It’s the day of the Easter Bunny – the ancient sign of fertility – and “breeding like rabbits” is exactly what we are up to.
Traditionally, fertility is celebrated around the spring equinox and, given the fecundity of rabbits, they became a symbol of fertility and of Easter.
The census, which came out last week, reveals that fertile is exactly what we Irish are right now.
First the good news: the population is rising rapidly. This is quite an achievement in the light of the huge levels of emigration. The census revealed that the natural increase in the population was more rapid than at any stage since the beginning of this state.
Now, obviously there is always going to be an echo of the last great demographic surge – the generation born around the time Pope John Paul II visited. These Pope’s Children are now having their own children. As they are a commuter generation, catapulted out to the new commuter counties in the credit binge period, the increase seems to be largest in these commuter areas – a place I refer to in my book The Pope’s Children as the Babybelt.
Unambiguously, new babies and population growth are great signs. Young societies are vibrant, creative and buzzing. Old societies, in contrast, tend to be dull and risk-averse.
One way to look at it is that it is a sign of hope. It is a major thumbs up by parents to the future of the country. Given the financial trauma that this generation, possibly more than any other, has suffered in the past five years, it is a wonderful development. One of the most depressing reactions of a country following a major upheaval is that would-be parents are so traumatised they stop having children. They don’t want to bring children into the world because they have given up hope that the country might provide a decent life for the next generation.
We saw such a reaction across the former Soviet bloc after the fall of communism. In eastern Europe, populations fell rapidly in the 1990s and the birth rate stagnated. I spent time in this part of the world in the 1990s and many people I met, and am still in contact with, are childless by choice. For some, it wasn’t so much a view about the future as the reality of the slump in the economy. They simply couldn’t afford to have children and, as state supports for childcare and schooling fell away, the idea of having a child might have seemed irresponsible to some. But for whatever reason – and these are complicated decisions – birth rates fell.
Thus we should rejoice, as the census revelations are much more important for this society than the promissory note or what the ECB thinks of us, or any of the other economic conundrums occupying our minds. But – and there’s always a but -one needs to look at two of the most important indicators in any economy.
The first indicator is the number of people working relative to the total population. The ratio is collapsing. From 1998 to 2007, the ratio rose, meaning more and more working people supporting fewer and fewer dependants. Now that trend has reversed.
The second indicator we need to examine is how wages fare as a share of total income. Here too, the trend is now going the wrong way for working people. Between 2002 and 2008/9, a full 10 per cent of GDP was transferred from profits to wages. Now this is reversing.
Both these developments have significant ramifications for our ability to pay debts and mortgages in the year ahead.
It is hard to remember right now, with all the recrimination that is going on, but the biggest positive of the credit binge period was the extraordinary surge in the number of people at work and the fact that wages went up rapidly. High wages should be the aim of all societies where people work. Otherwise what would be the point?
The ratio of people working to the overall population in Ireland is plummeting. This is very worrying, particularly in an economy where it seems to be the conventional wisdom to suggest that corporation tax can’t – or, at least, ought not to – rise and where the state has difficulty raising a household charge. If the ratio of workers to dependants is falling, it means that income taxes will have to be higher and higher.
Why is this? Well, because fewer and fewer working people are shouldering the burden of more and more dependants, whether they are the young, the old or the unemployed. This is how a country goes bust because it is trying to squeeze more and more out of fewer and fewer pay packets.
The more you try to tax people and keep welfare payments the same, the sooner comes the point where it’s not worth going to work. At the rate at which the ‘workers to dependants’ ratio is deteriorating, we will approach such a tipping point -without question.
The second trend is the fall in wages relative to total income. Income is shared between wages and profits. As wages go up, profits go down and vice versa. We can see that, throughout the credit binge period, wages as a percentage of output kept rising. This put more and more money in people’s pockets.
Now wages are falling relative to profits. But if wages are falling, where will people get the money to pay back their debts? Indeed, if wages are falling and taxes on wages have to rise because the number of dependants is rising, what will happen to the ability and willingness of people with young children to pay back their mortgages, now in negative equity?
This brings me to the recent statements from the banks about mortgage arrears, which are rising rapidly. The above mentioned trend will continue. We know the banks don’t have enough money to cover these ongoing losses, so what will they do? As for the rise in profits, this means that the return on invested capital is higher now in Ireland than it has been for years – but there is no capital because the banks are not lending. The opportunity cost of the credit crunch couldn’t be greater.
