Having Less Babies is Bad for the Economy

Go Lean Commentary

Little GirlsMore fallout from the year 2008…

This is a consistent theme in the book Go Lean…Caribbean. The book posits that the events of that year were a crisis for the Caribbean, North America and the world economy as a whole. What’s worst is the Caribbean is still reeling from those events.

“A crisis is a terrible thing to waste”

… so states the book quoting noted Economist Paul Romer. The opportunity therefore exists to forge change in the economic, security and governing engines of the Caribbean, in response to this crisis.

The below news-story (or click on VIDEO icon below) shows that the rest of the world, those with astute eyes/ears to look, listen and learn, will be using this crisis to prepare for change. This is the advocacy of the Go Lean book, to position the region at the corner of preparation and opportunity, so as to benefit from change. The issue from the article is more pressing for the Caribbean than the rest of North America; this is because the region has a very high emigration rate (brain drain). This point is crystalized with this quotation:

We tend to think economic growth comes from working harder and smarter. But economists attribute up to a third of it to more people joining the workforce each year than leaving it. The result is more producing, earning and spending.

The book Go Lean…Caribbean serves as a roadmap for the introduction and implementation of the Caribbean Union Trade Federation (CU), a super-national institution with federal powers to forge change in the Caribbean community. One mission is incentivizing the return of the far-flung Caribbean Diaspora. Another mission is to dissuade further human flight/brain drain. The numbers don’t lie: we need population growth not population contraction.

NEW YORK (AP) — Nancy Strumwasser, a high school teacher from Mountain Lakes, New Jersey, always thought she’d have two children. But the layoffs that swept over the U.S. economy around the time her son was born six years ago helped change her mind. Though she and her husband, a market researcher, managed to keep their jobs, she fears they won’t be so fortunate next time.

“After we had a kid in 2009, I thought, ‘This is not happening again,'” says Strumwasser, 41, adding, “I never really felt comfortable about jobs, how solid they can be.”

The 2008 financial crisis did more than wipe out billions in wealth and millions of jobs. It also sent birth rates tumbling around the world as couples found themselves too short of money or too fearful about their finances to have children. Six years later, birth rates haven’t bounced back.

For those who fear an overcrowded planet, this is good news. For the economy, not so good.

We tend to think economic growth comes from working harder and smarter. But economists attribute up to a third of it to more people joining the workforce each year than leaving it. The result is more producing, earning and spending.

Now this secret fuel of the economy, rarely missing and little noticed, is running out.

“For the first time since World War II, we’re no longer getting a tailwind,” says Russ Koesterich, chief investment strategist at BlackRock, the world’s largest money manager. “You’re going to create fewer jobs. … All else equal, wage growth will be slower.”

Births are falling in China, Japan, the United States, Germany, Italy and nearly all other European countries. Studies have shown that births drop when unemployment rises, such as during the Great Depression of the 1930s. Birth rates have fallen the most in some regions that were hardest hit by the financial crisis.

In the United States, three-quarters of people surveyed by Gallup last year said the main reason couples weren’t having more children was a lack of money or fear of the economy.

The trend emerges as a gauge of future economic health — the growth in the pool of potential workers, ages 20-64 — is signaling trouble ahead. This labor pool had expanded for decades, thanks to the vast generation of baby boomers. Now the boomers are retiring, and there are barely enough new workers to replace them, let alone add to their numbers.

Growth in the working-age population has halted in developed countries overall. Even in France and the United Kingdom, with relatively healthy birth rates, growth in the labor pool has slowed dramatically. In Japan, Germany and Italy, the labor pool is shrinking.

“It’s like health — you only realize it exists until you don’t have it,” says Alejandro Macarron Larumbe of Demographic Renaissance, a think tank in Madrid.

The drop in birth rates is rooted in the 1960s, when many women entered the workforce for the first time and couples decided to have smaller families. Births did begin rising in many countries in the new millennium. But then the financial crisis struck. Stocks and home values plummeted, blowing a hole in household finances, and tens of millions of people lost jobs. Many couples delayed having children or decided to have none at all.

Couples in the world’s five biggest developed economies — the United States, Japan, Germany, France and the United Kingdom — had 350,000 fewer babies in 2012 than in 2008, a drop of nearly 5 percent. The United Nations forecasts that women in those countries will have an average 1.7 children in their lifetimes. Demographers say the fertility rate needs to reach 2.1 just to replace people dying and keep populations constant.

The effects on economies, personal wealth and living standards are far reaching:

— A return to “normal” growth is unlikely: Economic growth of 3 percent a year in developed countries, the average over four decades, had been considered a natural rate of expansion, sure to return once damage from the global downturn faded. But many economists argue that that pace can’t be sustained without a surge of new workers. The Congressional Budget Office has estimated that the U.S. economy will grow 3 percent or so in each of the next three years, then slow to an average 2.3 percent for next eight years. The main reason: Not enough new workers.

