In the US, the press has focused on student debt as a big impediment to household formation, typically a necessary but not sufficient condition for childrearing. We’ve pointed out a related obstacle, which is employment instability. Even if a young person manages to join the salaried class, as opposed to being stuck in the precariat, the average job tenure is 4.4 years. How can you make 17 plus year commitment to bringing up a child when you have no idea whether you’ll have the means to support yourself on a consistent basis, let alone your offspring?
It should be no surprise that that this week, the Center for Disease Control announced that for the first time in the US, women in their 30s were having more children than women in their 20s. While older parents are arguably more mature, and hopefully on a bit more solid footing financially, there was a lot of logic in the traditional norm of starting to have children young, as in the mother’s early to mid 20s. Younger people have more energy. It was a common lament at Goldman that men in their early 30s couldn’t handle the same level of sleep deprivation that they could eight to ten years earlier. And there is also evidence that younger parents have healthier babies, although the real break in outcomes seems to start around 40 (for instance, the odds of a Downs Syndrome baby rises markedly when the mother is over 40).
MacroBusiness describes a third impediment, which is particularly binding in the Australian context and relevant here: the cost of housing.
By Leith van Onselen, who has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs. You can follow him on Twitter at MacroBusiness
Earlier this week, The ABC published a report arguing that childless couples will be Australia’s most common family type by 2023:
One sociologist says the trend is already happening, and future government policy will determine whether the traditional family model continues to exist.
For many millennials… changing financial and social realities are important factors in the choice to have kids.
…couples [are] delaying their decision to extend their families, a trend which paired with Australia’s ageing population means the nuclear family is in decline.
The Australian Bureau of Statistics estimates between 2023 and 2029, there will be more people in a relationship living without children than families with kids…
University of Melbourne sociologist Leah Ruppanner said while the trend of not having children varies between countries, it is already happening in Australia…
Bronwyn Harman of Edith Cowan University, who studies social responses to childless couples, said the public has become more accepting of non-traditional families…
She expects the 2016 Census data, which has not been fully released yet, will show an increase in households without children.
This was followed by another article bemoaning the fact that more and more children are continuing to live with their parents well into adulthood. From The Daily Telegraph:
Get used to that childhood bedroom, you’ll be there for the next 40 years. Every week the great Australian dream seems to slip further away…
Sure they might go to uni but their industry of choice will probably change more rapidly than their qualification, which will have a hefty student debt attached anyway. Children are already priced out of the communities in which they grew up.
…a 2017 Perceptions of Housing Affordability report by property analytics and information company CoreLogic RP Data confirms the “great Australian dream of home ownership” as “an insurmountable challenge”.
“A growing proportion of younger generations, while overwhelmingly maintaining a sustained appetite to live the dream, are staying home with parents — increasingly into their 30s — to save for deposits,” it says in doom-laden pages.
“It captures the degree to which parents are being expected to assist their adult children in either saving for — or paying for — a home, and reveals how families with low incomes and or young children are becoming more vulnerable to mortgage stress”…
The empty nest is the forever nest. Youth see low wage growth and being locked out of buying a home. The family dynamic is changing and from an independence point of view, that is bad news for everyone.
The above articles should hardly be a surprise to anyone, given Australia’s politico-housing complex has deliberately engineered expensive housing via the combination of:
- Egregious tax breaks like negative gearing, the capital gains tax discount on investment properties, and the excessive taxation of deposits;
- Mass immigration;
- Restrictions on fringe land supply and planning; and
- Inadequate infrastructure investment.
To the above flawed housing policies you can also add increasing higher education costs (and debts), as well as poor labour opportunities for young people.
Since the GFC, overall youth employment has fallen by 3.6% in trend terms, despite the 6.9% lift in the youth population over this time, with full-time jobs down an incredible 21.2%. By contrast, the overall number of jobs for the rest of the labour force has risen by 15.3%, with full-time employment up 10.7% (see below table).
Youth underemployment was also at an all-time high 17.7% as at February (see next chart).
The fact is, young people need financial stability – and preferably a roof over the own heads – before they even contemplate having children. However, with one of the world’s most expensive housing markets, disappearing full-time jobs, and rising university debts, such stability is become rarer in Australia, so it’s no wonder couples are delaying (or choosing to go without) having children.
The saddest part is that policymakers’ likely response will be to ramp-up immigration even further in order to inject younger workers into the economy and ‘solve’ the fake ageing population problem (even though immigration is totally ineffective in this regard). In turn, increased mass immigration will further raise housing costs, as well as boost competition for jobs and lower wages. It will make the whole problem of Aussies not having kids and staying at home even worse.
