The Depopulation Bomb And College
Demographics is a faily simply process. Simply look at the fertility rate and extrapolate that over a series of years or decades. Of course, there will be volatility as the numbers change periodically. Nevertheless, it is a powerful guide as to where countries (or sectors) will be in coming years.
Toys "R" Us was once a familiar toy store. It filed for bankruptcy in 2017 and is now a shell of itself. This was hit by two factors: declining amount of children along with the shift to online shopping. The former is going to hit another category as we will soon see.
What happens when there are less children to buy toys for? Obviously, any company that is tied to that market will suffer. Of course, this was predictable as companies that catered to infants and toddlers saw the same fate.
We only need to follow the progression to see where this ends up.
College Implosion
In the United States, there is going to be an implosion of colleges. We will start to see this in the next few years. There are, of course, a variety of factors at play. A couple are:
- costs have gotten to the point where many cannot make an adequate return with salary increase. Covering $100K-$200K worth of debt is rather difficult.
- male participation rate dropping at an alarming rate. This is slated to go under 40% in the next couple years.
We can argue the politics all day long. However, the fact is men are simply not carrying on their eduction. Many are making due with going to an apprentice program or trade school, fields that can offer high pay without the debt.
The sad part is those who are entering college, unless they are going for more advanced degrees such as legal or medical are finding they have huge debt and no future career prospects. Most of the degrees out of these institutions are worthless.
Yet somehow people are suckered into paying big money for a degree in art or ancient Irish poetry. While they might be interesting and worthwhile fields, the idea of spending $100K with the expectation of gainful employment at something other than a museum is insane.
Of course, this is only part of the equation. The biggest factor is the demographics.
Just like Toys "R" Us found out, when there are less people in an age bracket that can bit you in the ass.
College administrators shutter at the year 2025.
Millions Less Students
Here is a demographic chart for the United States. It is a bit old, dated in 2020. Hence we will have to focus upon the lower rungs.
Source
The 25+ categories were the last of the Millennials. They were the second largest generation ever so the decline is inevitable.
After that, the protential college student market drops. Notice the next sections after the 20-24 category. They considently drop. What does this means for colleges over the next couple decades?
We are gaining some insight:
They will join the list of 35 colleges that closed their only or final campus in 2021, and 48 more in 2022, according to an analysis of federal data by the State Higher Education Executive Officers Association.
Obviously the top institutions like Harvard or MIT will not be affected. The same is not true for mid-tier or second layer schools. They will meet the same fate as the 83 lists in the above quote.
Nathan Grawe, an economist at Carleton College in Minnesota, predicts that the college-going population will drop by 15 percent between 2025 and 2029 and continue to decline by another percentage point or two thereafter.
This is a huge hit. Can you imagine wiping 15% of the colleges in the United States off the map? Then reduce the amount by 1%-2% from then on.
Keep in mind, this is likely only factoring in the demographics. If there is another factor such as online/cert training like we see in the technology sector, this could bring another wave as the percentage decline increases.
The business of college is going to face some major headwinds.
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Nativists are fools. We need more young immigrants. A lot more.
The problem with that, and there are many, is that you end up destroying local cultures and it radically shifts the norms of an area. This may not be the worst thing but let's take what's happening in Holland right now. The farmers in Holland are the 2nd largest producers of agriculture in the world and they are getting swarmed with immigrants and the population of locals is being crushed in various ways like suicide and others. Those immigrants are likely not going to have the background and knowledge that the Dutch farmers have and the criminals in the government want them to replace the local farmers. This will have untold consequences for many years to come on the food supply and local economies and politics.
I don't disagree that immigrants are important however there are a lot of things to consider when we talk about immigration.
The other end of the coin, what happens to the countries and places that are losing young people in droves? If you are a grand parent and all of a sudden your kids and grand kids all leave you and travel 2,000 miles or more away to live in a different country and don't visit you, and that happens to entire towns/villages that completely decimates the population in the original country. It also destroys the healthcare, tax base and many other factors as well.
Immigration is not the solution! Getting ways to increase the baby population is the best solution for these challenges.
Not really a problem. Lots of young people there, so they can afford to lose some. If you’ve got six kids, it’s fine if two of them leave and send money back to you.
Um, yeah. That’s been tried. It hasn’t worked. Women in high-income countries mostly do not want to have lots of kids.
Well I feel sorry for your way of thinking because this is why we are getting decimated in terms of population. Hungary has enacted a decent way to combat this and has had success in enough that it’s stopped the shrink of the population. It encourages birth rates for those that want to do it and is likely going to be one of the best ways, not the only way, but an effective way to turn things around. It’s a shame the United States has such a negative view of children right now.
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I have no desire to follow the lead of an authoritarian like Viktor Orbán.
The reality is that most developed countries are facing a similar, or worse, demographic crisis than the US. Hence, you are not bringing in those typically with the foundational education.
This means the immigration being brought in is of low skill value. It is what Germany found out. With China, the EU, Japan, and many other countries facing the demographic issue, they are not likely to send educated people to the US for schooling (except maybe to head back).