— Reduced pay and lifestyles: Slower economic growth will limit wage gains and make it difficult for middle-class families to raise their living standards, and for those in poverty to escape it. One measure of living standards is already signaling trouble: Gross domestic product per capita — the value of goods and services a country produces per person — fell 1 percent in the five biggest developed countries from the start of 2008 through 2012, according to the World Bank.

— A drag on household wealth: Slower economic growth means companies will generate lower profits, thereby weighing down stock prices. And the share of people in the population at the age when they tend to invest in stocks and homes is set to fall, too. All else equal, that implies stagnant or lower values. Homes are the biggest source of wealth for most middle-class families.


AP researcher Fu Ting in Shanghai and AP writers Frank Jordans in Berlin, Colleen Barry in Milan and Youkyung Lee in Seoul, South Korea, contributed to this report.

Huffington Post – Online News – May 8, 2014 http://www.huffingtonpost.com/2014/05/07/birth-rate-economy_n_5281597.html

The CU recognizes that the numbers must work in favor of societal progress. The next steps after Look-Listen-Learn is to Lend-a-hand and then Lead. (This is referred to as the 5 L Progression). So to lend-a-hand, the Go Lean roadmap advocates that population leveling can be accomplished with a regional integration. There are many social safety nets that depend of this actuarial exercise. Consider unemployment and pensions: for unemployment, workers pay into a fund and the temporarily unemployed file claims against that fund. Likewise with pensions: young workers pay into a fund, and the older-retired workers draw claims against that fund.

The CU is structured to lead … for the economic elevation of the region of 42 million people in the 30 member-states. The Go Lean roadmap provides the details for the creation of 2.2 million new jobs and GDP growth to accumulate to $800 Billion. This commission to lead is at the root of the Go Lean effort, embedded in the opening Declaration of Interdependence (Page 13):

xxiv. Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxv. Whereas the legacy of international democracies had been imperiled due to a global financial crisis, the structure of the Federation must allow for financial stability and assurance of the Federation’s institutions. To mandate the economic vibrancy of the region, monetary and fiscal controls and policies must be incorporated as proactive and reactive measures. These measures must address threats against the financial integrity of the Federation and of the member-states.

Currency 2According to the foregoing article, America needs to have more babies. While this disposition varies from country to country, the Caribbean needs to furnish the environment for families to make their own family-planning decisions based on their own personal motivations, not economic realities. Broken economies can (and will) be fixed! Love for the Caribbean homeland should therefore be the primary motivation for the CU effort. From the cradle-to-the-grave, we need love to be the principal motivation, not fear or economic metrics, for making the Caribbean a better place to live, work and play.

Taking the lead for this goal takes real work, heavy-lifting on the part of the stewards of the Caribbean economy. This is the charter for the CU, as started in the Declaration of Interdependence (Page 13), a direct quotation from the US Declaration of Independence, as follows:

… that to secure these rights (life, liberty and the pursuit of happiness), governments are instituted among men, deriving their just powers from the consent of the governed. … [It] is the right of the people to … institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.

The following details from the book Go Lean … Caribbean are the community ethos, strategies, tactics, implementations and advocacies prescribed to manifest the elevation of Caribbean economy, society and life:

Who We Are – SFE Foundation Page 8
Community Ethos – Deferred Gratification Page 21
Community Ethos – new Economic Principles Page 21
Community Ethos – new Security Principles Page 22
Community Ethos – new Governing Principles Page 24
Community Ethos – Ways to Impact the Future Page 26
Community Ethos – Ways to Impact Turn-Arounds Page 33
Community Ethos – Ways to Promote Happiness Page 36
Community Ethos – Ways to Impact the Greater Good Page 37
Strategy – Repatriating Caribbean Diaspora Page 47
Strategy – Non-Government Organizations Page 48
Strategy – Agents of Change – Aging Diaspora Page 57
Tactical – Confederating a Permanent Union Page 63
Tactical – Fostering a Technocracy Page 64
Implementation – Assemble all Member-States Page 96
Implementation – Ways to Pay for Change Page 101
Implementation – Reasons to Repatriate Page 118
Planning – Lessons Learned from 2008 Page 136
Advocacy – Ways to Grow the Economy Page 151
Advocacy – Ways to Create Jobs Page 152
Advocacy – Better Manage the Social Contract Page 170
Advocacy – Ways to Foster Empowering Immigration Page 174
Advocacy – Impact the Diaspora Page 217
Advocacy – Ways to Preserve Caribbean Heritage Page 218
Advocacy – Ways to Impact Retirement Page 221
Advocacy – Ways to Help the Middle Class Page 223
Advocacy – Ways to Improve Elder-Care Page 225

The Go Lean roadmap is a product of 2008. From this fallout, this plan was composed, by individuals intimate with the details of the crisis … and its causes.

The goal is to learn from the Year 2008 and spread new benefits across the Caribbean region. This roadmap identifies where we are as a region currently, where we want to go, and most importantly, how we plan to get there (turn-by-turn directions). It is time for us to move now to that place, that corner of opportunity and preparation.


Download the book Go Lean … Caribbean – now!

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