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ditto for Singapore…
Expensive housing and rents, like Manhattan (NYC) but without the buzz…
Now 70, I’m old enough to remember justifying my intended marriage at 22, by arguing that I’d soon be too old to be a parent if I waited much longer and that many of my female friends had already married and were well on their way to having families. Their husbands had begun work after graduating high school and had a good job with good prospects of a lifetime of work. Nowadays, of course, I laugh at my naive beliefs, especially when my own two sons are faced with poor jobs prospects, poor prospects of owning any home bought by their own labours, and the need for two income families merely to have shelter and food. Through good fortune I’ve managed to gain some property to leave to them but without income and with despair of success they will probably be forced to sell anything I can give them. Within such a social construct many of my neighbours and others also worry constantly about their own children. I am often tempted to apologize for fathering my sons.
By the bye, watch the Dr. Who episode entitled “Oxygen” (broadcast May14,2017) for a surprising critique of neowhatever. I live in a mining community so it hit home.
(and on a kid’s show! What is the world coming to?)
“We’re fighting the suits!”
I was pleasantly surprised myself. At first I thought, space zombies, really? But it’s a great episode. A critique of hyper-mechanization and capitalism in a sci-fi setting. What’s not to like?
Between rising housing prices and STEEPLY rising levels of student loan debt, it seems that American society is becoming ever more hostile to younger people wanting to have children. By the time you’ve paid off your student loans and saved up a down payment for an overpriced house, you’re well into your thirties and are already dealing with declining fertility and energy levels. [The latter is particularly true for women, many of whom will have already seen two-thirds of their potential child-bearing years go by before their lives permit them to responsibly have kids.]
I sometimes wonder if this is on purpose. Ad hoc population control through excess debt?
‘Ad hoc population control through excess debt?’
incompetence and greed, not malice, is generally the best explanation. https://en.wikipedia.org/wiki/Hanlon%27s_razor
as if an aim is population control, ‘the powers that be’ are doing an incompetent job as the most optimistic projections have the world’s population stabilizing at 10-ish billion from the current 7+ billion—pretty much all in the developing world.
most of the developed world has stablized at the flat-line (if you exclude fertility of non-native women).
Ha hah! I regularly quote Hanlon’s Razor to other people, and now somebody’s done it to me!
And normally, I believe it. In political debates, I always try to use Hanlon’s Razor and assume that people with whom I disagree are working from bad assumptions or faulty logic, rather than the more malicious motives I frequently see ascribed to people.
But sometimes the incompetence out there gets so bad that it brings out cynic in me. And in extreme cases, even the conspiracy theorist can pop out. [And yes, today’s student loan situation is that extreme.]
Thanks for the reminder, oho.
They’re not just doing an incompetent job of population control outside of the U.S., they’re also failing inside the United States.
3,978,497 births in 2015: https://www.cdc.gov/nchs/data/nvsr/nvsr66/nvsr66_01.pdf
2,712,630 deaths in 2015: https://www.cdc.gov/nchs/products/databriefs/db267.htm
Births minus deaths equals an increase of 1,265,867 people. The U.S. population increase was about double that during 2015 because of immigration, but that is a somewhat separate topic. The point is that Americans continue to produce lots of children.
Although I object to the relatively high birth rate in the United States, I agree that housing costs are excessive and unfair.
Death rates are a lagging indicator?
Anyways, take a look at fertility rate for the US. It’s been dropping since 2007. We’re below the rate where it needs to be to be sustaining, which I think is like 2.1 or something like that. Not as bad as Japan (see my comment further below), but still not a good trend.
We need a lower fertility rate. Population growth continues for two or three generations after the birth rate drops below the replacement rate. It’s known as demographic momentum.
You object to the relatively high birth rate in the United States? I am curious what the specific objections might be. I respect an individual desire for no children or just one or just two, but the aggregate rate is just the aggregate decisions of millions of Americans.
How about incompetent and greedy malice? Outcomes seem to have a fat tail biased toward bad outcomes. Good outcomes seem rare. I believe that argues for the influence of malice. The incompetence explains why sometimes the powers that be shoot themselves in the foot too.
I haven’t read Goethe’s “The Sorrows of Young Werther” but I do wonder at taking advice from a character described as “Young” Werther.
I don’t think the problem is incompetence; I think the elites just don’t care, as long as they are doing well in the short term. At the end of the day the public needs to mobilize to promote its interests. How likely are the 1% to do that? This blog helps with that effort.
Wanting to have children also seems utterly exhausting, working full time or more, commuting the usual long commutes, and having kids. Where is the time for this? Obviously one sacrifices all time for anything else and even then.
