If demography is destiny, then America's economy in the next century may be very different from that of its chief trading rivals. Almost alone among industrial nations, the U.S. now looks forward to sizable population growth through 2050 and beyond.
This prospect was underscored by new Census Bureau projections released last year. As recently as 1989, the agency had predicted that the population of the U.S., about 258 million today, would peak at about 302 million in 2038. But now, it anticipates that the population will hit 383 million by 2050 and keep growing.
This picture is in sharp contrast to other industrial nations, where growth is now grinding to a halt. While the world is adding a record 90 million people a year, almost all of that growth is in developing nations. "The only major exception is the U.S.," says Carl Haub of the Population Reference Bureau. (Canada and Australia are also growing, but their populations are only 17% of the U.S. total.)
Why is the U.S. the odd man out in the industrial world? Haub notes that the U.S. fertility rate, which had dipped below the population-replacement level of 2.1 children per woman in the 1970s, has moved back close to that level. By contrast, the fertility rate averages only 1.5 to 1.6 in Japan and Europe.
At the same time, U.S. immigration, enhanced by liberalized legislation a few years ago and by a sizable influx of illegal immigrants, is now on a par with the great migrations of the early 20th century. The U.S. now absorbs 1 million immigrants a year, which amounts to 1 out of every 100 people added to the world population. Meanwhile, other industrial countries are in the process of closing their doors to both legal and illegal immigrants.
The growing opposition among Europeans--and among more and more Americans--to further immigration reflects tensions spawned by the high unemployment plaguing the industrial world. But the more liberal U.S. policy could turn out to be advantageous in the long run.
For one thing, other industrial nations must cope with static or declining labor forces. By 2025, for example, Japan will lose 12.2 million people age 15 to 64, Germany 4.5 million, and Italy 4 million. But the U.S. will actually add some 38 million.
More important, all advanced nations face rapidly aging populations and a sharp drop in the ratio of working-age people to the elderly early in the next century. Because the U.S. baby boom generation is now entirely in the labor force, there are more than five Americans 15 to 64 years old for each older person, compared with an average ratio of only 4.3 to 1 in Western Europe.
Although most of America's baby boomers will be age 65 and older by the year 2025, current projections indicate that the U.S. ratio will still be higher than that of most other advanced nations--holding at about 3.3 to 1 in the U.S., compared with 2.9 to 1 in Britain, 2.7 in France, 2.5 in Germany, and just 2.3 in Japan, where 30% of the population will be elderly. "America's high fertility and immigration could prove to be a big plus in the decades ahead," says economist Philip Suttle of Morgan Guaranty Trust Co.