On the demographic front things are not looking so good for the eurozone.
With declining birth rates and the aging of the population, Mario Draghi will
struggle to produce inflation in a population deflationary environment.
Spanish Birthrate Plummets
Please consider Spain Dying as its Birthrate Plummets.
Spain’s population will fall by more than five million
over the next 50 years, according to a forecast that raises the prospect of
even more “ghost villages” around the country.
In the first six months of this year, Spain recorded 225,924 deaths and
206,656 births, the national statistics institute reported. The country has
not seen deaths exceed births consistently since the civil war, from 1936 to
1939, and before that the 1918 Spanish flu pandemic.
Time for Spain to Address its Plummeting birth rate?
The English version El Pais asks Is it time for Spain to address its plummeting birth rate?
Figures from the National Statistics Institute (INS) show
there was a peak in 1944, with 23 births per 1,000 inhabitants. But that
number bottomed out in 1998 when only nine births per 1,000 were reported.
“We have seen an incredible decline in the birth rate, which has been cut by
half since 1975, and this trend is here to stay,” says Andrés, of the
University of Palencia.
But for Julio Vinuesa, a demographer at Madrid’s Autónoma University, the
study doesn’t provide any new information, but simply reiterates the fact
that there has been “a drop” in Spanish birth rates.
“We are witnessing a rapid decline in births and it seems that nobody cares.
In the short term it is a relief because it means less spending for families
and for the state, and nobody is complaining because no one stops to think
about the future consequences,” he says.
British economist Paul Wallace, author of Agequake, which investigates
the causes and effects of population aging, has argued that the major
investment for any society must be in its own replacement. In this case,
Spain has failed.
For the past 10 years, Vinuesa has been pushing for “policies to encourage
fertility." But no one has listened to him.
Meanwhile, the plunge continues.
Death of Spain's Interior
In almost half of Spanish provinces, a third of inhabitants are aged 65 or
over. Quite literally, it's a case of Spain’s Dying Interior.
A new map is emerging of Spain’s interior, where a huge
swathe of the country is slowly dying as a result of aging populations and
migration to the cities. In 22 provinces, a third of inhabitants are already
aged 65 or over, while the national average is 16.7 percent. When in 2005
demographer Francisco Zamora was asked to calculate how best the country
could retain its population structure in 2050, the only answer he could come
up with was for women to have 7.5 children each.
A decade later, he says, “there is nothing to be done other than selective
immigration.” But Spain has already witnessed rapid immigration – around 6.5
million people have come into the country over the last 20 years – while the
birth rate continues to fall, from 1.4 children per woman in 2008 to 1.27 in
2013.
Demographers say the majority of people who work in the countryside live in
towns rather than rural communities. The villages will increasingly be a
place to visit at the weekend, and will slowly die out as their populations
age.
German Population Shrinks
Reuters reports German birth rate grows, but population shrinks.
Germany's birth rate rose last year to its highest level
in 12 years, helped by years of economic growth and government support, but
not enough to offset the death rate, and its overall population continued to
decline.
Births rose by 4.8 percent in 2014 and climbed above the 700,000-threshold for
the first time since 2004 to 714,966, the statistics office said.
The declining number of Germans is partly being offset by rising immigration.
Some 8.6 percent of its population of 81.8 million are foreigners.
Also, Germany has taken in 40 percent of the refugees arriving in the
European Union this year. On Wednesday, the government raised its forecast
for an influx of 800,000 people this year fleeing war and poverty in the
Middle East, Asia and Africa.
Steady economic growth since 2010 and generous pro-family policies by
successive governments in recent years have helped lift the birth rate, the
statistics office in Wiesbaden said. Still, "we've got a lot of hard
work ahead of us," said Family Minister Manuela Schwesig.
The number of births is likely to start falling again, because economic
upheaval cut the birth rate in the former East Germany after unification in
1990, officials said.
"There was a steep fall-off in births after 1990 and that means there
are now fewer women in the main child-bearing ages," said Olga Poetzsch,
a government statistician.