As everyone who has young children knows, the weekly household budget rarely survives the impact of a new arrival.
In the end, the choice for many of the Pope’s Children might come down to paying the mortgage or paying for the children’s lunches. I know which I’d choose.
subscribe.
No doubt David the big bang in residential mortgages is coming and maybe as soon as this year,(I welcome it) with the new baby boom you speak about, the question on my mind is what kind of Ireland are we introducing these little people to, €40,000 in debt the very moment they are born (as reported here recently),what quality of life will they have? they will not know any difference as they will grow up into it, only our reflections on how it used to be will be any indication to them that they did not deserve the raw deal… Read more »
Interesting article. Rather than see this increase in population as some sign of confidence in the future; it might just be that by the time the census was taken (April 2011) the babies conceived in the boom had already been born. It will be interesting to see how birth rates in the years from April 2011 will pan out. It seems fitting that on the 100th anniversary of the launch of the Titanic we should read this article. She sailed out with passengers full of hopes and dreams of the future; similar to an Ireland moving forward full of the… Read more »
Between the mortgage debt, state pensions, Social Welfare payments & civil & public service pensions/wages soon, there will be no money to finance them!
Yet we gave away our oil & gas reserves.
Great country huh!
Interesting graphs. The ratio of employed I had sensed intuitively over the last few years but the ratio of profits to wages should have struck me too. Note 1/4 of last years births were to ´´New Irish´´ mothers. They´re probably thinking it might be bad here now but you should see what its like where I came from and the fallopian tubes wait for no recession. Consider the logic of all the people giving birth during the famine albeit with zero contraception options. Paddy you´ve never had it so good so make another baby.
I am reading the positives from the current trend. And I am also wondering based on what I see, if there might be something else at work. Basically, in countries with mediocre social services, as you look into old agge, having a plentiful supply of off-spring increases your chances of being looked after, when you get older. Nobody expects the HSE to get their act together, now that the money is being squandered on the banks and NAMA. And even when the HSE had money, the HSE was an incapable operation. And maybe also the fact that Irish people like… Read more »
More Tipping Points
“Because when we finally reach the limit of our debt, and it becomes clear that the collateral backing that debt is unable to produce enough yield to pay it back, we’ll have a whole new meaning for the term ‘collateral damage.”
’http://www.shtfplan.com/headline-news/peak-civilization-mit-research-team-predicts-global-economic-collapse-and-precipitous-population-decline_04052012
Good writing David. Your last two articles and Punk Economics 3 have been lucid and educational. Nice work All these little Oisins and Roisins are going to require an education to set them up for the life they face and I mean a proper education. What currently passes for education does not cut it and look where conventional wisdom got some of the parents! If the rest of us have to make sacrifices to support them then that’s fine with me because that is the way a civiilised society ought to function. The new generation will spend a large part… Read more »
In the end, the choice for many of the Pope’s Children might come down to paying the mortgage or paying for the children’s lunches. I know which I’d choose. I had that choice just before Christmas and after it. My wife took some unpaid leave after her maternity leave ended in October 11 , she took 12 weeks unpaid. We had tried to budget our money so we could afford just been on the one wage for those 12 weeks and we had some savings. But it just didn’t work out. So we had the choice of Santa Clause (… Read more »
The herd are having children now, competing with each other, again, another version of the suburban arms race where just a few years ago property, decking, motors and the number of foreign holidays you took a year were all indicators of how ‘successful’ you are. If individuals want to bring children into the world into poverty, that’s their business, but to expect others to help pay for it, well, then it suddenly becomes everyone’s business. I wonder what Freud would make of this latest news, it would probably confirm to him that the Irish ‘herd’ are indeed mad as ever.… Read more »
Is there any hope for Ireland in near future? Well… The last week was quite interesting. I have spent last year by trying to offer solutions to save money and in the same time to improve its quality when the majority of people I had approached did not even bother to reply to me so I asked for help in UK business angel network and the last week when I was having meetings with a new strategic investor from UK (Isn’t it ironic the company comes from Oxford?) and when we more less decided to move our company to Oxford… Read more »
Ya’ll,
completely off topic but I can’t find an answer anywhere:
My brother is heading to Germany to seek work….I’m wondering is he still aloud claim “job seeker’s allowance” while his looking there?
Thanks a mill,
Josey
One reason for increase in birth rates is tis a way to pay the rent.
