No Echo for the Echo Boom
Posted On August 22, 2011
Millennials were first known as the “Echo Boom” because they were an echo of the Baby Boomers. As Boomers reached child-bearing age, their fertility rates (births per woman) were not particularly high, but the sheer size of the Boomer generation ensured that their offspring, the Millennials, would echo the population boom of their parents.
Now that Millennials are reaching child-bearing age, fertility rates are shrinking even further. A recent Advertising Age analysis of census data shows that birthrates for women in their 20s declined more in the last two years than any time in the last three decades. In fact, the only age for which birth rates are increasing is 40-44.
A combination of cultural changes and economic factors are responsible for the decline. And the ramifications of a prolonged “baby bust” are not good for economic growth, as it would lead to an “upside down” demographic structure in which a shrinking younger working population is increasingly relied upon to support a growing majority of older retirees, similar to the situation in Japan. More immediately, shrinking birthrates mean less consumer spending in an economy that is in desperate need of more consumer spending.
Ad Age has a modest proposal, though. Baby Boomers could transfer some of their considerable accumulated wealth to encourage, i.e., finance, procreation among their children. In other words, they can offer to foot the bills for their grandchildren if their Millennial children want to start families. That might break us out our negative population and economic cycles, but we won’t be holding our breath waiting for it to happen.