Logo

2.1: The Number of Nations

| Opinion | September 7, 2017

Western civilization as we know it is dying. No, that’s not pejorative and it’s not clickbait, but rather a cold, hard fact. And if you’ve ever wondered why immigration has become such a big issue of late, you need to understand the most important number today for western society: 2.1.

This number, 2.1, is what we call the “replacement rate,” or the rate at which women must have children in order to keep a population stable. To break it down, a woman must have one child to replace her, one child to replace her mate and 0.1 to replace the infant mortality rate in the population.

So why is this important to us? Because at its current state, the only parts of the world that are currently above the replacement rate in terms of new births are Oceania and Africa. Studies have shown that much of this is due to education becoming readily available to women around the world, and that once a woman reaches at least a 2nd grade education the number of children she births reduces exponentially.

Putting on our macroeconomic thinking cap, can you imagine what this means for the greater economy? We typically think of supply & demand in terms of milk and bread and widgets, but what about people? Labor is just as important a factor in the supply & demand curve, and it has a much greater impact than what we would think about on a daily basis.

The way our social security system was set up requires workers to work for a large portion of their lives, have a small amount taken out of each paycheck to go to social security and then provide them with income assistance when they reach retirement age. When the Greatest Generation came back from the war and gave birth to the Baby Boomers, we had an excess supply of labor. We had so many people that new industries were developed to give people jobs.

Advertisment

This also meant that for every person retiring, we had a rather large number of people whose monthly deductions supported that person’s social security. And while I would love to blame the entirety of our impending social security shortfall on inept and greedy politicians, that number, 2.1, is actually more to blame.

The Baby Boomers put more workers in the American economy than ever before in history, but as the birth rate began to dwindle with their generation, the tides changed and we no longer have dozens of people supporting a single retiree. So now, with the largest population group in U.S. history preparing to retire, we have a drastically lower number of people in the workforce prepared to support that retirement.

So, if it’s too late for Baby Boomers to put more workers in the marketplace to support their retirement, where oh where are we going to get workers to fill our labor shortage?

Immigration.

Going back to our supply and demand curve, we see that the U.S. has a highly increased demand for labor, and thankfully there are other countries with an excess of labor that is ready, willing and able to fill that gap in India, China, Africa and, you guessed it, Mexico.

But there’s a problem with that: Five years ago Mexico also fell below that magic number of 2.1 births averaged across their population, and based on statistical forecasting, that means we only have about 15 years left in excess capacity of human labor to export to the United States.

I’m a big fan of President Trump and his pro-business policies, especially the ones that have been allowing my investment portfolio to skyrocket. But we have a huge issue very near on our horizon that not only isn’t being discussed much, but it’s not even being discussed in the correct fashion.

I agree that we do need to have a cap on immigration and we need to ensure that we aren’t allowing the wrong people into our borders, but I do not agree that we should be reducing what that cap is, as is being currently discussed.

A large number of Fortune 500 CEOs have been pleading with Trump to increase these numbers rather than decrease. Sure it would be nice to only bring in PhDs from India and China with zero criminal records who can come here (or have already been educated here) prepared to fill the vacancies needed in high-tech jobs.

But as my dad used to say, “The world needs ditch diggers too.” And right now we need a lot of everything.

Unfortunately, this is a problem that we’d rather “kick the can down the road” until it’s too late. But failing to address this issue right now, in the correct way, with the correct numbers in mind (2.1) means that we are setting the stage for our parents to retire and literally break the safety net that has been put in place.

But breaking the safety net isn’t the only problem. There are many pundits who like to claim that immigrants are stealing jobs from Americans. And while the “they took our jobs” rallying cry is a main part of my favorite “South Park” episode (Season 8, episode 7 “Goobacks from the Future” which is very timely right now), it’s not quite reality.

“Vice” did an excellent episode on the fallout (“Sweet Home Alabama”) on what actually happens when immigration policies that are too strict are enacted in a place that needs those people to do certain types of labor.

After Alabama enacted their new immigration policies they found that farmers just could not harvest their crops without immigrants. They tried bringing in Americans from unemployment offices, but they were just too lazy to do the back breaking work required. They tried prisons next in a throwback to the chain gang days and, surprise, surprise, they also were just too darned lazy. So the Alabama farming community basically lost an entire year’s harvest for lack of people to pick them.

All politics aside, we need immigration. We are a nation of immigrants, but more importantly, we are a nation built on our economy, which needs more people than we are currently producing.

If you can take all political factors out of the equation, this problem boils down to simple economics, which any good Republican or Conservative should be able to comprehend. We have an excess of labor demand and shortage of labor supply. Other countries have (for now) an excess of labor supply and a shortage of demand for that same labor.

We need to allow the free market to work and allow the demand to be met by the supply available. Because if we don’t, the capitalism experiment that has been The United States of America may become nothing more than a future lesson in history and economics textbooks.

Robert Patrick Lewis is a Green Beret OIF/OEF combat veteran with 10th SFG(A) and is an award-winning author of The Pact and Love Me When I’m Gone: The True Story of Life, Love and Loss for A Green Beret In Post-9/11 War. Follow him @RobertPLewis on Twitter or on his RobertPatrickLewisAuthor Facebook page.

No Tags

  

About Robert Patrick Lewis

Robert Patrick Lewis is a former Green Beret combat veteran of Iraq, Afghanistan and Africa turned author. His book “Love Me When I’m Gone: the true story of life, love and loss for a Green Beret in post-9/11 war” is currently available, with his next book scheduled to hit the shelves in January 2015. He currently lives in Santa Clarita and works as an Investment Advisor Representative for TransAmerica Financial Advisors.

Leave a Reply

Popular Ads Today

Doug’s Rant – Video Edition

  • WatchDoug's Rant June 16, 2017
  • WatchDoug's Rant May 26