In his big, bold “One Minnesota” budget proposal — or is that “Won Minnesota?” — Gov. Tim Walz hasn’t left many needs unmet.
But two proposals stand out as grappling with particularly elemental social and economic challenges that are intriguingly interrelated.
First, Walz wants to cut state taxes on older Minnesotans’ Social Security benefits. But he proposes to do this somewhat cautiously, merely increasing an adjustment from federal rules the state enacted in 2017. He’s not so far signing on to complete state exemption of Social Security income, a politically popular idea, especially with Republicans.
Meanwhile, however, Walz would rather boldly boost benefits for younger adults with children, particularly through a paid family leave program, which would give workers up to 12 paid weeks off a year to bond with a new child or care for a sick family member.
The large reality underneath these issues is our much-discussed aging society — a thing discussed so much and so casually that we grow numb to its significance.
Like the rest of America and most of the developed world, Minnesota is quietly, before our eyes, becoming a kind of society the world has never really seen before — one with more elderly than schoolchildren “for the first time in history” as the Minnesota Demographic Center puts it.
United Nations research estimates that the “total dependency ratio” — a measure of a society’s combined population of kids and codgers as a percentage of its working-age adults — has actually fallen in North America and Europe since the baby boom heyday of the 1950s and ’60s. But the “aged dependency ratio” has risen. And it will continue to rise in the decades ahead, causing the total dependency ratio to soar as the boomers grow old.
There’s no mystery about the trends driving this transformation. People are living longer while producing fewer children. Almost all the transformative tendencies of modern life have combined to fuel the gray tide.
Take health. Life expectancies have been rising since the mid-19th century. But until the last 30 years or so, it was mainly basic “public health” improvements (sanitation, above all) — along with antibiotics and vaccines — that lowered death rates, mainly among children and adults in the prime of life.
Only in recent decades has high-tech medicine produced rapid extension of survival in old age, a trend reinforced by the advent of Social Security and Medicare — huge public programs enhancing the prosperity of both of the aged themselves and of the health care industry focused on their needs.
From 1900 to 1990, life expectancy “at birth” for white American males rose much faster than remaining life expectancy for 60-year-old men (a 51 percent increase vs. 30 percent).
But since 1990, remaining life expectancy at age 60 rose about three times as fast as life expectancy at birth.
In short, not only are there more elderly people around than before, but the old are getting older.
Meanwhile, birth rates are falling throughout the developed world, especially in places like Russia and Japan, and faster in Europe than America. But America’s birth rate has reached an historic low, and has fallen below the “replacement rate” of two children per woman — meaning only immigration will keep America’s population from declining.
An impassioned line of thought sees global overpopulation as a greater threat, but in the advanced world, falling birth rates, stagnant workforces, and swelling populations of frail elderly relying on taxpayer-funded public programs promise a challenging, potentially distressing future. (Another much-discussed trend, Minnesota’s worker shortage, is a preview, as was noted last week by state finance officials in their somewhat downbeat forecast for state budgets in the years ahead.)
Vast trends in modern life are at work here, too, undermining the economics of parenthood. We sentimental moderns don’t like to think of family as an economic institution, but economics matter.
In traditional, subsistence societies, farming or hunting/gathering for a living, children were (are) vital economic assets for their parents — for their labor from a tender age, and as the only retirement plan going later on. But with industrialization and the shift to a skilled wage-labor economy — and with child labor laws and compulsory schooling limiting childhood economic contributions — offspring steadily have become mostly an expense for parents.
Add in the other toil and sacrifice of parenthood — including, as has often been quipped, the fact that this increasingly crushing expenditure may one day announce that he or she hates you — and falling birth rates are not impossible to understand.
Public policy finishes the job of (economically) devaluing parenthood. This was memorably explained in “The Feminine Economy and Economic Man,” published in 1997 by economist Shirley Burggraf. She argued that Social Security and Medicare had profoundly reduced the effective payoff for raising dutiful children. The social insurance programs have done this by giving all elderly Americans the right to receive support from other people’s children (that is, from taxpayers) — even if they raised no supportive children of their own.
To restore some of the traditional incentive for raising able, loyal children, Burggraf proposed replacing old-age entitlement programs with what she called a “parental dividend” — a legal claim against the future earnings of one’s own offspring, but no one else’s. Those who raised no children would have to make other retirement plans.
It was a revealing idea, not a politically feasible one. What it reveals is that we suffer essentially a “public good” problem with our falling birth rates. The broad public needs more children to be raised than potential parents nowadays have private economic incentives to deliver.
Make no mistake: We all need other people’s children, and not just to pay into Social Security and Medicare. When you call for a cop, or a firefighter, or a plumber, or a home health care worker, etc., etc., etc. — it’s virtually always somebody else’s kid who shows up.
This is the earthy, unsentimental reason to look sympathetically on something like the paid-leave proposal. It’s certainly arguable that such a program should be funded through general tax dollars, not through a payroll tax on employers, as is currently proposed. That could discourage job creation, especially since merely establishing paid leave, however it’s funded, will lead to a lot more leave being taken, with all the disruption that will necessarily bring to workplaces.
But while debating details, we should be open to ideas for making it a little less economically daunting for all those somebodies to raise the kids an unprecedented codger population will need to call upon.
D.J. Tice is at Doug.Tice@startribune.com.