Minnesotans For Sustainability©
Sustainable Society: A society that balances the environment, other life forms, and human interactions over an indefinite time period.
A Ponzi Problem:
In recent years, there has been much doomsaying about potentially falling population levels in the developed countries by people who are essentially ‘reverse-Malthusians’ —that is, they predict societal disaster if population does not continue to rise. Without an influx of immigration, the argument goes, the aging of existing population will cause an imbalance in the relative size of the non-working population versus the working population, that is, the so-called dependency ratio.
Dystopian visions of societies bankrupted by too many elders being supported by too few youngsters have been used to frighten people into accepting mass immigration as a necessary evil.
Take, for example, this pronouncement from a major national newspaper columnist:
But this attempt to justify mass immigration by playing on economic
insecurity is disingenuous, as a look at the numbers shows.
The demographic problem in the developed countries may very well be exaggerated
It is true that over the next fifty years, the population in many European countries will begin to drop off to a lower level. But the assumption that this shift will necessarily lead to severe disruption may be unwarranted:
While Europe may face a problem with a declining population, the United States does not. In some European countries, most notably Italy, rapid drops in population due to decreased fertility and low immigration rates may create a ‘pothole’ in the transition to a lower, more stable population. But the U.S. population is not going to drop or even level off. In fact, the U.S. will have a rapidly climbing population for the foreseeable future.
As the Alan Guttmacher Institute for population research pointed out:
In the next fifty years, the populations of
the United Kingdom, Germany, Italy, Europe alone, the European Union, Japan,
Russia, Bulgaria, Estonia, all will drop anywhere from 5 to 30 percent.5
In the United States, however, our population will grow by 25 percent.6 Clearly, the situation in the United States, where the Census Bureau projects the population will have increased 50 percent in the next 50 years and 100 percent in the next 100 years,7 is not comparable to the situation in other developed countries (the exception being Ireland, whose population will increase by one quarter over the next fifty years).
In fact, such is the inertia behind continued population growth in the United States, that we would still have a rising population without the added push of immigration. According to Census Bureau projections, even if the U.S. received zero migration for the next 100 years, the population would still be rising. Without adding any more people through immigration, the U.S. population, solely through the inertia of natural increase, would increase 20 percent over the next 50 years, and 38 percent over the next 100 years (see graph).
In the U.S., the argument that immigration is the perfect antidote to the "disease" of less population growth often takes the form of "the need to prop up the Social Security system." Since the on-going viability of the Social Security system is a topic about which many Americans are already insecure, it has become a useful cudgel for those who want to silence any opposition to the mass immigration created by present immigration law.
But there are much simpler and efficient ways of handling the Social Security situation than importing a million mostly poor immigrants a year into our society.
Take this suggestion from the trustees of the Social Security fund themselves:
The number that is used to justify the fears of a graying population is the dependency ratio. Despite all the hype about the unprecedentedly high dependency ratios that will result from the Baby Boomers entering old age, the reality is that in 2070 the dependency ratio will still be lower than it was in 1970.
The slight rise in the dependency ratio from 2000 through 2070 is not the issue; the change is minor, from .711 to .84. What is different is the split between the two components of the dependency ratio (the aged dependency ratio and the youth dependency ratio).
The change in the composition of the dependency ratio is a good thing, not a danger
Over the next 70 years, a much larger share of those who are ‘dependent’ will be over 64 rather than under 18, and that is a positive —not negative— development.
Only a very small portion of the under 18 population are financially independent. As a rule, children are nearly entirely dependent on their parents (or the American taxpayer) for support, food, lodging, and medical care. Youth also generate one of society heftiest expenses: education. In 1996, education alone constituted 29 percent of all state and local government expenditures. Thus, the cost of the dependent youth is much greater than the cost of the aged component; the principal cost of the aged is medical, and state and local governments spent only a tenth as much on all of healthcare as they do on education.
Those over 64, after all, are ‘dependent" only as part of a traditional definition. The reality is that people are not simply living longer, the vitality of their years has increased as well. Only a portion of 65 year olds are "dependent" on society; many continue to work or support themselves through their investments and savings. As people become healthier with each generation and with advances in medical science, it is reasonable to believe that people will remain productive much longer than they used to.
Given that older people will be healthier and more productive (and therefore less of a burden) than before while the young will be just as dependent (and expensive) as ever, the news that an increasing share of those in the dependency ratio will be older rather than younger should be viewed as a boon, not a burden.
