rates. The fundamental determinant in encouraging people to have children would be to improve the difficult living conditions people deal with on a daily basis; addressing problems such as high commodity costs, high college tuitions (and debt), rising housings costs, and in some cases environmental pollution, would be more effective in convincing parents to have children.

To make up for these decreases in fertility rates, countries such as Germany, Japan, and the U.S. have largely depended on immigration to offset decreasing birth rates. For example, Germany attracted migrants to establish a highly skilled and productive labor force in order to create an export oriented market. Thus, Germany is able to pay for welfare and provide social programs that many Eurozone countries have struggled to provide. In contrast, debt-ridden Southern European countries such as Spain, Italy, and Greece offer no incentives or job prospects for people to immigrate. By depending on tourism and real estate, when the economy collapsed due to the housing bubble and the financial crisis of 2007, many of the foreign investors fled these countries, leading to great debts.

But even for Germany and other countries that count on imported labor, the dependence on immigration may not be an option in the future. In the next century, the world’s population will decline and so will the surplus of people in Asia, the Middle East, and Latin America. Even if regions such as Africa and India do have surpluses of people, there is the issue of having an educated and skilled workforce. According to UNESCO, South and West Asia and Sub-Saharan Africa have among the lowest literacy rates in the world, at about 63 percent.

Ultimately, Kotkin predicts that the “diminished labor force and consumer base” will eventually “slow economic growth and limit opportunities for business expansion.” However, there are predictions that the need for human manpower will be replaced with innovations in technology and economic growth will continue. But how many more Steve Jobs can come from a significantly smaller population?

Politically, the smaller youth population will have many problems. On one level, the youth will have less political power and representation, as seniors will be the majority of voters. A UN report states that in 2050 the number of people 60 years and older will increase by a factor of 2.6 (from 784 million to more than 2 billion). These seniors will need social security and healthcare, but how will a disproportionately smaller workforce handle paying for these programs? These individuals have the burden of paying today’s and future government debts, along with healthcare and social security for seniors as well.

Already, there have been protests against governments cutting social programs and raising taxes. With income inequality increasing and the population decreasing, there may be a future where seniors will not be able to count on state support. Governments around the world have become aware of their impending demographic cliffs. However, the general trend among political figures around the world has been to implement austerity measures, which ultimately ignores addressing these core issues. Austerity will no longer work in a future of an unbalanced population, increased income inequity, and a world of reduced economic growth.

Whether governments do anything to address these issues or not, the social, economic, and political consequences are imminent and they will affect people on a global scale. How exactly will this unfold? This generation will just have to wait and see.

Facts and figures obtained from Forbes, The New York Times, The Wall Street Journal, UNESCO, the United Nations, and a personal interview with Joel Kotkin. 

Tina Kim is a second year Communications major and Urban Planning and Public Policy double minor at UCLA. She is co-editor of The Generation.