Every year, the Center for Disease Control comes out with a report on the fertility rate in the United States, and to hear the reporting about it, the situation in the US is dire. More than three point eight million babies were born in the US last year. That's the lowest number since the next generation of Americans is getting smaller, not in size, but in number. So a mystery to researchers is why birth rates haven't increased along with the
growing economy. So why all the panic, asked Gina Smilek, economics reporter who you might remember from episode one, and she says, it's because we really need more babies for the economy to grow. So basically, economic growth comes from just a couple of sources. One of them is population growth, the other is predictivity improvements. It's kind of just simple math, and I think that makes it nice to think about. And at the end of the day, that's kind of
what it all boils down to. It's how many workers do you have available in your economy and how much can they produce? The thing is where at this place in the global economy where we're not seeing a lot of productivity growth anymore, So we're kind of muddling along with basically the same old, same old productivity growth much slower population growth, especially in advanced economies. In other words, women's contributions as mothers are responsible for powering economic growth.
We don't usually think about it like that, but moms are making huge economic contributions. We've been spending the last few weeks talking about what motherhood does to women's earnings. We know about having kids makes it hard to work for pay, which is a drag on women, their families, and the economy. But there's also a flip side to that, which is because it's so hard to work for pay and have kids, many women just aren't having as many kids.
The difficulty women have balancing children with their careers is one reason we're seeing lower fertility rates g S S. I think there are a lot of theories out there. I think the one that seems most immediately clear is that women have come into the labor market in a
way that they previously weren't. I think more that's clearly not the whole story here, because we saw the fertility rate rise in the nineties and early two thousands, and it's fallen off again, and so I think we can attribute the remainder of that to a couple of things. One is the economy and the condition that the economy is in at any given moment. So, you know, I think child care is expensive, tuition is expensive, owning a
house is expensive. Some of the reasons the fertility rate is falling are good, like having more women in the workforce, and we've also seen a decline in unintended pregnancies. And even lower fertility rates aren't all bad. The u n S Extinction report that just came out cited the growing population of humans as one of the reasons for shrinking populations of just about everything else. But lower fertility rates do create economic fallout, and countries facing this problem don't
have any easy options for dealing with that. I think that's always the complicated thing when you hear these stories about the declining fertility rate couched as an automatic bat because there are good things about a declining fertility rate if it's coming for the right reasons. I think at the end of the day, though, you still are going to have to grapple with the reality that in the longer term it is going to reduce your economic potential unless you can come up with some other way to
grow your economic potential. And so unless we all adopt much more permissive immigration policies, we are all going to eventually face slower population growth or shrinking populations. And you could do things like better train your existing workforce, get more people into jobs deep in your capital stock. But I don't think we're seeing a lot of active policy making around that yet, and that is going to have to change if people want to see the kind of
growth that previous generations have enjoyed. When Gina says lower fertility rates are leading to slower economic growth, it doesn't just mean we're going to be less excited about the next g d P report. It means less prosperity for everyone. It means that populations will get older on average and have fewer young people to take on the social and financial costs of their care. And it means a potential global economic slowdown. When you look at the world, you know,
what of the population like? Where is our place? Like? Where is our value? Deserve people for equal work? Is the time to make America make again? Last year, the US population grew by only zero point seven percent. The lowest growth rate is the Great Depression. There's in a single industry where women aren't punished for appropriating others are declining. Fertility rates are the result of women's success, their choices to pursue careers earlier, bare children later, oftentimes on their own.
When women are financially stronger, it's good for their families, it's put money into the economy, into markets. It's good for everybody. And that becomes a problem when you're relying upon younger generations to pay for many of the social programs of older generations, of which there are now more people welcome to the paycheck. I'm Rebecca Greenfield. Having kids is hugely important to the economy, but we don't treat
it that way. When women take time off from their jobs or work fewer hours to raise their kids, we view that as a reason to pay them less. But having and raising kids is work. It contributes to the GDP. It's a job that women are doing for free, and we penalize them for it. Low fertility rates aren't just a problem in the US right now. What we see around the world, mostly in advanced economies, is that women aren't having as many babies as they used to. Countries
need couples to make two children to replace themselves. This is known as the replacement rate. The ideal rate is around two In places like Japan, Spain, Germany all over, they're not hitting that number. The individual reasons for not having children may be different, but for a lot of them it boils down to a decision between having kids and having a career, and if you want one, you may not want the other. I just never really had
ambition towards having raising kids. I've always felt like in order to have the career that I want, it would have to be one or the other. I see my peers around me who have kids and how they control their life, and I'm kind of happy that I don't have that sort of control in place. I don't have
kids because being a mom costs an enormous amount. I don't have kids because I don't feel financially secure enough we pay mentally emotionally, I worry about like missing out on the experience of having the bonds that women have around being mothers. It costs a lot physically, professionally, financially. There seems to be more ability for me to do things for work that my peers cannot because of children, you know, And I might feel differently if I could
be a dad. Because the global economy demands women have children, countries often try to engineer it so women make that choice. In the US, we have child tax credits. Japan has experimented with giving couples one time cash payouts to have kids. The Italian government promoted a national Fertility Day. And then there's China. The low fertility rate there has been called