The number of births plunged from 906,000 in 1990 to 830,000 a year later and
tumbled further to 765,000 by 1995, she said. It reached 663,000 in 2011.
Germany's birth rate peaked in 1964 at 1.4 million, Poetzsch said. Deaths
have exceed births [since] 1972, by a total of about 5 million fewer births
than deaths.
Germany Demographic Profile
The above from Germany
Demographics Profile 2014
Italy on Threshold of Population Deflation
The Guardian reports Italy is a 'dying country' says minister as birth rate
plummets.
February 12, 2015
Fewer babies were born in Italy in 2014 than in any other year since the
modern Italian state was formed in 1861, new data show, highlighting the
demographic challenge faced by the country’s chronically sluggish economy.
National statistics office ISTAT said on Thursday the number of live births
last year was 509,000, or 5,000 fewer than in 2013, rounding off half a
century of decline.
The number of babies born to both natives and foreigners living in Italy
dropped as immigration, which used to support the overall birth rate, tumbled
to its lowest level for five years.
The mortality rate also declined last year, stretching life expectancy for
Italian men to 80.2 years, and to 84.9 years for women.
“We are very close to the threshold of non-renewal where the people dying are
not replaced by new-borns. That means we are a dying country,” Health
Minister Beatrice Lorenzin said.
The government of Prime Minister Matteo Renzi is scrambling to give the
economy a boost by reforming the sclerotic labour market and persuading the
country’s youth not to migrate and work abroad.
The demographic picture varies wildly between Italy’s regions, with the
autonomous northern area of Trentino-Alto Adige enjoying a total fertility
rate of 1.65, higher than euro zone peer Germany.
But the population is shrinking in most of the poorer south, where per-capita
gross domestic product is about half that in the centre and north.
France Net Positive Birth
Rate
In France the birth rate is 12.49/1,000 population whereas the death rate is
9.06/1000 population and immigration is 1.09/1,000 population as per.
The above from France
Demographics Profile 2014
Explaining Birthrate Demographics
The largest eurozone country (Germany) and the fourth-largest (Spain) are in
population deflation while the third-largest is on the cusp.
Economists are screaming for politicians to "do something". It
would help if they figured out the cause first. But that's not the way of
either economists or politicians.
The problems are obvious but economists have not figured it out. Forget the
studies, here are some key factors:
- Youth unemployment
- Pension promises that cannot and will not be met
- Work rules
- Changing attitudes
- Central bank actions
1. Youth Unemployment
The above from Eurostat
Statistics - Youth Unemployment
How the hell are you going to get married, buy a house, and start a family
when youth unemployment is at record highs above 40% in several countries?
2. Pension Promises
The system is designed to fail. The youth are supposed to pay for the
pensions of the retirees. How is that supposed to work when the youth have no
work? Most millennials understand the pension and healthcare obligations they
fund for their elders will not be there for them or their kids.
3. Work rules
Order workers and pensioners do not want to change the rules making it easier
to fire workers or reduce pensions. If someone cannot be fired, they will not
be hired in the first place.
4. Changing attitudes
Without a doubt kids are putting of marriage and family formation longer and
longer, even in countries like Germany where jobs are relatively plentiful.
Why? Various reasons include: the need to take care of their elders prevents
or discourages new household formation, the nannycrat society where the state
takes more and more of ones wages, real wages are in decline, and home prices
are not affordable.
5. Central banks actions
In the foolish attempt of central banks to beat deflation, asset prices
(especially the price of homes), have risen well beyond the affordability
range of millennials. In short, attempts by central bankers to force
inflation in a technological and demographically deflationary world is highly
counterproductive.
Synopsis
Kids intuitively understand various public pension and social security
systems are on their last legs. If the system will not protect them, if will
not protect their kids either.
Many millennials saw their parents or friend's parents loser their home in
the financial crisis. They do not want to be in the same boat.
The monetary actions of central banks, and the fiscal stimulus and
protectionist actions of governments are for the sole benefit of the already
wealthy, to the detriment of the shrinking middle class.
Fewer and fewer millennials can afford to bring up kids in this environment.
Mike "Mish" Shedlock
