Census Data A False Spring in Maine’s Demographic Winter
Eleven years ago, Maine Policy Institute issued an ominous warning to the people of Maine: Demographic Winter is coming. In our report The Fiscal Costs of Maine’s Demographic Winter, we warned that Maine was facing a difficult economic future due to declining birth rates and an aging population, which threatened the future prosperity of the state.
It was a somewhat counterintuitive argument to make, because most people today believe that it is actually “overpopulation,” not decreasing population, that is the fundamental problem we should be concerned about. That belief couldn’t be further from the truth.
The obsession with “overpopulation” stems mostly from the 1968 publication of The Population Bomb by Dr. Paul Ehrlich, an entomologist at Stanford University. The book noted radically increasing global population numbers since 1900, and predicted calamity. “Hundreds of millions of people are going to starve to death,” he wrote, predicting worldwide famine as food production failed to keep up with population growth. “Nothing can prevent a substantial increase in the world death rate,” he wrote. Armageddon, to Ehrlich, was right around the corner, and unrestrained population growth was the cause.
In reality, global population numbers have continued to rise significantly in the past several decades, yet none of his apocalyptic predictions have come true. Global prosperity and living standards have risen dramatically, with more than 1 billion people being lifted out of extreme poverty in just twenty years, thanks largely to an expansion of capitalism and free trade. Mass famine never materialized either, with Norman Borlaug’s creation of semidwarf wheat being responsible for feeding billions.
But there was something more fundamentally wrong with Ehrlich’s book beyond just some lousy predictions of the future. He failed to analyze already apparent downward trends in national birth rates in the world’s largest economies. He also failed to anticipate that developing countries like China would experience the same phenomenon as they industrialized and embraced markets.
Together, these twin problems have created an unprecedented demographic collapse worldwide. Thus, the issue that we should be most concerned about is actually depopulation, not overpopulation. Projections from professional demographers now predict that the global population will peak at just over 10 billion, and then begin to fall, and fall rapidly towards the end of this century. But even that is misleading, because fertility rates in much of the world are already well below what is known as “replacement level,” which is the rate at which a nation’s population replaces itself and holds steady, and the global growth we do have is being propped up by higher rates in developing countries. These rates, though, are themselves falling rapidly.
For the industrialized world, the replacement fertility rate (a factor of the “total fertility rate”) is roughly 2.1 live births per woman, though that number can be higher elsewhere due to higher mortality rates from war and disease. According to the World Bank, the United States now has a fertility rate of 1.6 live births per woman, well below that replacement level, and down from 2.5 when Ehrlich wrote his book, and 3.7 in 1960.
The situation is no better in the rest of the world. The United Kingdom has a rate of 1.6 live births per woman, while the rate is 1.5 in Germany and Russia. Speaking of Russia, it is experiencing what The Economist is calling a “population nightmare,” driven primarily by those exceptionally low birth rates, and made worse by the estimated 2 million people that have been lost in just the past few years as a result of war, disease and outmigration. Things are even more shocking in Spain and Italy, where the rate has dropped to 1.2 live births per woman. The “healthiest” population situation in Europe is in France, where there are 1.8 live births per woman.
Things are even worse in Asia, with both China and Japan sporting rates of 1.3 live births per woman (some estimates actually peg it lower). In China last year, deaths outnumbered births for the first time in six decades, and the United Nations is now projecting that China will lose 110 million people by 2050 and fall from a population of 1.4 billion to roughly 700 million by the end of the century. Japan’s population, which peaked at about 128 million in 2010, is expected to decrease to less than 100 million by 2048, and fall further to 86.74 million by 2060.
All of this, together with a rapidly aging population, is already causing massive economic disruption, and things are about to get worse.
Which brings me to Maine.
Birth rates in Maine today are among the lowest in the entire country, with only Rhode Island, New Hampshire, Oregon, Massachusetts, and Vermont having a lower fertility rate. According to the Centers for Disease Control, Maine now has a total fertility rate of 1.45 live births per woman, and started to see more deaths than births twelve years ago. Though Maine was among the first places in America to experience this phenomenon, today roughly half the states in the country, and a majority of counties, share the same grim demographic reality.
Fewer children being born coupled with increased life spans have also meant that the average age of a Maine citizen, which was 30 years old when I was born in 1980, has now increased to 44.8 years old in 2020. A full 21.7 percent of our population is now aged 65 and older. Not only are there fewer younger workers to earn taxable wages, but there are more people that require some form of government assistance, which will have catastrophic consequences for Maine’s budget in the near future. The problem is only going to worsen over time.
Recently, though, there have been some attempts to paint over these existential problems, and claim that “good things are happening” in Maine on the population front.
A recent report in The Maine Monitor, for example, notes post-pandemic demographic trends in the state, cheerfully talking up the unexpected spike in population driven by immigration. The Pine Tree State gained 34,237 more residents between April 1, 2020 and July 1, 2022, though the net increase in that period was just 22,999 people due to higher rate of deaths than births in the state. As of July 1, 2022, Maine’s population stood at 1,385,340.