a crisis. By some estimates. Women in China have between one point two and one point eight children each, below the number needed to sustain a growing economy and to support its rapidly aging population. China is a case study and how hard it is to get people to have more babies. China this morning is preparing to implement one of its most sweeping social changes in the last thirty five years. The government will allow married couples to have
two kids instead of just one. This move comes as China grapples with an aging workforce and gender and balance. Since the nineteen eighties, China has told its citizens how many children they're allowed to have, beginning with the one child policy. In the nineteen sixties and seventies, the world was experiencing a population boom. The number of people was on track to double in around thirty years. Coming out of the Cultural Revolution, China was dealing with poverty, food shortages,
and hunger. More people meant more mouths to feed well. The understanding was extremely simplistic. The idea is that if you have fewer birth born next year, you do not need to feed them. That was long Fun, a professor in the sociology department at the University of California, Irvine and one of the world's leading experts on Chinese demographics. The actual one child policy was not so simple. It
only applied to members of China's Han ethnic majority. Some couples could apply to have more than one child if they lived in rural areas or if they were only children, but for the most part, you got one kid. The one child policy made the existing demographic trend more extreme. By the late nineteen seventies, women were already starting to have fewer children. Improvements in science meant there were lower
infant mortality rates and more women were working too. Signs of trouble first started showing in when a population survey found the fertility rate was below the replacement rate. Not only did fewer women want lots of kids. Most of the ones who still did want them weren't allowed to have them. Women were forced to have abortions, There were forced serialization procedures, and because girl babies were seen as less desirable than boy babies, tens of thousands of them
were abandoned or put up for adoption. Today there are thirty million more men in China than there are women, and the few women that there are were raised to be independent. There are is at least one I intended positive impact for women in China, that is many only
children girls. Because they were only children, they received the totality of their parents investment in education, and so you have a young gin oration of women who are as well educated, and that has multiple effects in terms of their pursuit of their career and in terms of their desire to live independent life. Now population growth is down to less than a half percent, and by percent of the population will be over the age of sixty five. By then growth is projected to slow to zero and
even turn negative. The ripple effects of all of this are already being felt. Because of this small birst cohort in the ES and the number of young people entering the label force has been going down, and it is
going to continue to go down. And that also means that you're not going to have as many young couples who are gonna get married, and then to extend, you're not going to have many new babies because there are few parents, and you can think about the consumption impact where you would not need as many new housing units. So that effect has already started. And that's what China is dealing with now, a smaller, rising generation that's consuming less,
producing less, and still not having kids. So in s facing this new demographic reality, China relax the one child policy and for the first time it allowed any couple to have two children. One Chinese government adopted to China policy in lots of people were very excited about this new change because one China policy has been in China
for so long. The change itself seems really significant, and when it comes down to the impact of that policy, like how many new baby have been born in the past two years, the numbers are not that significant at all. That was on don Ley. She works in Bloomberg's Beijing bureau. She says many women in China don't want to have more than one kid. They say they want to focus on their careers. They say it's too expensive, and they say that they don't have enough help. Beverly Chen, she's
in her med twenties. She was an architecture designer. She graduate from one of the best universities in China and then she settled down in hans Your wits to her husband. When Beverly had her first child, she stopped working to take care of him because she and her husband couldn't afford a nanny and the government doesn't provide any support.
But she wasn't happy staying home joker. Raising a child at home is a tedious task and can be very challenging sometimes since I don't have the help needed, staying at home and not working disconnected me from the outside. That's Beverly. She and her husband actually co write little architectural firm, so when she had the baby, her husband showed her all the workloade so she can focus on the parenting part. That was how they decided to divide the labor in the house, and that's also one of
the reason why she felt her value was undercut. The Chinese government desperately wants people like Beverly, educated married working women to have more kids and they've done a lot more than relax the one child policy. They've done some of the usual things like offer paid parental leave, tax breaks, and housing subsidies, but they've also gone way beyond that. The state run newspaper runs editorials about the best age for women to get pregnant. The government even sponsors dating
meetups for young singles. In February, Beverly made what she called the hardest decision of her life. She sent her son to live with her in laws and her husband's hometown three hours away so that she could go back to work. She only sees her son twice a month. Having another kid isn't something she and her husband want, but even if they did, the logistics would be too complicated for them to manage. That is completely not on her agenda for now. She doesn't have but the help
she needs to bring up this child. She's not happy with her circumstances at this moment, and if she's not happy as a mother, that would definitely affect her son in some kind of way. And also, she's very young at the age of you know, she has a lot of potential to do things that she want in her life. Stuff that she wanted to achieve with her knowledge, with her education and her degree. Sending her sound to her in laws. It's the only visible way that she can
find at this moment. Women have too many reasons not to have kids, and those reasons go beyond how many they're allowed to have. Take Jenny John. She didn't want us to record her, but when we talked to her in Beijing, she said she has a thriving career as a tech executive, a husband, a great apartment, and one baby. But that's it for her. She's done. I know it sounds ridiculous for someone whose household income is around three d thousand per year, but she still complaints about her story.
