The population of the United States could shrink for the first time on record due to a combination of COVID-19 deaths, low birth rates, and immigration restrictions, experts told The Wall Street Journal.
Early estimates from demographers show that the US population grew by just 0.35% in the year that ended on July 1, 2021.
Demographers told The Wall Street Journal that they estimate grown could remain nearly flat for this upcoming year as well, or could even shrink for the first the first time.
The US population growth rate has been decreasing since the 2007-08 financial crisis, the Journal reported. Slowing population growth or even a decline could affect the US labor market and may cause the nation’s economy to suffer.
A ‘baby bust’
American women have put off having kids during the pandemic, leading to a “baby bust.” The US birth rate fell by 4% in 2020, the sharpest decline in nearly 50 years, per CDC data from May. It’s intensified a pre-pandemic trend of decreasing birth rates and fertility rates as women delayed childbearing until a later age.
The baby bust is due to a combination of factors, including a rise in individualism and autonomy for women, macroeconomic forces that millennials have had to contend with, and a recession, which typically have the strongest economic influence on birth and fertility rates.
While demographers are currently debating whether the current drop will prove to be a temporary or permanent phenomenon, a recent Brookings report forecasts that the birth rate is unlikely to bounce back.
It’s sparked worries that the US may be headed for what’s known as a “demographic time bomb,” in which an aging population isn’t replaced by enough young workers.
This could slow the economy in the long term by creating higher government costs and a smaller workforce, who will have to front the care costs for aging populations. It could also create a shortage of pension and social security-type funds and impact things like school enrollment and college demand.
Japan is a famous example of just such a time bomb, long ticking demographically. Experts in that country are now worried that a pandemic-fueled baby bust could worsen the country’s aging crisis that strains the working population. Like Japan, Italy is facing an aging population and dropping fertility rates, to the point where the government has begun issuing fertility ads.
High levels of immigration have so far kept the US from seeing the same economic impact that has hit these other countries, but current immigration restrictions could pose a threat to this.
But Christine Percheski, associate professor of sociology at Northwestern University, previously told Insider that a decline in births isn’t necessarily bad – it will just require structural adjustments, like creating new public policies that respond to changes in population size.
In some ways, fewer classmates for those born in 2021 could be good, she added. “If there are fewer people competing for jobs when they hit the job market, that’s not bad from their perspective, but it does require us to make adjustments.”
But although a declining birth rate will mark an economic shift, it doesn’t have to mean devastation for the economy if we respond to it with proper measures.
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