Wednesday, January 28, 2009

Women, Economics and Population

Like most Americans, I am concerned about the economy these days. I worry about finding a job when I finish my MBA, whether inflation will spike, if prices will skyrocket, if interest rates will soar. I felt a surge of confidence in President Obama when he declared that it will take a lot of work, and the passage of time to solve our economic problems (as opposed to the Bush school of thought which relied on "quick fix" solutions). The stimulus package that Obama is proposing will inject funds into a wide variety of areas, which will create symmetrical growth, as opposed to lopsided growth, which occurs when the top 1% of the upper class get tax breaks and everyone else gets nothing.

So of course, the Wall Street Journal has to express outrage over every item in the bill, and this particular ripost really struck me as a mouthful of vituperative nonsense: Speaker Nancy Malthus

One of the more curious items in the $825 billion House "stimulus" is $87 billion to help states with Medicaid, specifically including an expansion of family-planning services. The implication is that more people mean less economic growth.

Following a White House meeting with President Obama on Friday, Republican John Boehner, the House Minority Leader, asked how spending millions of dollars on birth control will help stimulate the economy. On Sunday, George Stephanopoulos of ABC's "This Week" repeated the question to House Speaker Nancy Pelosi, who responded that "family planning services reduce costs."

She added: "The states are in terrible fiscal budget crises now, and part of what we do for children's health, education and some of those elements are to help states meet their financial needs. One of those -- one of the initiatives you mentioned, the contraception -- will reduce costs to the states and to the federal government."

The notion that a larger population will produce a lower standard of living can be traced to the 18th-century economist Thomas Malthus. But during Malthus's own lifetime, his prediction was proved false, as he later acknowledged. Population and living standards rose simultaneously, and have continued to do so.

Ms. Pelosi's remarks ignore the importance of human capital, which is the ultimate resource. Fewer babies would move the U.S. in the demographic direction of Europe and Asia. On the Continent, birth rates already are effectively zero, and economists are predicting labor shortages in the years ahead. In Japan, where the population is aging very fast, workers are now encouraged to go home early to procreate. Japan is projected to lose 21% of its population by 2050.

The age and growth rate of a nation help determine its economic prosperity. A smaller workforce can result in less overall economic output. Without enough younger workers to replace retirees, health and pension costs can become debilitating. And when domestic markets shrink, so does capital investment. Whatever one's views on taxpayer subsidies for contraception, as economic stimulus the idea is loopy.

Let's start at the beginning: "The implication is that more people mean less economic growth." While this initiative could be interpreted as a Malthusian move, it is not a logical interpretation. By expanding family planning services, the stimulus package is not calling for a reduction in reproduction. This is an issue that Republicans constantly fail to understand. Wrapped up in the idea that all Democrats want on-demand abortions in every city, the right wing does not grasp the important of family planning, or what family planning actually entails.

Family planning, provided by many health care facilities, most notably Planned Parenthood, includes many programs. It includes reproductive health check-ups for women, such as annual gynecological exams, screenings for sexually transmitted diseases, and pap smears. Additionally family planning includes providing contraceptives to women and their partners (yes, family planning does apply to men as well), which helps prevent unplanned pregnancies. For women who want to have children, family planning means tracking ovulation and helping women manage their health to increase their chances of having children. For pregnant women (and their partners) family planning clinics provide pre-natal care and sometimes birthing facilities. The truth is that family planning views abortion as a "final option" and focuses instead on the health of women, pregnant or otherwise.

Now that we've cleared up the issue of abortions (because reading the comments for this article included phrases such as: we are already short some 50 million people who because of past abortions will never be paying in--and Pelosi, like Obama, wants to increase abortions?), I want to draw out the point of the previous paragraph: family planning does not mean the population will decrease. Instead, it helps women and their partners make healthy choices about when to have children, and how many to have. Family planning is not family destroying.

This is an important point, because some people commenting on the article were convinced that the family planning funded was directed at minorities, for the purpose of sterilizing non-whites to keep them from reproducing.

Can anyone say "eugenics"? Margaret Sanger supported eugenics as a method of genetic cleansing when she began Planned Parenthood years ago, all in an effort to rid the world of the black population. Adolf Hitler had the same philosophy. Pelosi's statement is sugared with politically correct language, but when you push all that aside, her world view is no different.

Margaret Sanger
did support eugenics, but her stance on birth control was about empowering women by giving them control over their reproductive systems. And that point is where we can start talking about economics.

If women have control over their reproductive systems, they can delay giving birth to children. Instead of bearing children at a younger age, these women can educate themselves and pursue well-paying careers, and in the end, contribute more to the national economy. Imagine for a moment, a 17 year old African-American woman (this is a high risk category for teen pregnancy). She becomes pregnant by her boyfriend, and as a result, drops out of school. Without a high school diploma, she is unable to find work that pays more than minimum wage, and she works as a cashier in a convenience store. She has no money for child care and relies on a network of friends and family to help her raise her daughter. Because she earns so little, she lives with her family in a too-small apartment. This is a fictional portrait, but you can see where this leads. Low wages, little or no benefits including health care, and bills from all sides. And should she have another child, the pressure on her paycheck will only increase.

Now imagine that this woman had access to family planning. She doesn't become pregnant at 17; instead she finishes high school and goes to college. She earns a degree in biology and goes to medical school, providing a valuable service in the health care field. She is able to save her money, and buy a condo. And when she is ready, she decided to have two children, and plans for them, so she is able to provide a stable environment for them.

As a minimum wage cashier, this hypothetical woman contributes little to GDP. She lives paycheck to paycheck, has little purchasing power and produces no final goods or services. As a doctor, she has far more purchasing power, and can contribute to spending in real estate, automobiles, and retail. She is providing a service to people (a much needed service), and her output contributes far more to GDP. And she still has children, so there is no depletion of the population in the US.

Republicans are jumping all over the stimulus package to say that Obama is wasting money, spending it on unnecessary measures. What Obama is really doing is improving the living standard for those in lower economic brackets. And when the standard of living rises, economic growth follows.