Demographic Stagnation: US Population Growth Hits 80-Year Low

Last week, the Brookings Institution published a new report regarding population data from the US Census Bureau. The data showed population change estimates for the year ending in July 2018. Brookings said the national rate of population growth collapsed to its lowest level since 1937, "a result of declines in the number of births, gains in the number of deaths, and that the nation’s under age 18 population has declined since the 2010 census."

This new report comes after recent government data showed geographic mobility within the US is at historic lows. Some states —particularly in the Mountain West—are expanding at a quick rate, but approximately 20% of all states showed evidence of population losses over the last two years.

The aging American population (i.e., those pesky baby boomers) is the broader cause for the downward shift in demographic trends that could cripple the nation in the years and decades ahead.

A historic low for US population growth

The population growth rate of 0.62% for 2017-2018 is the lowest registered since the end of the Great Depression. While the nation’s growth rate has fluctuated through wars, economic upheavals, baby booms, and baby busts, the current rate reflects a further fall that has also registered below the Great Recession low in 2007-2009. 

"These downward growth trends initially reflected declines in immigration as well as lower natural increase (the excess of births over deaths) because the economy was down. But over the past few years, as immigration gained slight momentum, reduced natural increase was more responsible for the overall decline in population growth—as it dropped from 1.6 million in 2000-2001 to just above 1 million in 2017-2018. There were fewer births than in recent decades and more deaths than in earlier years," said Brookings.

The collapse in births could be a result of the millennial generation, who, are still coping with the Great Recession, due to high debt loads, could be putting marriage and children on hold.

Brookings said the long-term trajectory should yield fewer births as millennials progress in age, with proportionately fewer women in childbearing ages. The increase in deaths is more directly related to the nation’s aging population. 

"This leaves immigration as an ever-more-important contributor to national population growth. In 2001-2002, natural increase exceeded immigration by 50% and that was when immigration was slightly higher than this year (1.05 million vs 0.99 million). Because of the recent decline in natural increase, immigration now contributes nearly as much to population growth, and is projected to be the primary contributor to national population growth after 2030 as natural increase continues to decline. Thus immigration—its size and its attributes—will be an important contributor to the nation’s future population that is growing slowly and aging quickly," said Brookings.

The child population is declining both nationally and in 29 states

One consequence of declining births in tandem with an aging population is the slower growth of the nation’s younger population. The census data showed that between 2010 and 2018, the nation’s under-age 18 population declined by 780,000 (1%), while the adult population grew by 19.2 million (8%).

This alarming trend could have severe consequences regarding productivity in the economy, as a shortage of prime-age workers could develop into the early 2020s.

Geographical mobility hits a postwar low

In the "greatest economy ever," the one demographic indicator that would rise should be geographic mobility. However, the latest census data for 2017-2018 showed the percentage of Americans changing residence is at a 1950 low of 10.1%.

Most of this downturn is attributable to local (within-county) moves, which also registered a postwar low, and could represent millennials are “stuck in place." 

"But a new finding this year was the downward trend in inter-county and interstate migration—the types of moves that should accompany a rising labor market. Hence, the nation’s demographic stagnation appears with this indicator as well," said Brookings.

The nationwide population growth slowdown did not occur in all regions.

Two states, Nevada and Idaho, expanded by 2% between 2017 and 2018—continuing a recent boom in the Mountain West, which like other regions, had growth declines earlier in the decade. There were more than 14 states which grew by 1%.

The larger story since 2016 is the number of states which had a declining population: ten in 2016-2017 and nine in 2018, compared with only one or two earlier in the decade. These are states where current birth rates plus immigration could not counteract migration to other parts of the country. They include states like Wyoming, Alaska, and Hawaii in the West; Louisiana, Mississippi, and West Virginia in the South; and large urban states such as New York and Illinois—the latter losing population for the fifth consecutive year.

Brookings said as the natural increase drops, all states will heavily rely on migration from the rest of the US and or even other countries to fuel growth or stave off declines.

An aging, slow-growing future

Brookings said the latest census data should prepare the nation for an era of demographic stagnation and low growth. The most recent national growth rate of .62% is at 80-year lows. The rate is still higher than in countries like Germany, Italy, and Japan; it means that governments must budget more for an aging population.

The report concluded by stating there needs to be a more extensive discussion on US immigration policy because of the future contributions that immigrants will aid in the recovery of  America’s society and economy. Otherwise, if birth rates and immigration do not pick up, the US had not just peaked, but the empire is in terminal decline.

Looking ahead: The business environment of the 2020s will be more volatile and economic swings more extreme.

The collision of demographics, automation, and inequality will transform the nation into an unrecognizable America in the decades ahead. The great transformation is already underway.