If you want to see the future, you will need to look at demographics and geography. These two topics tend to allow you to look into the future. So when the Wall Street Journal prints “U.S. Fertility Rate Falls to Record Low” followed by the subtitle “Fewer babies were born in the U.S. in 2023 than any year since 1979,” it’s worth thinking about this trend.
To replace the people we lose, you would need every woman to have 2.21 babies. The fertility number in 2023 was just 1.62. This is the lowest rate recorded since we started capturing these statistics. If you think this is bad, China’s fertility rate is a meager 1.
Generations as Percentage
The Greatest Generation: born before 1928: (2%)
The Silent Generation: born between 1928 - 1945 (5.49%)
The Baby Boomer: Born between 1946- 1964 (20.58%)
Generation X: born between 1965 - 1980 (19.61%) (arguably the greatest generation)
The Millennial Generation: born between 1981- 1996 (21.67%)
Generation Z: born between 1997 - 2012 (20.88%)
Generation Fertility Rates
The Silent Generation: 3-4 children
Baby Boomers: 2-3 This may be the last generation to have the 2.21 replacement rate.
Generation X: 1-2
Millennials: 1.6
Gen Z: Too early to tell.
I happen to have 3 Gen Z children, one boy, and twin girls. For as long as I can remember, all three claimed they would never have children. Some part of this decision is a response to global warming. But recently, both girls are changing their mind on the decision to have babies.
There are a number of reasons fertility numbers have fallen, including contraception, education and careers, economic factors, and less pressure to have large families. I can’t help but notice that 1979 was plagued by inflation and a poor economic time and low fertility. 2023 and 2024 seem to match the earlier low fertility rate. Whether women choose not to have children or whether there is an built in intuition about having a baby, it seems that this trend may go on for sometime.
The Economist reports that low birth rates make it challenging to support pensioners, higher taxes, later retirements, low real returns for savers, and possibly government budget crisis (which is already here).
My Take:
You can find this same trend across a large part of the world. I believe this demographic trend means less demand in the future as globalization wanes.
