The New York Times has started to publish stories about the population crisis in Europe.  Such stories are a break from population explosion stories and presumably will only get more common for Europe and parts of East Asia in the years to come.

One such story that I came across recently was about Germany, in many respects the canary in the mine when it comes to both Europe’s decline and the political responses to that decline.  The situation is quite dire for the leading European economy:

“In its most recent census, Germany discovered it had lost 1.5 million inhabitants. By 2060, experts say, the country could shrink by an additional 19 percent, to about 66 million.”

This population decline is not a new phenomenon; in fact it has been long in coming:

“Large families began to go out of fashion in what was then West Germany in the 1970s, when the country prospered and the fertility rate began dropping to about 1.4 children per woman and then pretty much stayed there, far below the rate of 2.1 children that keeps a population stable.”

But while Germany’s population decline has been telegraphed for some time, it is certainly not the only country in Europe that will have to face a similar crisis. As the NYTimes states:

“There is little doubt about the urgency of the crisis for Europe. Several recent studies show that historically high unemployment rates — in excess of 50 percent among youths — in countries like Greece, Italy and Spain are further discouraging young people from having children. According to the European Union, the total number of live births in 31 European countries fell by 3.5 percent, to 5.4 million from 5.6 million, between 2008 and 2011. In 1960 about 7.5 million children were born in 27 European countries.

Even before those trends were detected, many countries in Europe were expected to shrink by 2060; some, like Latvia and Bulgaria, even more than Germany. And the proportion of elderly will become burdensome. There are about four workers for every pensioner in the European Union. By 2060, the average will drop to two, according to the European Union’s 2012 report on aging.”

While other countries might not be able to do much to arrest this trend, with the banking crisis, the straightjacket of the Euro and soaring unemployment, Germany is still a country that can spend an awful lot of money trying to get people to have more children.  Unfortunately though, throwing money at a problem does not necessarily fix it:

“So far, though, even while spending $265 billion a year on family subsidies, Germany has proved only how hard it can be [to effect change]. That is in part because the solution lies in remaking values, customs and attitudes in a country that has a troubled history with accepting immigrants and where working women with children are still tagged with the label “raven mothers,” implying neglectfulness… Critics say the country has accomplished very little in throwing money at families in a system of benefits and tax breaks that includes allowances for children and stay-at-home mothers, and a tax break for married couples.”

I’ve said it before; I’m not totally convinced that throwing money at people to have children will work. This is especially true if the entire culture is one of small families, a delayed age for settling down and marrying, and where people lead more atomised and less familial existences.  On the other hand, I can see the merit in trying to take away part of the financial burden for people who may be thinking about having kids. But if people see all their friends having one or two children, if they come from a family of one or two children, is it likely that they will have more than one or two themselves?

A short term solution is to try to employ more of the bulge of older workers who will be hitting their 60s and 70s in the next decade or so – the “baby boomers”. Keeping more elderly in employment will hopefully reduce the cost of a greying population. 

“The German government is raising the retirement age incrementally to 67 from 65, and companies have moved fast to adapt. The share of people ages 55 to 64 in the work force had risen to 61.5 percent in 2012, from 38.9 percent in 2002. Volkswagen has redesigned its assembly line to ease the bending and overhead work that put excessive strain on workers’ bodies. About three years ago, they began using reclining swivel seats that provide back support even for hard-to-reach spots in the automobiles they are building, and the installation of heavy parts like wheels and front ends is now often fully automated.”

Haha, an assembly line with reclining swivel seats for its elderly workers. If only Henry Ford was alive to see that! It will be interesting to see if Germany, and the rest of Southern and Eastern Europe will be able to slow or stop its population decline and how it will cope with the economic decline that it will entail. What I think we can say is that we are seeing something unprecedented happening in Europe right now: large scale population decline in times of peace.

Marcus Roberts was two years out of law school when he decided that practising law was no longer for him. He therefore went back to university and did his LLM while tutoring. He now teaches contract and...