Even thinking of it makes me want to go to sleep for a month. It seems a crazy path. And for what? To make more cogs to be used up and spit out by the death machine that is this economic system. Breeding in captivity.
If there’s any ‘plan’ I imagine our overlords want us to have children — it’s the surest way to lock people into the rat race of work, consumption, insurance payments and massive debt through overinflated housing prices and college tuition.
The single and/or childless have more options to escape. Once you have a spouse and kids in tow you need a house not just a room, you need furniture and appliances, multiple cars/minivans/SUVs, health insurance for everyone and life insurance — you’re locked into overpaying for all that stuff considered ‘essential’ for a middle class family.
Maybe they prefer immigrants. They provide a workforce divided by race, religion and culture. Even in the US class based policies are almost impossible and even no-brainer policies like universal healthcare are difficult.
Replacing the natives with immigrants also allows you to have wages lower than what is required for the labour to reproduce itself.
High housing costs… a clever way towards slowing climate change? Matches the link from yesterday on that Vox article about the book on climate change. Fewer people will led to less climate change.
But the population continues to grow, so the housing costs are not slowing climate change in any tangible way.
Well the good [sic] news is that since a larger carbon footprint is strongly related to increased income levels, by implementing decades of neoliberal policies that directly decrease median household wealth and turn much of the former middle class into a third-world precariat, our Acela Overlords are innovatively and disruptively working toward solving the problem.
This is why the top 15% need to zip around in jet planes and cram their ecofriendly houses full of crap shipped from around the globe– because they’re busy solving the problem for the rest of us.
I don’t think that most people in the top 15% do much flying. When they do, most of them are crammed into narrow seats with insufficient legroom, and they are at risk of being expelled from the flight because of overbooking. Perhaps it would make more sense to refer to the top 2% or the top 3% in this context.
I don’t know I suspect they do. I despise in many ways well paid white collar types (because I can pass among them), and they fly a lot for vacations. Entitled clueless people for the most part. But they are not those actually running the world.
Well, Gallup indicates that 52% of US respondents said they had flown on a plane over the last 12 months. This number would obviously be much lower globally than in just the US, but 3% is clearly far too low. In my own neighbourhood only a handful of the thousands of families have ever traveled by air. And by way of example, when Aerolineas Argentinas was re-nationalised, the company offered free trips to people who had never flown before in their entire lives, and the demand was overwhelming.
By contrast, my own personal experience in the US is that even the top 15% live a lifestyle that is far more carbon/resource intensive than the rest of the world: with much more personal auto and plane travel (regardless of being transported in miserable conditions in coach), in addition to generally purchasing products that are far more likely to have been shipped over longer distances.
This is exactly why it is morally rancid for those of us in the top 15%, with our larger carbon footprints and appalling excess consumption, to be lecturing the bottom 85% about birth control.
As I have pointed out on several occasions, both the population and the birth rate in the prosperous United States is too high.
One of the causes of poverty in the Third World is overpopulation. There’s nothing morally rancid about trying to help people to eliminate poverty by reducing their birth rate. In fact, it is morally rancid to fail to recommend a reduction in the birth rate.
I looked more closely at your Gallup link, and I don’t see where it says that 52% have flown in the past year. I see that 55% have not flown, 25% flew one or two trips, and 19% flew three or more. It’s also not clear to me what the sample is for this survey. Is it adjusted to match the entire population, or is it just adults, many of whom will be flying for business.
Anyhow, I wouldn’t agree that if a person flies once per year that he is “zip[ping] around in jet planes”. That makes it seem as though he’s using a private jet.
I acknowledge that my estimate of 2% to 3% was too low, but I think that’s probably quite close to the truth for the number of people who fly frequently.
You’re right, I quoted the 2012 rate of 52% when the newer 2015 survey showed 45%. My bad, but it seems we both agree that a disproportionate number of people in the US fly by plane, whereas that is not the case for most people on the planet– especially the vast majority with less wealth. In all, however, this is just a minor part of the larger point I made: that the top ~15% in net worth use an obscene portion of the planet’s resources. Instead pointing the blame cannons at the poorer ~85%’s genitals is not the place to start, or perhaps even end.
Secondly, with regard to “trying to help people to eliminate poverty by reducing their birth rate”, there is definitely a correlation between poverty and high birth rates (as can be seen incidentally by the fact that higher birthrates are more common amongst those with lower incomes in the US), but even after watching you argue this same point here for years, I still have yet to see you produce proof of causation.
Lastly, just a question: when you say “the prosperous United States” do you mean the prosperous portion of the United States or that the country is entirely prosperous when compared to most of the world?
