Originally posted by Peter St. Onge on his substack:
Will humans go extinct?
In an interview last week Elon Musk was asked what keeps him up at night. His response was that crashing birth rates could destroy civilization.
Or even wipe out humanity.
Population Decline in Rich Countries
Elon noted that in some countries births are one third replacement level.
In Japan, for example, on average 4 grandparents yield a single grandchild.
In Korea, 100 Koreans will become just 8 great-grandchildren. As in a country shrinks to a single city.\
China is on track to lose 600 million people in a single lifetime — 5 times the population of Japan.
Europe’s not for behind; fertility rates for native-born Europeans are roundabout 1.3 — meaning you lose a third of your people every generation.
For native-born Italians or Spaniards it’s nearly half lost per generation. So much for Catholic families.
The US is similar to Europe; native-born fertility — of any race — is at a record-low 1.5 per couple.
So you lose a third of Americans per generation.
The collapse is now worldwide, including many countries you might not expect.
Fertility is now below replacement in nearly all of Latin America and East Asia. And half of the Middle East including Turkey and Iran doesn’t have enough kids to sustain their population.
What’s Driving the Collapse
- Kids don’t earn.
- They cost a lot thanks to inflation.
- And government pensions mean don’t need kids when you’re old.
So rather than kids helping on the farm — or in the family business — urbanization, union restrictions on teen employment, and the decline of small business left kids as pure cost.
College blows it out to more than $200,000 per kid.
Meanwhile, relentless inflation since the Fed was formed drove mothers into the workforce.
Meaning now the kids potentially cost a second salary. You’re forced onto a two-income treadmill.
Finally, government pensions replaced nature’s pension — kids — with a government check.
Throw in public schools that actively turn kids against their parents and many potential parents need kids in old age — nor feel they can rely on them.
Put it together and kids were financial assets in 1910 America. But today kids are financial costs — indeed, enormous costs.
What’s the solution?
Japan and Singapore give out thousands in baby bonuses that have been largely ineffective. Hungary just combined that with a lifelong income tax exemption for mothers that should work better.
Still, we’ve got 3 very good options to go after the root causes.
First is income: make it easier to work part-time — which is already happening — and to start a small business, which has been in free-fall in the West.
This lets women have a meaningful career with kids while the kids can start earning in their teens, whether its website design or mowing lawns.
Second is costs. Inflation and stagnant wages force parents into two-income careers. And unban the competency tests that used to do for free what college now does for a hundred grand.
Finally, pensions. Minimal government pensions force parents to have kids. This isn’t politically palatable, but it’s the truth. If parents fear growing old childless — as they have for thousands of years — they’ll do what it takes.
We can absolutely fix population decline. But it means ending the government policies that are driving it.
