Investor's Business Daily California's Demographic Dilemma: Where Are The Kids? Wed, Jan 16 2013 00:00:00 EA12_ISSUES Posted 01/15/2013 Demographics: Just as baby boomers are reaching retirement or fleeing the state, a dearth of children threatens to turn the Golden State into the golden years state with potentially dire economic consequences. California was once a leader where the "next big thing" would happen and then migrate to the rest of the country. With an economy among the world's largest if it were a separate country, it in a sense still is, having already gone over its own fiscal cliff, beset by low growth, high taxes and regulations, an exodus of business and population, and a staggering debt of unfunded liabilities. As the basic transformation of America promised by President Obama continues, California offers a glimpse into the future of what happens when governments operating on progressive socialist ideas start running out of other people's money. To make matters worse, California is about to run out of those "other people." In 1970, children made up 33% of California's population, a number that's expected to shrink to just over a fifth by 2030, a report by the University of Southern California and the Lucile Packard Foundation shows. That year California averaged about 21 seniors per 100 working age adults. By 2030, that number is predicted to rise to 36% of working age adults. This birth dearth means there will be fewer people pulling the wagon that state government is inviting more people to ride. "These trends are not yet widely recognized, but they should be a wake-up call for policymakers," said Dowell Myers, lead author of "California's Diminishing Resource: Children," and a demographer at the University of Southern California. Indeed, California, the world's eighth-largest economy, and the most populous state in the U.S., is going to shrink, the consequence of policies that has made it less and less a business-friendly state where families no longer can come to and thrive and prosper. The state's birthrate fell to 1.94 children per woman in 2010, below the replacement level of 2.1 children, according to the study, and lower than the overall U.S. rate of 2.06 children in 2012. Immigrants, particularly Hispanics, might be expected to pick up the slack. But the report finds that group is seeing the steepest drop of any group, and its birthrate is expected to fall to the replacement level in 2020. California's Hispanics are a majority in the under 18 category and make up 50.4% of all live births in the state. Some 21% of Hispanic families have an income below the poverty level, while a quarter of Hispanic children live in poverty. That means the fastest growing part of California's population will put demand on state services, while being less likely to provide enough tax revenues to fund the burdensome regulatory and welfare state that has pushed many well-to-do citizens to leave. About 100,000 more people moved away from California in 2011 than relocated to the Golden State, according to the latest report from the U.S. Census Bureau. Some analysts put the number as high as 225,000 a year for the past decade. Many are high-income earners in their prime years seeking greener pastures to raise kids. Of course, it's not all bad. Fewer kids could actually lead to less spending on schools and, in the long run, on welfare. Those who retire to the state to take advantage of its beautiful scenery and high standard of living may not be having kids, but contribute to the tax base. And California remains a high-tech innovator. Still, ex-Californians over the past decade have already put roughly $5.67 billion into Nevada's economy as well as $4.96 billion into Arizona and $4.07 billion in Texas, according to a Manhattan Institute study titled "The Great California Exodus: A Closer Look." And California holds one-fourth of the nation's $2.2 trillion in unfunded pension liabilities — much of it for teacher-union pensions in a state running out of kids. -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
