Throughout President Donald Trump‘s second, nonconsecutive term, pundits across the political spectrum have warned that the economy is on the cusp of mass job losses. They have cited everything from the demonstrable downward pressure on the labor market from tariffs to Trump’s orders for the Federal Reserve, an independent body, to immediately slash the federal funds rate.
But as the nation hits a dangerous economic inflection point, its long-predicted future demographic crisis will not be that we have too many people for too few jobs, as is often warned about. But rather too few people will be available to work at all.
Democrats like to blame the nation’s demographic decline on Trump’s immigration policy. Yet so long as the White House remains focused on deporting illegal immigrants, especially with an emphasis on the criminal illegal immigrants and welfare queens who are overwhelmingly a net-negative on Uncle Sam’s balance sheet, the enforcement of already extant immigration law is not the problem.
Over the year starting July 1, 2024, the Census Bureau found that the nation’s population only increased by 1.8 million people, or 0.5%. That’s about half as fast as it averaged 20 years ago. The core cause is, and always has been, the birth dearth of the last decade.
The birth dearth is a consequence of collapsing marriage rates. While fertility among married women has held roughly constant over the last three decades, it has fallen off among unmarried women. And because fewer young people are getting married, the overall fertility rate has crumbled. This means that whereas the annual rate of the population’s natural increase due to births minus deaths was steady from the end of the baby boom until the 21st century, it began a precipitous decline around the Great Recession.
Now, the nonpartisan Congressional Budget Office estimated that American deaths will outpace births by 2030, meaning that, absent immigration, the population will begin to shrink in four years. Even accounting for the CBO’s immigration assumptions, which lie somewhere in the average between former President Joe Biden’s open borders and White House deputy chief of staff for policy Stephen Miller’s dream to obliterate legal immigration, the number of seniors age 65 or older is slated to increase an average 1.6% per year for the next decade, while the number of people younger than 25 years old will decrease by 0.8% annually.
In other words, we have an increasing rate of retirees aging into socialized healthcare and worker-funded welfare, but a diminishing rate of young people being born and raised into the labor force.
Officially, Social Security’s Old-Age and Survivors Insurance program is not supposed to reach insolvency until the end of 2032, at which point beneficiaries will face an automatic average benefit cut of 24%. Congress will try to kick the can down the road by raiding the Disability Insurance Trust Fund, but even that would only buy the retirement program another two years before reaching insolvency at the very start of 2034, and then would necessitate a 26% benefit cut.
Social Security is not going broke because Congress broke into some nonexistent “lockbox.” Rather, the program was always designed as a Ponzi scheme. This was fine in 1940, when 159 workers only had to shave pennies off their paychecks to fund one beneficiary. It was even theoretically OK when over three workers funded each beneficiary from the 1970s through the start of this century. It’s become a catastrophe as the birth rate has collapsed over the last two decades.
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The only good news is that even though Congress and the rest of the gerontocracy have deluded themselves into believing that Social Security can be saved, when it comes to this matter, the children are actually all right. Last December, a Cato Institute poll conducted by YouGov found that only a third of Generation Z believed Social Security would still exist when they retire, and wisely, those under age 30 seemed keen to let the program put itself out of its misery rather than further indebted the nation to save it. Nearly half of Gen Z supported immediately slashing Social Security to fund the chasm that will come with insolvency in six years, and 60% opposed raising payroll taxes to maintain scheduled benefits, which more under-30-year-olds agreed with only because it is really just a nicer way of saying the same thing.
The wealthiest generation created a federal deficit designed to compound its liabilities on autopilot, and it left it to the smallest generation in a century. The real population bomb was never the nonexistent risk of too many people, but rather a lonely labor force burdened with a federal balance sheet that they will never be able to repay.
Tiana Lowe Doescher (@TianaTheFirst) is an economics columnist for the Washington Examiner.