Sunday, 7 April 2013

On declining birthrates and the consequences

Those of you in the United States who have read my articles on this blog would not think that I have much in common with the American talk show host Rush Limbaugh.

Those of you who live in Germany who have read my blog would not imagine that I have an awful lot in common with the Chancellor, Angela Merkel.

One thing does though connect the three of us.

None of us have any children.

You can make what you like of Mr Limbaugh's rowdy pontificating on abortion and the like. What I have heard of his opinions makes me glad that I am not too often impacted by his intolerant views. I wonder what it would be like if his current wife had a child, and in 16 years time Mr Limbaugh came home one day from his job and found his offspring snorting cocaine on the settee with a few friends. And got the usual anti-parental stuff that you often get from adolescents.

OK, not my business, stay away from it. Move on.

Frau Merkel meanwhile in her role of mother of the nation is stuck with a situation where she has to persuade families in Germany to have more children - which cannot be easy given the fact that she has none herself. Aren't children wonderful? Hmmmm.

The German birthrate currently stands at 1.36 per family. The current population of 82 million is seen as shrinking to 65 million by 2050. The percentage of people over 60 is currently at a record high and is likely to stay that way for some time to come.

The impact upon the workforce ought to be severe. Not that in the short-term you would notice. With unemployment standing at around 3 million officially (and I read a seditious piece the other week which suggested that this is a government fudge, and the actual figure is somewhere between 7 and 8 million - 12% rather than 5.5%) there are still more than enough people to fill the vacancies that far too rarely appear.

As the population grows older you would imagine that making employment more readily available for older people and raising the retirement age for people who are fit and healthy and want to work would make sense.

This week some government posters have started appearing around Frankfurt (so I would imagine around the rest of Germany) encouraging employers to take on older workers. For not unselfish reasons I hope that this has the desired impact. White-collar workers particularly are liable to be just as productive as they get older as they ever were. Ageism is unacceptable, and in a healthy job market (cough, splutter) ought not to be a factor - but it is, as much as the denials come from the commercial world suggesting the contrary.

Down the road though the problems will increase. Tax revenues will be impacted, public and private insurance companies will find that they have to pay out more for health care for an increasing number of elderly people while having fewer active contributors, properties will start to empty or be subject to inefficient usage (compare heating costs in relationship to the people requiring them). And so on and so forth.   

The answer to the problems in the past when there were jobs to be filled and the locals were not interested was to bring in immigrant labour. Assuming a boom in the economy (cough, splutter - where are Adenauer and Erhard when we need them?) this could well happen.

With the Schengen Agreement in Europe the possibilities for that already exist. Last year the largest number of immigrants in terms of numbers came not as feared from the Muslim world (with all the potential fanatics usw - excuse the momentary paranoia), but from Poland. The largest percentage increase last year came from (surprise, surprise) Greece and Spain.

Here though as elsewhere in Europe immigration is a touchy subject. Immigration is something of a dirty word (although - see the paragraph above - falsely assumed to mean immigration from outside the continent and all the fears of Islamisation usw). People have also to be integrated according to government expectations. German will still be expected to be the lingua franca, for example.

And then there is the point that internal EU immigration may only be a short-term solution. While Germany is on the extreme with its low birth rate, the figures for the rest of Europe are not that much better. According to the Daily Mail (not my favourite UK media outlet, but not one given to deliberately falsifying the stats) the UK had the highest birthrate in Europe last year. The figure given was 1.91.

Which is still conducive to seeing a rise in the age of the population. There will still be more older people than people in the workforce in 20 years time at that rate. Getting back to 2.3 would be desirable.

So even Conservative governments in Europe are indulging their fantasies by offering incentives to people to have more children. The problem in the words of the old proverb being that you can lead a horse to water, but you cannot make it drink.

Both major political groupings in Germany are trying to push legislation to improve the situation. Children-friendly legislation usw. The trouble being that there has been a ton of this stuff out there for many years already. The bait is out there, but the fact of the matter is that the population at large is not biting. There are all sorts of reasons, but economics plays a big part. You might not imagine that the world's fourth largest economy (with the world's second highest number of millionaires in per capita terms) was feeling the pinch, but that seems to be the story.

The 2008 crisis may not have bitten quite so hard here, but it did hit. There are some other quite scary stats - like the one suggesting that 1 in 6 children currently live in households which fall below the official poverty line. If more children are born, won't that get worse?

And then there is the sense that unemployment is actually a lot worse, or just round the corner, or that underemployment is disguising the real situation.

Is this a world into which to bring children?

Until the economy picks up and there is a sense of financial security out there (in which case the Neo-Liberal nonsense and all the attached insecurity better be booted out and replaced with summat along the lines of the Adenauer-Erhard model), I cannot see things changing. In fact it would not surprise me at all if that 1.36 actually fell below 1.3 before long if things don't improve.

Postscript for those interested - why didn't I have children? I will give you the answer some other time!

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