Cannot support another child because she needs to pay her mortgage, she needs to support her parents, and also she wants to get the best resource for her daughter. Because of the one child policy, there are now generations of only children who have to take care of their aging parents on top of any kids of their own. That's a big burden, especially for women in China who have been raised with the belief that they have a duty to
work just like men. Dating back to the foundation of People's Republic or China, that was the slogan of women can hold half of the Sky was actually coined by the Communist Party itself. All of them wants to achieve something in their life and that won't be interfered by the desire of having more children. For a lot of Chinese women, having more children is threatening their ability to keep their jobs. That's what happened to Jane chen So.
Jane had a master degree in journalism. She went back to Situan after graduation from our grad school, and then she found a job. Her supervisor gave her a quite hard time when she had her first child. On my supervisor said a woman would inevitably focus more on a family after having a baby. Well, just really actually linked out. She always thought I invested more energy into my family
after having a baby. There's this tension. It's in the country's national interest for women to have more children, but it's in the employer's interest for them not to have more children, or for them to not hire women with children. Now that the one child policy has been relaxed, companies are more likely to discriminate against women because they're afraid that more kids will distract women from their jobs. China has laws that protect women from discrimination but enforcement is weak,
so employers are still getting away with it. Jane's supervisor's attitude didn't make her think she should cut back on work. She worked just as many hours as she did before and says the numbers show her job performance was better than before she had a baby. It did make her think she should cut back on having kids. Should the whole what's your mill? Don't you need too that? Having another child is definitely not on my checklist. I'm just getting accustomed to the new job and I don't have
the extra energy to take care of another newborn. I won't consider that option unless my son wants a sibling. China is considering what else they can do to persuade women to have more kids, including ending child restrictions altogether, but it could also pressure women in other ways, like limiting their access to abortions and divorce. The big question in all of this is why didn't anyone predict this disastrous population growth slow down before the policy went into effect.
Wouldn't have taken complicated modeling to know that eventually the one child policy was going to cause a demographic crisis, So how did the Chinese government not see this coming? One fund says they did from the very beginning of the policy. Uh, it was seen as a policy of necessity, not of choice, from the very beginning when they announced
the policy. Try to sell this to the public. They recognize there will be there would be negative consequences, but they also saw those were issues that would only come up thirty forty years down the boat. So they actually set in thirty years China would be a different place, then we could have a different policy. So there were anticipation of negative consequences. But as politicians, they want to kick the can down the road, so they want other
people to pick it up, which is now. So that's where we are today, with a birth rate way below the replacement rate and with none of the attempts to fix it working. And it's women who are now stuck with the entire burden of fixing this problem. That's essentially not their fault. You know, the demographic reality has changed, but the mentality, I would say it's a sexist mentality, the status mentality has not changed. That is, when birds control needed to be exercised, it was job of women,
so they shouldered physically disproportionate burden during that process. And now there's this concern for low fertility, and you have policymakers and some public opinion leaders would be turning this around and to make this a women's burden, a women's job as well. The causes of China's and pending population crisis may be unique, but countries around the world are struggling with the same problems. And it's not just about
getting women to have more kids. A lot of people, women and men, don't want to have to choose between having a career and having a family. They want both, and if everybody who wanted to could have both, that'd be ideal, not just for women but for the economy. Countries do all these things to try to manipulate women into having babies, but there's another option. We can start
treating motherhood like what it is, a job. There's one country that has relatively high fertility rates ant high workforce participation rates among women. It's the land of the lage Papas Sweden. Families in Sweden get a monthly allowance from the government for each kid until the kid hit sixteen. For women, men between the ages of and fifty four in Sweden work but they're also having more babies on average than women in China and here in the US.
Next week on the Paycheck, the moment in history when the United States almost had it all figured out. There's first aid facilities there, so if your kid is sick, your kid is taking care of Your kid gets inoculations. They had art classes, there were outdoor recreational activities. They had nutritionists on staff so that your child was getting a well balanced meal. Thanks for listening to the Paycheck.
If you like the show, please head on over to Apple Podcasts or wherever you listen to great review and subscribe. The show was hosted and reported by me Rebecca Greenfield and reported by Jillian Goodman. This episode was edited by Jillian Goodman and produced by Liz Smith. We also had production help from Francesca Levy, Janet Paskin, Anthegat, Sic, Laura Carlson, and tofor Foreheads. Our original music is by Leo Sidron. Catherine Virginia did the illustrations on our show page, which
you can find at Bloomberg dot com. Slash the Paycheck and thanks to all the women who spoke to us for this episode. Francesco Levie is Bloomberg's head of Podcasts.