On the banks solvency it seems to be strange for the banks to say they’ve no money to lend.
The banks are flush with cash from NAMA / ECB / Irish govt.
Monies they have for next to zero and putting to work at higher interest rates too in private investment portfolios rebuilding their capital reserves on the sly and reseting to go again in their fascist ponzi capitalism.
Take a look around David. What educated middle-class people do you see having kids? Just about the only people having kids here now are the Africans and the rest of poorly educated immigrants who claim all the social welfare benefits. Cop on to reality, what use will these people be to us in the future?
Some good news for a change. Now I hope those having children have enough sense to question all the vaccinations and the mass medication such as fluoride in the water, which allegedly cause serious health issues. Who questions the ruling elite and their motivations?
A good comparison to make is between the birth rate in Germany and ours. In ten years time we will be providing labour to Germany so that they will need somebody to do the work for them. They will be no jobs here, our population will be dropping. Our farmers will be providing the food to feed Europe. Our fish will also be feeding Europe. We will have a small workforce, but only in the tourist industry, looking after the Germany who will be coming over to view our pristine countryside and preserved raised bogs. Basically, because the German establishment… Read more »
Watch Fiorsceal tonight at 10.30 in TG4 where the topic of the program will be overpopulation and overconsumption, and the effect of it on the Planet. . I don’t see any sense in having a big increase in the population, when not only the economic but the environmental issues, are clearly showing us that we shouldn’t. Isn’t enough to have an average of two children per family and plan better for their future, and human civilization, so we can create the conditions that can bring about a graceful and meaningful existence, to all the creatures of the globalise world. Where… Read more »
Quite a few comments on here with negative viewpoints on children etc… to my mind it seems many have bought into the propaganda from the elites with regard to (over)population. Some basic sums Current Estimated Population 7 Billion http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_pop_totl&tdim=true&dl=en&hl=en&q=world+population Population densities http://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_population_density Assume a population density like the netherlands of around 400 per square kilometer Land mass http://www.mongabay.com/igapo/world_statistics_by_area.htm You could fit the whole population of the world into Russia If you had all population in one city and that city spread over one fifth of the landmass of the united states you would have 7 billion parcels of land of… Read more »
I posted earlier on not with a negative view on children rather than to point out what the ruling classes can encourage when they feel threatened. Remember what appears fictional today can become the norm over night.Yes the thought of the housing boom going bust along with the establishment banks would have been laughed out of the water back in 2007. Just remember when the shit hits the fan its every man woman and child for themselves.Its a normal human reaction to survival.Its not a pretty concept but its a fact.A bit like the last hour on the Titanic before… Read more »
David, a subtly provocative piece, very skilful writing. Under the guise of an ‘innocent celebration’ you assemble together numerous sticks of dynamite, light the blue touchpaper and scarper……..John Q Public is blunt but right to interrogate and unpack what this actually might means. It could mean anything – depending on your point of view. ‘Confirmation Bias’: we see what we want to see in statistics. There is no ‘objective’ or ‘factual’ interpretation of a census. It means different things to different people. http://en.wikipedia.org/wiki/Confirmation_bias ‘Unambiguously, new babies and population growth are great signs. Young societies are vibrant, creative and buzzing. Old… Read more »
Maybe we can support more people if they alter their lifestyles drastically, but I for one find this article a bit myopic. David Attenborough tells it like it is: http://www.youtube.com/watch?v=wwBgNF_4g7Q
Well, I have to admit, I always thought that the Ethanol project in the US, as a means of keeping down gasoline prices was absolute bonkers.
But now, I am wondering if there is even worse on the way.
http://peakoil.com/alternative-energy/obama-invests-5-million-in-bullshit-energy/
This country is running out money so what will this government do borrow to pay them selves and there cronies,fat cat wages and fat cat pensions.look after your own family yes but what happens when the cost to live here is just out of reach,will we than stand up and be counted,or be trampled into the ground.
I wonder how many people would think that David Attenborough , by saying without trying to coerce or stigmatise anyone, that an increase in world population, with the effect that it is going to have in social structures, resources, the environment, and natural habitats, (where plants and creatures unknown to human beings are already disappearing to give way to more areas for food production and the extraction of raw materials, and with it also we are loosing all the many possibilities that these have to offer us), inevitably is going to increase injustice and suffering, and because of it, he… Read more »