Sorry, I don’t have proof, just common sense. A family with 6 children will need to spend a lot more to care for their children than a family with 2 children. If they have equal incomes, the family with 6 children will be significantly more likely to be in poverty.
Regarding the prosperous United States: I didn’t consider your distinction when I wrote. Probably either would apply. Here’s a weird short article about competitive birthing from 10 years ago. In this case, it’s rich people who are having too many children.
http://www.npr.org/templates/story/story.php?storyId=12513004
But the total fertility rate in the United States is 2.1, which is much higher than in Europe, and that rate applies to the country as a whole. As I commented elsewhere on this page, a nation’s population will continue to rise for generations after achieving a replacement birth rate:
https://en.wikipedia.org/wiki/Demographic_momentum
This is where I turn off: “Sorry, I don’t have proof, just common sense.”
And I find those who claim “overpupulation!” – always looking at someone else, or congratulating themselves on not having the “burden” of children – only worth taking seriously when they get really serious. Like setting an example for us all…
All right, show me proof for your position. Prove to me that poor families with large numbers of children are more prosperous than poor families with small numbers of children. Explain how population growth reduces air and water pollution, and provide proof. Tell me about how good life is in the densely packed low income neighborhoods of the world’s mega-cities.
1.86.
Still, the fact that the US fertility is so much higherthan European, should be a pretty strong indication that economics is not that important for fertility rates. Most of Europe does not have the same issues with expensive education and healthcare.
As a mid-30s first time father to be, the other big time factor for us in deciding: future cost of college.
Cost of daycare also an issue, but mostly in terms of would we need to space out children to meet cash flow needs.
Yup. This is definitely a concern for many people I know.
Relatively older women are also more at risk from complications to themselves in pregnancy that younger ones. Having a problematic pregnancy, a child with developmental issues, or a combination of both can discourage having future kids, in addition to the narrowing window of opportunity.
I don’t think it’s a great idea to have kids young (if one chooses to have them at all that is). Lack of psychological maturity. That means one is more likely to pass down whatever deficiencies one’s own parenting had just because of lack of the wisdom and having gained perspective on where one came from. It’s better to have them when one has worked out at least some of the damage of one’s own childhood (yea if one waited to work it all out they might be at least 40, but maybe there is a happy medium)
It’s a tradeoff. Fertility declines exponentially after 30. Presumably in the past aunts and grandmothers were around to lend a hand to younger mothers.
Because no man in history has ever been seen near a fucking baby right??
A lot people don’t live long enough to work out all their childhood damage :-)
I wouldn’t be surprised that the uber wealthy that control this world, want global governance and population control view this as a happy byproduct of all their rackets. Use fiat money in banks you control and regulations issued by gov’ts you control to inflate inelastic goods related to families like housing, education and healthcare. The oligarchs collects their rents while people who actually produce, innovate, feed, care and defend them bear the costs. When will society views these elites as fascists on a morally equivalent level with the tyrants of the past?
As Micheal Hudson says, “all your money are belong to us”. (With apologies to Mr Hudson as he gives a more eloquent treatment :-))
According to the BBC documentary “How Many People Can Live on Planet Earth?”, the carrying capacity is 1.5B. As of 31 Dec 14, we were at 7.21B. That’s some pretty horrifying math.
If we had had the kind of species-level awareness and ability to act that would’ve prevented catastrophic overpopulation, I’d be more sanguine about our ability to prevent catastrophic climate change.
The momentum of individual-level decisions has already shot us well over the edge of the cliff. We’re living in a long, drawn out Wile E. Coyote moment.
https://youtu.be/_d8ROhH3_vs
Given the lifestyle choices of many “green” celebrities, it’s looking like the future = consumption + CO2 offsets for the private/commerical jet for the 1%, austerity for thee.
I suppose that in the name all of all important economy the argument is that the dual-income household is more efficient in working and therefore it makes sense to outsource the non-core function of child-rearing activities. GDP increases with the current policies and that is all that counts, right? :-(
I suppose that is just the way it is, some is to work while others are to procreate and nothing can be done to balance it out. Both is not an option so young ones has to choose (responsibly…..) and the responsible choice is to work……
The next logical step in the pursuit of economic effectiveness (economies of scale and specialisation) might be the ‘rent-a-womb’.
Surrogate mothers are already a thing.
The cost of homes is one thing. I counsel my 22 and 25 year-old kids that the combination of wealth/income inequality, job insecurity and–most importantly– climate change may lead our species toward civil unrest, disease and perhaps another global war. Our progress in technology isn’t going hand in hand with humanity. It’s painful to know that my kids and their generation will have to live in this mess. I can’t imagine the pain they would feel for their future children if we exceed (or already have exceeded?) a tipping point on climate change.
