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Archive for Wednesday, May 5, 2004

Demographics may drive policy decisions

May 5, 2004

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— A panel of the great and the good from Europe and the United States recently drew up an elegant blueprint for remaking the Atlantic community. With apparent insouciance, they settled the hash of disunity over Iraq, looming trade disputes and American ambivalence over the European Union's determination to have its own defense and foreign policies.

You can and should read all about it in the Council on Foreign Relations' paper, "Renewing the Atlantic Partnership" (available for Webnauts at www.cfr.org). What you won't read in that report is a missing paragraph about the demographic changes in Europe and America, even though these changes are widening the economic and political divides in the world's most important partnership.

You won't read about the growing weight of Muslim minorities in Europe and of Hispanic and Asian populations in the United States, which will inevitably show up in domestic and foreign policies on both sides of the Atlantic. Perhaps even more consequential is the astonishingly rapid aging and shrinking of the populations in many of Europe's main countries, while in the United States' continued population growth feeds economic growth.

The subject was just too thorny to be tackled in a brief summary, according to several of the panel's 26 members -- in contrast to war, protectionism, or the greater Middle East. So a proposed paragraph on changes in the ethnic and social composition of populations on both sides of the Atlantic was left on the cutting- room floor.

There are good reasons for caution in talking about policy-related demographic changes, as we will see. But the silence the experts stumbled into on the subject is instructive. Like individuals, nations try to avoid thinking about aging, its costs and consequences. We whistle past the rest home as well as the graveyard.

But it is vital to recognize that much of Europe is turning into a continent of geezers, however much it hates, just hates, talking about it. And countries such as France and Germany hate, even more, making the changes geezerhood mandates -- the most important being whether the welfare state will cut its generous benefits, raise its exorbitant taxes to meet tomorrow's rising health costs or make people work longer before retiring.

Europe is also loath to engage in much examination of its restrictive immigration policies, which help curb population growth and economic renewal. (As always, Britain is an exception.) Not even this weekend's enlargement of the European Union to 25 members will bring much immediate relief, since Germany has led the way in keeping up walls against population flows from the east and south.

I can sympathize with the historians, ex-diplomats, economists and other experts on the New York-based council's panel. They wrestled with and walked away from slippery census numbers on the race and religion of population groups. We actually don't know if the number of Muslims in the United States is closer to 2 million than to 7 million, or whether in France 5 million Muslims is a more accurate count than 10 million. Those commonly cited ranges cover a multitude of unknowns.

But good numbers on some little-remarked societal forces do exist. Across Western Europe, the median age of the work force and the population at large is steadily rising, as life expectancy increases and fertility rates drop below the 2.1 children per couple needed to assure population growth. The birth rate is now 1.4 in Germany and even lower in Italy and Spain. (Consider this: One half of all union members in Italy are retired and drawing pensions.)

The median age of voters in Europe today is 46 to 47 and will be 50 by 2013, according to reports presented last month to a meeting of the council for the United States and Italy held in Venice. "There is no time to waste for politicians who must cut pensions and other benefits before their governments go broke. It only gets harder from here," said one economist.

Karl Lauterbach, a German expert in demographics, asked the group: "Who will want to invest in an aging and shrinking population? Germany risks losing one-third of its natural economic growth because of these trends. From 1970 to today, 10 million German children we would have expected in other times were not born" and will not be available to work in 20 years.

The United States faces problems in its Social Security system, but they are relatively small compared to the society-bending changes in store for Europe (and for Japan). Demographics, and the aging of nations in particular, deserve to be on any trans-Atlantic agenda today.




Jim Hoagland is a columnist for Washington Post Writers Group.

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