The planned lift of the normal retirement aged is a reflection of this trend. By 2022, normal retirement age will be set at 67. This will reduce the aged dependency ratio (see graph, previous page). As a result, the total dependency ratio will have barely changed at all by 2070 (see graph above).
Furthermore, even if the dependency ratio (even just the aged dependency
ratio) were a concern, immigration would hardly be an effective response. While
immigration has important long-term effects on population growth, it does not
have a large impact on the age structure of the population. In other words,
having immigration doesn’t make a world of difference to the changing
According to the UN Population Division’s Projection Branch, without any immigration at all between 2000 and 2050, the aged dependency ratio in the U.S. in 2050 would be 0.389. But having high immigration like we have now will barely make any difference in lowering the dependency ratio; continuing under present immigration policy, the U.S. will still have an aged dependency ratio of .355 in 2050 —a difference of .034, which is only 8.7 percent.
This 8.7 percent difference hardly justifies high immigration as a ‘magic cure’ for the country’s dependency ratio.
This should not be surprising, given that, contrary to popular opinion, the
age structure of the foreign-born population is not substantially younger than
that of the overall population. In fact, if anything, the foreign-born aged
structure is skewed toward the older end of the spectrum (see graph).
In fact, simply changing the age of eligibility for Social Security (which effectively begins the ‘age of dependency’ in the United States) from 65 to 67 —a change which is already planned and anticipated by law— will reduce the aged dependency ratio in 2050 by .068. That change dwarfs any effect that immigration might have on the aged dependency ratio. Although eliminating all immigration would increase the aged dependency ratio in 2050 by 9 percent, just changing the dependency age to 67 will reduce it by 22 percent. In other words, we could ‘afford’ to reduce immigration to zero and still tame the aged dependency ratio by a slight shift in the age of eligibility.
Remember, the Social Security Act, with its eligibility age of 65, was passed in 1935, when life expectancy was 61.7 years. Life expectancy is now 76.4 (projected to increase to 77.4 by 2010). That’s an increase of 24 percent. Yet, in that time, Social Security’s eligibility age was not been raised correspondingly —or at all. The small rise in the age of eligibility is well within the bounds of the systems traditional functioning and makes a world of difference in the aged dependency ratio.
Given all this, it’s not surprising that the U.S. Census Bureau’s Population Projection Branch has rejected the idea that immigration is a useful tool for changing the dependency ratio:11
The long-term spread in the dependency ratio between high and low [immigration scenarios] appears comparatively modest, and changed very little over the last 70 years of the projection period. This is explained by the fact that many of the larger numbers of annual migrants entering under the high assumption have dependent children and ‘age out’ of the working life span during the period of the projections, thereby reducing the difference in the dependency ratio. The differences in population are indeed stark, with the high-migration assumption yielding nearly double the population produced by the low migration assumption in 2100. International migration may address a high dependency ratio decisively in the short term, yet is highly inefficient in reducing it over the longer term —especially if considerations of population scale, as well as age composition, are taken into account.12
Translation: immigrants get old, too, so they will simply make the problem that much larger when the time comes. Having high immigration like we have now doesn’t significantly change the age structure of the population, but it does significantly alter the overall size of the population (creating a whole different set of problems). As an expert on the demography of aging explains it:
Although the fruitlessness of such a scheme is patent, an illustration of its results is still worth making. It has been calculated that to maintain an aged dependency ratio similar to the present one, the United States would have to admit more and more immigrants every year, until the population in 2050 would be 607 million —that’s more than twice the present population and more than 50 percent larger than the population would be under present circumstances (see graph).
The graph above shows only the projection out to 2050; as in any Ponzi scheme, the numbers required to keep it going get exponentially larger with each year. This and any scheme dependent upon an ever-increasing population is headed for an eventual crash. All economies are based upon the stability of the natural environment that supports them and their members. Allowing population to lower itself and level off naturally is not "suicidal" as some have charged.
But economic policy that leads to population growth that erodes the environment that sustains both economy and society is suicidal:
1. Charles Krauthammer, "Immigrants are America’s Solution to ‘birth
dearth’," Washington Post, July 19, 1998.
Courtesy of FAIR.
The Federation for American Immigration Reform (FAIR)
Forum Series: "A Ponzi Problem: The U.S. Dependency Ratio, Social Security Solvency, and the False Panacea of Immigration", September 2000.
See at < http://www.fairus.org/html/publications.html >.
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