Think of it like a mushroom. Up near the top, there’s a big, fat cap of Baby Boomers; down below, the stem is struggling to hold up under the weight.
USC’ Dowell Myers says The Day of Demographic Reckoning has come upon us. We share his thoughts because he's the lead researcher on a recently released report from the University of Southern California and the Lucile Packard Foundation, "California's Diminishing Resource: Children." Myers and his team analyzed data from the 2010 census and the American Community Survey to conclude that we're coming up on a rather large problem, economically speaking.
“It’s been sneaking up on us gradually, and it has finally arrived," Myers told The California Report. "The oldest Baby Boomer turned 65 last year, and now 18 years of Baby Boomers are going to cross that line."
In 1970, children made up more than one-third of California's population. By 2030, they're expected to account for just one-fifth. In 1970, California averaged 21 seniors for every 100 working-age adults. By 2030, that ratio is expected to rise to 36 seniors for every 100 working-age adults. Even if all of us with a mind to bear children were to get busy today in a mass effort to add to the population pool, we simply could not populate the state in time to offset the monster wave of retirees coming our way.
Instead, we’re actually having fewer children these days than we did 10 years ago. The state's birthrate fell to 1.94 children per woman in 2010. Replacement level would be 2.1 children.
“Why is that a problem?” you ask, parked in hellacious traffic on the 80 in Berkeley.
(Also, let's not forget a smaller population is desirable from an environmental perspective.)
Personally, Myers agrees. He would prefer a California population of, oh, around 20 million.
“The problem is, the people are already here, the people who are weighing us down, like myself: Baby Boomers. We’re not going away.”
The pool of retirees at any given time relies on the pool of working adults to pay the taxes that support the social safety net - and to buy the houses of Baby Boomers planning to finance their retirement in Palm Springs with the proceeds. If there aren’t enough buyers to keep real estate prices stratospheric, Myers says, “It isn’t going to look pretty for anybody.”
“Why is that a problem?” I asked him. After all, for Gen X and Yers who can hang on for a few years, a catastrophic drop in real estate prices might prove a real windfall. (Making a calendar note to myself here for 2023: buy home in choice neighborhood.) But then Myers and his cohort wouldn't be able to finance their retirement in Palm Springs. He might show up at my door wanting to move in.
You might think we could reasonably expect to offset the demographic gap with in-migration. I have a friend in New Jersey who's thinking of doing it within the next five years. Between Silicon Valley, Hollywood, organic salad greens, shale oil and who knows what New New Economic Driver drives the economy a decade from now, surely we’ll draw enough new talent to come out on top?
Not likely, Myers says. It would take an awful lot of people coming here sooner rather than later to offset the dropping birthrate.
Ixnay on the Baby Bump strategy. Ixnay on the Import Our Workforce strategy. Final pitch: make Baby Boomers keep working. As it is, many Californians are already working in some capacity past 55 or 65 or whatever we used to think of as the Typical Retirement Date. There again, Myers is dour on the aggregate possibilities.
So what does Myers suggest? He recommends we immediately restore our commitment to educating our children as if they were going to be the workforce of the future, as opposed to potential prison inmates. Budget troubles or no, Myers calls the cuts to education in California penny wise and pound foolish.
"The bulk of our workforce, our projections show, are going to be homegrown Californians. We sure better put them all to work at really high capacity."
That means more Californians need to get college degrees. Myers is not alone in that assessment. Those who look to the far horizon warn California will require more people with bachelors degrees than we are producing at present. Otherwise, we have a huge group of people in no position to support themselves, let alone anybody else.