It is unclear how accurate those numbers are, though, as there is no true accounting of foreign migrants in Maine. More than 1,000 asylum-seeking individuals have come to the city of Portland since January, for instance, so it is possible that the population increase is higher than what has been reported.
Whatever the reality, the numbers we do have suggest a significant migration spike above normal. Between 2010 and 2020, Maine’s population grew by only 2.6 percent, meaning that average growth experienced in the state was only 3,399.8 people per year prior to the pandemic. If that rate had held, Maine would’ve seen an increase of only 7,933 people, rather than 22,999 people, over the aforementioned period. That means we have seen a 189.9 percent increase over typical population growth.
Ultimately, these recent migration numbers are masking the net loss in natural population due to deaths outnumbering births. The question has to be asked, though: do we expect this to continue?
I certainly don’t.
Maine experienced a temporary influx of “COVID transplants” during the pandemic, given the comparatively inexpensive real estate prices and perceived safety of a large and sparsely populated state. But those trends are unlikely to hold, with a self-induced and ever-worsening housing crisis, dramatic spikes in the cost of living, and the continued economic strain that Maine’s out-of-control budget places on Maine citizens.
But optimism abounds, with media outlets in Maine beating the drum loudly for years, claiming that migration is the solution to many of Maine’s problems, particularly our stubborn workforce shortages.
The Maine State Economist seems to agree, calling the recent Census data “encouraging” in The Maine Monitor piece. “All of our population growth over the past decade has come from migration,” according to a spokesperson for Maine State Economist’s office, “and this is a critical factor for employment and labor force growth.”
But what is really happening here? Can Maine, which has the third-highest tax burden in the nation as a share of personal income, buck the national trend of high-tax states losing residents over the last few years? Can it continue to attract people here, and can those people turn Demographic Winter into a spring melt?
Or is this the metaphorical equivalent of “false spring,” an unseasonably warm day in February that fools you into thinking winter is over?
Unlike actual Winter, the cycle of nature will not save us from the wind and bitter cold. The long-lasting economic fundamentals that have helped to bolster populations of states like Florida and Texas simply do not exist in Maine.
Despite all the optimism we are hearing now, the state’s demographic fundamentals are still an existential threat to its future prosperity. Migration alone cannot make up for a growing labor force participation gap and plummeting public school enrollment that has afflicted Maine since before the pandemic. Even the domestic migration Maine has experienced from other states is of questionable value, as it appears to most observers that those who have come here are not young families, but middle-aged people near or already passed their child-bearing years, closer to retirement than the beginning of their career.
Which means that Maine will continue to be weighed down by its dying, aging demographics, especially as migration to the state inevitably slows down.
There are no easy answers to the challenge of reversing intractable social problems like cratering demographics. Governments have tried everything from gimmicky spending programs to supposedly “make families more affordable” to outright paying people for having children, and none of it has been particularly effective. In Spain, for example, a program which gave a “child allowance” to parents initially appeared to lead to a small, but not statistically insignificant rise in birth rates of 3 percent. Unfortunately, the financial benefit appears to have done little more than encourage women to simply have children earlier, rather than have more of them. In other words, it really just shifted the demand curve forward in time, a little like the child version of the phenomenon we witnessed in the now-infamous “cash for clunkers” program.
Government bribery with cash is not going to work, nor will all of the subsidies in the world that supposedly make it “more affordable” to have children. Even if they did, they would be so prohibitively expensive as to more than cancel out whatever economic benefit society would gain.
Rather than pursue those dead end policies, the far more sensible thing for Maine and other states to do is to transform the way it approaches work, family formation, education, and entrepreneurship. We don’t need to attract more people to Maine, we need to attract more young people, who can not only work and earn, but can have families. We need an economy that can reward those workers with high paying incomes, particularly at young ages, to create a magnet for young people to want to come to Maine.
We’ve seen this happen before. The shale oil boom of the 2010s led to a regional drop in the average age of states in the Great Plains, as young workers rushed to the Dakotas, Montana, Oklahoma, and Wyoming to get in on the high paying jobs and economic prosperity created by fracking. North Dakota experienced a somewhat unbelievable increase of 15.8 percent of its population between 2010 and 2020, adding more than 100,000 citizens in just a decade. Prior to that demographic explosion, it actually had a lower population in 2010 than it had in 1930.
Pro-growth fiscal policies like lower taxes are certainly necessary for Maine to see something similar happen to it. But so too are simple things, like reforming the suffocating regulations which have choked off any possibility of exploiting the unbelievably rich lithium deposit recently discovered in Newry. Maine could theoretically experience a “lithium boom” in much the same way that the Dakotas experienced a shale oil boom, attracting massive investment into our economy while building a young, high-income workforce.
There are other things that can be done, too. But none of it will be possible until the state government gets serious about the problem, and abandons its current strategy of building an expansive government to manage the decline of a once great state.
Instead, it can and should act to unleash the true potential of Maine.