A Demographic Morning in America

by Gustavo O. Fernandez

When considering the question of American decline, one could point to yawning budget deficits, unaffordable entitlement programs, a creaking infrastructure, or the coming ‘fiscal cliff,’ comprised of tax hikes and budget cuts, as domestic factors contributing to an American power in retreat. Internationally, one could cite China’s rise as a potential threat, and another indicator of possible American decline. Yet, when one looks at the country’s demographic projections through 2050 the United States has a strong, positive outlook that will make solving these challenges manageable.

The United States has always been a country welcoming to immigrants, who have been enticed by the power of democracy, opportunity, and the promise of a brighter future for their children. This promise continues to manifest itself with strong population growth. For example, over 90 percent of U.S. population growth since 2000 has come from immigrants or the children of immigrants. Because of this trend the population of the United States is predicted to increase by an additional 30 percent between now and 2050.

A growing population means that the base of citizens that can be taxed will increase, making it relatively easier to fix our deficit, and with less pain, since it will be spread across more people. It also means that we will have the resources to continue to staff our military, and that we will have a robust working population that will support our retiring baby boomers. Most importantly, as the United States grows and becomes more racially and ethnically diverse, it will lead to more innovation, and more entrepreneurship. For example, between 1995 and 2005, 52 percent of American start-up companies were founded either by immigrants or their children. This is the kind of innovation that we need in order to meet the challenges that we face today.

Strong population growth will also help the U.S. internationally. China is often cited as one of the central potential threats to American power. Yet when we compare fertility rates we get a different picture. China’s fertility rate, at 1.56, is below replacement. This means that China’s population is, in fact, shrinking. In contrast, the U.S.’s fertility rate, at 2.08, shows a population that is growing. This will be a challenge for China, and one that will limit its ability to project power internationally over the medium and long-term.

Some readers may greet with skepticism the news that China’s shrinking population is a problem. After all, China is a huge country of over one billion people. It is true that a shrinking population is not necessarily bad. The challenge that China faces is that its population is both shrinking and aging very quickly. China’s population will begin to shrink after 2026, and by 2050 the size of the working population will be 50 percent smaller than today. This means that the country will have fewer working-age people taking care of their abundant older relatives, and with no comprehensive, functional pension system in place, China will struggle to meet the needs of its quickly greying population. This will be a significant strain for China, and will demand the attention of the country’s leadership. And while China turns inward to deal with its “senior tsunami,” the United States will continue to enjoy the benefits of strong population growth.

Population growth will continue to shift the ethnic makeup of the United States. The ethnic makeup may be evolving, but the idea of America, what makes our country exceptional, is alive and well. And that’s good news. The positive demographic numbers mean that we will have the people, ideas, time and energy to find innovative solutions to the problems that worry our country today.

Simply having a positive demographic outlook won’t solve all of our problems, but it is a very good start. Demography may not be destiny, but it does put us in a strong and advantageous position moving forward. It is now up to our political leaders and policymakers to craft and implement the correct forward looking policies to effectively harness the demographic advantage that the United States is set to enjoy for the next 40 years or more. Hopefully our leadership is up to the task.

Gustavo O. Fernandez is a graduate student in the Master of Global Policy Studies program at the Lyndon B. Johnson School of Public Affairs at The University of Texas-Austin.

By winboden Posted in GT2030

3 comments on “A Demographic Morning in America

  1. Pingback: “Global Trends”- CIA: Asia will as before be the center of economich development – Europa and US will losse their postions. Middleclass will be soon most important globally, but consume more and more, which will be a big problem for envi

  2. Pingback: “Global Trends”-Prognose der US-Geheimdienste: Asien überflügelt USA und Europa. Zum ersten Mal überhaupt wird eine Mehrheit der Erdenbewohner 2030 nicht mehr in Armut leben, “erstmals wird die Mittelschicht in den meisten Ländern da

  3. I’m afraid this premise is mistaken. The U.S., with less than 5% of the world’s population, is using 25% of the word’s resources. We cannot meet our own needs without exporting our dirty industries to other places. We are pumping our aquifers and rivers dry. A staggering percentage of our waters are so polluted as to require advisories about eating the fish.

    There comes a point where adding people does not improve a place. We are at that point (well past it, actually). Whether it is importing more people or birthing more babies, growing a population to increase tax revenue or support pensioners is inhumane. People are not economic drones. It’s really time we look at population growth with new eyes. That was last century’s prosperity strategy. This will be the century of sustainability.

    Dave Gardner
    Director of the documentary
    GrowthBusters: Hooked on Growth

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