+1000
I’m in that early 30’s age cohort and the 60+ hour weeks I put in at work actually hurt now whereas when I started my career they were a non-issue.
We’re turning Japanese. Their fertility rate started dropping in 1974. But that was before their lost decade.
Interesting treatment on the roots of that shift in Italy and Japan: How Similar Are They?: A Comparative Analysis of Politics, Economics, and International Relations. Below are two snippets from page 38; interesting to scroll backwards and forward from there. Interesting in that it suggests at least for Japan that part of this malaise in fertility rate was economically driven (by the oil panic which Japan would be vulnerable to), but also by the intellectual mood there. Seems they aligned back in 1974. I can imagine that in subsequent years the intellectual mood prevailed in boom years and then the economic drivers prevailed during bust (lost decade) years.
Can you or Lambert please do Mirabile Dictu style articles more often?
The “what a surprise” articles are mostly negative, and I think some “wonderful to say” stuff would be cool ?
My sons were born in the early 90s, here in Australia, and are just starting their working lives in Sydney and Canberra. Their existence was a byproduct of what seemed the normal thing for men with a job and good prospects in my part of the world – that marriage, house, children thingy.
Climate change, declining incomes, student debt… all were in the future, a future that looked to be better in every way.
Today, when the very future of the planet looks uncertain, and, you are priced out of the communities you grew up in and can’t find the same sort of work as your parents were able to in their time.
So, of course we are not surprised (at least not here or on Macrobusiness), but it is more than pricey housing and a tough job market. The risk that my children, and me, may not live a full life, is very real.
A few days ago there was this article about some millionaire saying millennials cant afford houses because they spend too much on coffee and avocadoes…
The rich just don’t get it.
It’s not in their interest to get it. It’s in their interest to try to shift all the blame onto the powerless.
Capitalist Darwinism at its finest. Perhaps the easiest solution for the 10% or so who can flourish in this economic climate is to simply kill off and impede the offspring of the remaining 90 and replace them with machines – if they will not accept a life of indentured corporate servitude.
Of course, indentured servants were usually granted freedom or even land (gasp!) at the end of their service, so perhaps I’m being too kind.
Slavery. The word you’re looking for is Slavery. Just like old times, but in the future.
So the plan is to keep bombing countries or miring what have been labeld “developing nations” in debt to force mass migration? Because with the homelands of refugees/migrants/immigrants turned to crap, even the lotto we call “the American (Western?) Dream” will be an improvement. Ta-Da…no reform needed.
fewer kids is good
how else to stem the tide of overpopulation destroying earth?
Pat yourself on the back, and here is your Medal for Unthinking Defences of Capitalism.
In the U.S. the response will simply be “get off my lawn” and blame younger workers for being lazy or entitled rather than confronting the fact that housing prices have been rising faster than wages.
Restrictions on zoning and land use definitely play a role. While I won’t go as far as to say we should get rid of zoning laws completely, it has definitely gotten out of control. It’s gotten to the point where it virtually impossible to build anything other than single-family homes.
Few dispute the need to build more housing but doing so means density in a lot of parts of the country–there isn’t enough land for everyone to have a single family home–but unfortunately density has become a four letter word. The moment anyone tries to build multifamily housing, even if it’s market rate, pitchforks come with people screaming about how a new development is going to hurt their property values. These same people complain about how their property taxes are going up–property taxes are linked to property values so if your property values increase, so do your taxes. You can’t have it both ways here people.
Maybe it’s time for counties or states to pre-empt local ordinances and ban minimum-lot sizes, or at least drastically reduce them, and prohibit cities from banning everything other than single-family units. While we’re at get rid of the Mortgage-Interest-Deducition, or if you’re going to allow it all limit it to one home in your lifetime, preferably with with a cap: i.e. you can only claim it up to a certain amount. The Mortgage Interest Deduction, in it’s current form, creates some perverse incentives.
None of these things are an easy sell politically and there is not guarantee that even if all of these changes were enacted it would completely solve the affordability problem. However, on some level something eventually has to give. If something doesn’t narrow the mismatch between wages and the cost of living–this problem isn’t limited to the high-cost areas like San Francisco and New York–multigenerational households may become the new normal.
Any intelligent person would have realised this deleterious effect a long time ago. Financialising an essential commodity into a get rich ponzi scam was always bound to undermine the essential funcitions of housing.
.
lol that’s “functions” not “fun-[ky]-tons”, though it probably undermines that too in the long run.