Demographic unintended consequences?

Last updated on: June 28, 2014 at 8:42 pm by Jane the Actuary

Demographic unintended consequences? 2014-06-28T20:42:00-06:00 Jane the Actuary

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What follows is thoroughly unsourced in its key points, but still, something I was thinking about:

The United States is becoming heavily Hispanic, and we’re told that the newcomers are key to staving off the demographic crisis of too many old people and a low TFR (total fertility rate) among native-born Americans, both simply by importing more people and by having higher-than-average birthrates. See an old post citing a book which split out the TFR between native-born and immigrant women, 2.0 vs. 2.6, and a more recent post, with more recent data from the World Bank, which cites the current TFR as 1.88. This compares, for instance, to 2.2 in Mexico, 3.1 in Honduras, and 3.8 in Guatemala. And, indeed, immigration has kept the U.S. population growing 1% a year or so despite below-replacement birthrates, according to the same World Bank data.

Of course, it’s not enough to have an influx of young bodies — if the immigrants are unskilled and uneducated (and if their children are less likely to be educated due to lack of family support), how will they be able to replace their skilled and educated predecessors? And if we don’t have a new generation that’s as educated as their predecessors, then how can the American economy sustain itself at current levels? GDP isn’t merely about population numbers. And it isn’t about natural resources, or simply keeping existing infrastructure and businesses humming along — if the residents of the United States 25 or 50 or 100 years from now aren’t as educated as today (and don’t start on “these kids today” being in need of remedial classes in college or the like — we Americans as a nation are far more educated than the bulk of would-be immigrants), then how can our country continue to thrive? And certainly, then, the notion of these immigrants supporting our elderly becomes foolish.

Which is all true regardless of what ethnicity the newcomers and the native-born residents are.

But let’s recognize a further reality. If the number of newcomers reaches a critical mass, and if they are of a different ethnicity than the native-born, and they perceive themselves as such, as more different than alike, what will happen when difficult budget decisions need to be made? When decisions need to be made about healthcare spending for the elderly and education spending for the young, who wins? True, the elderly have historically won the day due to their higher voter turn-out, and the old-vs.-young battle has played itself out in terms of education funding as much by segregation, with the elderly congregating in seniors-only Sun Cities, as in tax battles. But we will soon be facing serious battles over Medicare funding, and the nursing-home component of Medicaid, as well as Social Security. And part of the calculus has always been that the elderly are our parents and grandparents — but that won’t be true for immigrants. And our immigrants are not coming from cultures with a strong emphasis on honoring the elderly, either, so far as I know.

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