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Talking Business: Population drop threatens disruptions at businesses, retirement programs

A declining birth rate in the U.S. will create problems for employers and safety net programs such as Social Security, the author asserts. (Erin Hooley/Chicago Tribune)
A declining birth rate in the U.S. will create problems for employers and safety net programs such as Social Security, the author asserts. (Erin Hooley/Chicago Tribune)
Don Cunningham is the president and CEO of the Lehigh Valley Economic Development Corp. (Contributed photo)
PUBLISHED:

Nothing in life prepares you for your hair turning white and falling out.

There are much worse afflictions that can befall you but in the realm of vanity it’s a transformation that tops the charts. One day you’re a young parent with a thick, colorful head of hair and then, it seems, overnight you’re not. It happens gradually but it’s noticed suddenly.

Rapid change of this order makes you question both bathroom lighting and mirror quality the same as pants getting tight lead to accusations that the dryer is shrinking clothes. Something must be wrong with something else. But that mirror reflects a true image. It’s a form of self-preservation that we see what we want – until we don’t.

As with those old photos where we can’t believe what we wore or the style of our hair. The day the photo was taken we stood in front of a mirror and walked away thinking we looked pretty darn good. The mirror was working. But we saw something different.

In a recent survey of adults older than 40 they perceived themselves as 20% younger than their actual age.

I can remember the first time I walked past a bathroom mirror and saw a hybrid image of my grandfathers reflected at me. I was shocked. It then made sense why servers and bank tellers had been calling me, “sir.” I thought I was more like 40% younger than my actual age.

I didn’t want to look like my grandfathers. I wanted to look like me. That was until my first granddaughter looked up and called me, “Pop.” My thinned out white hair made sense. I was somebody’s grandfather. The circle of life had rounded another turn.

Today, I have two granddaughters, both daughters of my daughter. They’re 3 and 1. Being with your children’s children is one of life’s true blessings. Not all get to experience it. I am fortunate.

My wife, Lynn, and I spent a recent weekend with my daughter, Bridget, and her family. For two glorious days I was “Pop.” I pushed swings, had stick fights, blew bubbles, wrestled on sofas, played hide and seek and walked in the woods. We went nowhere outside the neighborhood except to eat. Yet, I returned happier, more relaxed and more at peace then if we’d taken an expensive spa vacation in the Caribbean.

Humans are programmed to replace themselves. And to love and enjoy the next little versions of us. This, too, is an underlying part of human vanity. If something doesn’t go wrong this is how the system is supposed to work. Our inner human wiring welcomes it and finds pleasure in it – and our financial, economic and community systems are built upon humans replacing themselves.

Something is amiss. Two-thirds of the world’s population live in countries with a birth rate so low that those populations are no longer replacing themselves. It requires a rate of 2.1 for that to occur. In the United States, the birth rate is now 1.62 babies per woman. In 2007, the U.S. birth rate was 2.12. The average birth rate in European countries is now 1.5. It’s 1.2 in East Asia and 1.9 in Latin America. Demographers call this natural population decline.

In the Lehigh Valley the population has been growing for decades but in recent years there have been more deaths than births. Population growth is coming from migration and immigration of people from other states, countries or areas of Pennsylvania. Even with a growing population, it’s been challenging in recent years to find enough workers to fill the number of jobs the local economy is creating. Automation, technology and ingenuity is working to solve that problem. Businesses will find ways to get the work done.

The biggest challenge for America and the world with declining birth rates – aside from the parents waiting and praying for grandchildren – are the systems built on needing students and workers. Programs such as Social Security and Medicare rely on working age people for the funds to support the growing number of retired people. The notion that Social Security is a “trust fund” where the money workers’ paid in is returned to them holds up for only for a handful of retirement years. It’s primarily a transfer from those working to those who are done.

The rapid number of Baby Boomer and early Generation X retirements will eliminate the program’s surplus by 2035. At that point, action will be needed to reduce benefits or increase revenues. Most likely, it will be a combination of both. The brick wall at the end of the road is in sight and not even David Beckham will be able to kick the proverbial can through it. I can look forward to that in my early retirement years.

For the next generations it will be worse. It’s not likely that robots will pay Social Security taxes. New creative solutions will be needed. But voters aren’t likely to allow any change until a financial crisis engulfs the system. Until then, I’ve decided to fully embrace this thin white hair that’s come to me during my 50s and to cherish every minute I spend with a little one calling me “Pop.”

For the greater good, I pledge to cajole my other children to do their patriotic duty to increase the birth rate, so we Americans replace ourselves and save Social Security – and, selfishly, so I can have grandchildren stick fights and sofa wrestling matches for years to come.

Don Cunningham is the president and CEO of the Lehigh Valley Economic Development Corp. He can be reached at news@lehighvalley.org.

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