Mother’s Day Economics
Sunday is Mothers Day, but troubling economic news makes it difficult to celebrate motherhood this holiday. There are too few mothers! The most recent alarming news: Teen birth rates in the U.S. are dropping precipitously.
“Fewer Babies Having Babies” proclaimed the Newsweek headline last week. According to the Center for Disease Control, teen births declined over 40% from 2006 to 2014. Some might think this is good news. Teens, and their parents, come to mind. After all, teens are ill prepared to become parents, and unplanned pregnancies often lead to an unexpected round two of parenthood for ambushed grandparents. For teens, parenthood interferes with attending submarine races, prom night, and finishing school, not to mention Spring break in Fort Lauderdale.
Economists, however, have more important metrics for success. Not so interested in the quality of teen life, they know the score when it comes to computing ROI (return on investment) for babies. Fewer teen pregnancies translates into a drag on GDP growth, which we all know is the Holy Grail. That is the number one public policy goal worldwide.
For a quick primer on why it’s so important for babymaking to be booming, read the May 7, 2014 CBS News story, Dropping Birth Rates Threaten Global Economic Growth, or last September’s Wall Street Journal opinion piece, How the Birth Dearth Saps Economic Growth. A quick Google search will reveal countless other examples. In the WSJ, Ruchir Sharma informs us:
“This collapse (in birth rate) is seriously undermining potential economic growth….”
You see, increasing economic throughput requires each worker to be more productive, or for us to have more workers. Sharma, the head of emerging markets and global macro at Morgan Stanley Investment Management commented on the 4% annual GDP growth promised by some GOP presidential candidates (back when they WERE candidates):
“…with the U.S. working-age population growing only about 0.5% a year, hitting that target would require boosting trend productivity growth to around 3.5%—a rate never achieved in the postwar era.”
This just leaves us with adding workers. That’s the message economists have been trying to deliver ever since the late American Enterprise Institute Fellow Ben Wattenberg pumped out The Birth Dearth in 1987. Global average fertility has dropped nearly 50% over the last 4 decades. Declining birth rates worldwide represent a serious threat to economic growth.
Even before birth, each new human being boosts spending and consumption (cribs, changing tables, etc.). After birth, think formula, diapers and expensive vacations for pediatricians. The average U.S. family spends nearly a quarter-million dollars to raise a child. That is some serious GDP. On top of that, each new member of our population grows into a working, consuming and spending economic booster.
The empowered women of the world, however, have largely been ignoring Wattenberg’s warning. In recent years, as the annual global population growth rate has withered toward 1%, the economic alarm has been sounded more and more frequently and loudly.
When adult women shirk their duty to conceive, incubate and extrude more worker/consumers, our economy (GDP) falters. The problem is even more serious when teens practice safe sex. In the good ol’ days, when a 15-year-old started cranking out babies, by the time that mother reached 40 she could very easily take credit for a dozen or more kiddoes. Imagine the bill that brood would rack up at Wal-Mart every Saturday! And when they reach working age, the abundance of workers meant cheap labor and GDP heaven.
Never mind that, according to an Oregon State University study, adding just one child to your brood causes twenty times more climate disruption than you could ever offset by living a deep green lifestyle. Never mind that with 7.4 billion people on the planet today we’re using 1.5 times its biocapacity, crippling the Earth’s life-supporting ecosystems.
Someone needs to get CDC Director Tom Frieden, M.D. into econ 101. The CDC’s news release about teen pregnancies includes this misinformed Frieden quote:
“…the reality is, too many American teens are still having babies.”
He is troubled that CDC research reveals teen pregnancy and childbirth cost U.S. taxpayers an estimated $9 billion each year. Frieden should relax, knowing that is $9 billion added to U.S. GDP. Yahoo. Get those teens into the back seats of their parents’ Hondas, without contraception, so we can grow the economy.
May happens to be Teen Pregnancy Prevention Month. Someone should have checked with Fed Chair Janet Yellen or Chair of the U.S. Council of Economic Advisors Jason Furman before setting up this economic growth retarding agenda. This Mother’s Day, growth-boosting economists the world over want you to know that becoming a mother may be rough on the planet, but it is good for GDP. Screw the planet, and your lover.
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