What we are left with is another situation whereby you are looking at a generation to get the economic productivity. Immigration becomes a positive when the kids of immigrants, those who grew up in the culture and, more importantly have the contacts, enter the workforce.
Hence, while the first generation works manual jobs, their kids end up bringing the higher value skills to the table. This is why a steady stream over decades is important.
So while the nativists are foolish, so is the idea to just import everyone. The EU is in collapse (for many reasons) and this is only going to enhance it.
Finally, there is one major solution on the horizon for the US: Mexico.
It is becoming a larger trading partner and has ideal demographics. They have a lot of young people and not a great education system (at the upper levels). This sets the US and Mexico up as great allies. The high end design and engineering is being done in the US while the production (and going forward) a growing amount of consumption, is going to occur in Mexico.
This is a similar approach as Japan is taking with Vietnam.
In the end, this doesn't bode well for colleges, at least the tier that is in jeopardy, but could handle some of the demographic issues the US is confronting.
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My first thought is:
I don't think having less kids ever helps. I was in that Generation X with less kids. It just means less programs and more teachers getting laid off or no new professors being hired so the faculty become a bit aged. I would like to see some hope of tuition break or incentives but I don't think that will happen.
Here in Korean elementary schools there is a great drop in the student population. I don't think anyone is ready for it. When it happens it will be like that stuff just hit the fan.
Depopulation is a problem that the overpopulationists never mention.
Yes I am of the same generation and saw a number of the schools in the area I grew up, both public and private, close down.
Some ended up reopening as the Millennials went through but were closed again as the next generation, which was smaller, hit those ages.
This ends up filtering through all stages of the economic cycle.
The EU is facing massive pension and social issues as their populations age with many fewer kids to replace them. Countries like Germany and, ironically, Russia, are demographic time bombs.
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The colleges are too expensive now and the increased cost of education just keeps going up. It doesn't make sense and I only took part in college due to the financial aid but I probably wouldn't decide to take the debt. It doesn't make sense and I don't think the depopulation crisis will only make things worst.
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It is similar to healthcare.
When there free money handed it, prices only go up.
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Uhhh don't get me started about this issue... I see it's happening all around the world, in "developed" countries. I didn't know it was that serious in the US also, but in EU is catastrophic.
I live in Croatia, and we had a huge drop in population in the last decade - we lost 10% of the population. It was all young, highly educated, people searching for a job in their field. Compared to decade before where we had a 5% drop. And we were a country at war 3 decades ago, and even then things weren't so bad like today.
Today we have an influx of cheap labour power from the eastern countries which started with the war in Syria when refugees flooded the EU, and it continued with workers from India, Bangladesh and similar, overpopulated, countries.
They're not bad people, they're hard workers, but they don't spend the money they earn here, they send most of it to their families back home. And they work at the low paying jobs, like construction workers, delivery guys, janitors and jobs like that.
Now we have a big hole in higher paid jobs (which are not that highly paid as they should be, btw) like doctors, engineers, teachers. Jobs you need a good college diploma for.
Then, you have people that actually stayed here, work here, have their diplomas, but they don't have children, or have just the one, because it's "too expensive" to have a child in today's economy.
I put quotation marks because I have five children, I have computer science diploma, my wife is a dentist, we both finished best schools in the country, but we're not thinking about moving out, or complaining how it's too expensive to have a child today.
Ok, I'm not going to be a millionaire, I'm fine with that. I just want to provide my children a decent childhood, best education they can get, so they can fend for themselves when they grow up.
But our government, and I see now it's not just ours - it's like a new world pandemic, doesn't care about keeping our people here. Schools are closing down due to lack of students and teachers, high tech companies are shutting down due to lack of quality workforce, not just high tech, many companies that produced something of a value.
We turned into a country of pensioners and immigrants.
As you can see our demographic chart is terrible.
Sorry for this long comment, and stepping out of the topic a bit. It's just so frustrating.
What you state is absolutely true and something the politicians and talking heads on television never mention.
As I stated in an above comment, the first generation is unskilled and tends to gravitate towards the lower end, manual jobs. The economic impact is felt when their kids, the ones who are schooled and have the contacts, enter the work force. That is where the boost in productivity enters.
The problem with the pension is you end up with an upside down economic situation followed by social unrest. The only thing politicians know (around the world) is how to grab more money. This means increasing taxes on those working.
When enough of the remaining younger people get taxes to death to support the older generations, they rebel.
We see this in China as there is a movement called sit down or something like that. The generation basically just says we are not going to bust our ass to support those who went before us (and screwed it all up).
That can quickly become a problem.
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As someone who is on the verge of entering an MA program, after a 9-year hiatus, i can attest that there are many other factors that limit enrollment in advanced education than just the demographics issue you point out - as well as the insane tuition and fees costs that have been parabolically jacked up through government intervention in the education industry.
I think online education will only continue to grow, through companies like Udemy, Coursera, and others, people won't have to pay a government institution for a diploma or certification.
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I am eagerly awaiting the implosion of colleges. Die college! Die!
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