Welcome, America, to the Baby Bust

By John S. DeMott

Unable to find enough young people to flip its Big Macs, McDonald's has launched a recruiting program called McMasters to entice older Americans into staffing its grills and cash registers. Competitor Wendy's offers cash incentives, scholarships and "career ladders" to hang on to teenage employees. Dow Chemical, vilified on college campuses during the Viet Nam War for manufacturing napalm, is reaching out to young people in television commercials that show freshly minted college graduates signing on to help feed the world. Across the U.S., colleges are out hustling for freshmen in innovative ways: the University of Rochester offers a tuition-free fifth year that allows students to explore fields apart from their majors.

Just as the first members of the baby boom are settling into middle age, here comes the downsized baby bust -- and the scramble to adjust to an era of smaller, leaner and less in most aspects of American society. Baby busters are children born between 1965 and 1980, when the U.S. birthrate took a dive, thanks to the Pill, legalized abortion and shifts away from the traditional family. Result: total births in the U.S. dropped from 72.5 million during the postwar baby-boom years to 56.6 million in the bust generation. In 1975 the birthrate sank to 14.6 newborns per 1,000 Americans, the lowest in U.S. history.

The baby boomers have jostled through life competing for education, jobs, housing. When the baby-bust generation enters adulthood, however, it may discover the benefits of doing without: without as much unemployment, without as much demand for housing or cutthroat competition for good jobs, possibly even without as much crime. But the labor force, which will grow at a slower pace, may also find itself without the ability to sustain U.S. economic expansion or support an increasingly elderly population. "Business is going to be discombobulated," says Demographics Analyst Ben Wattenberg of the American Enterprise Institute. "I see the housing industry tearing its hair out. I see problems in the military. I see enormous problems headed this way with Social Security and retirement."

Though the baby bust's impact is just beginning to be felt, by the early 1990s institutions everywhere will be adjusting to the generation's smaller numbers. The change is already apparent in classrooms, where effects of population shifts are usually seen first. With a 13% drop in children ages 6 to 18 from 1975 to 1985, the number of elementary and middle schools in the U.S. declined by nearly 6,000. The typical college-age population of 18-to-24- year-olds has also begun to dwindle,from 30.1 million in 1983 to 27.8 million last year.

College enrollment, however, dropped only fractionally, from 12.5 million to 12.4 million last fall. The schools have adjusted to the baby bust by using remedies that other U.S. institutions may soon adopt: stepping up recruitment and diversifying the population, catering to women, older people and part- timers. Recruitment budgets at four-year colleges have increased an average of 63% since 1980, and while elite Ivy League colleges still have more applicants than they can handle, some schools are spending more than $1,000 a week on television advertising. In Los Angeles, the University of Southern California has tripled its marketing staff and its scholarship fund since 1978. Says U.S.C. Director of Admissions Kathryn Forte: "I don't know where we'd be without the extensive marketing effort we've given to recruiting for the past five or six years." Says Douglas Thompson, dean of admissions at wealthy, selective Hamilton College in upstate New York: "There is a race on. There is a limited pool of students, and we are all competing for and trying to convince them we are the best place to come."

Since the highest involvement in crime occurs among young men from the ages of 15 to 18, urbanologists like Alfred Blumstein of Pittsburgh's Carnegie- Mellon University expected the crime rate to decline along with the number of teenagers. The tail end of the baby boom reached age 16 in 1977, and Blumstein predicted that the crime rate would top out a few years later, followed by a peak in the prison population as the younger hoods got enough convictions to land in jail. Sure enough, after 1980 the crime rate began declining on schedule, and the U.S. prison population is expected to peak around 1990.

That trend, though, seems to have reversed itself: the crime rate rose again in 1985 and early 1986. Blumstein offers this explanation: while there are fewer young males generally, there has been a disproportionate increase of males in the underclass. This group, with all its attendant ills of poverty, alienation and broken homes, is particularly prone to criminal behavior. "What we're seeing," says Blumstein, "is a changing social-class composition, and crime correlates with social class."

Marriage prospects should improve for women in the baby-bust generation. Women tend to marry men a few years older than themselves, and younger women will find larger numbers of potential spouses among the baby boomers. Nonetheless, demographers predict that the smaller cohort of the baby busters will form fewer families, resulting in less demand for housing and household goods. By the middle of the next decade, the number of new households a year could drop to 1.2 million, down from an average of 1.7 million during the 1970s. Says George Sternlieb, director of the Center for Urban Policy Research at Rutgers University: "You simply are not going to have that demand for starter homes that dominated our housing thinking for the past 40 years." That will slow homebuilding to about equal to what it was during the crisis years of the early 1980s. It will hurt retailers of durable goods. By 1992 sales of furniture will be about 30% lower than they were in 1982. Manufacturers expect that the growth in consumer electronics sales, now booming along at a record high 14% a year, will slow to about half that rate.

Baby-bust families may have plenty of money to spend, however, because jobs should be plentiful. Whereas many older workers are now losing jobs as corporate America slashes payrolls in cost-inspired restructuring, the smaller number of baby busters will fare much better than the overcrowded group of baby boomers. The number of newcomers entering the job market is expected to drop from 1.9 million this year to 1.3 million in 1992, a record low 1% growth in the work force.

With less talent available for corporations to choose from, employers may offer larger salaries and more responsibility to promising college graduates. Ambitious baby-bust workers could find the path to promotion a little less crowded than it has been for baby boomers. Says Peter Morrison, a population analyst at the Rand Corp.: "Baby busters will in general have more of a choice ((in the job market)) and better prospects for advancement than the previous generation."

The Federal Government will have to pay more to maintain its volunteer military. The pool of eligible recruits for the armed forces will shrink from 9.5 million people in 1986 to 7.8 million by 1996. The Pentagon nevertheless expects to meet its recruitment goals, but the competition with private industry will be intense for entry-level jobholders. As the supply of younger workers declines, civilian and military employers will be forced to offer . education and training to make better use of potential recruits. By 1990, predicts the National Alliance of Business, three out of every four jobs will require education or technical training beyond high school. The Navy has set up remedial-education programs at three training stations to nudge 22,000 of its 100,000 recruits beyond eighth-grade comprehension in reading, math and science. Says retired Admiral James Watkins, former Chief of Naval Operations who now heads the Navy's Personal Excellence and National Security program: "Everyone's scrapping for the same declining resources."

Waves of immigrants -- both legal and illegal -- will help fill the demand for new workers. Leon Bouvier, visiting professor at Tulane's School of Public Health, predicts that in Texas, New York, California, Illinois and Florida the growth in the labor force in the first 30 years of the next century will be almost entirely made up of women and immigrants.

The infusion of at least 50 million foreigners into the U.S. during the next century will be the reason the population will continue to expand even if the birthrate stays in its present trough. Although the birthrate has risen slightly in the 1980s, the increase has been caused chiefly by the large number of baby-boom women of childbearing age. Immigrant communities tend to grow faster than the U.S. population at large; Hispanics in the U.S., for example, should increase at a rate of 3% a year until the end of this century. Even allowing for that, the U.S. fertility rate, now 1.8 children per woman, is expected to remain below the "replacement rate" of 2.1. One grim projection: by 2014, deaths will exceed births in the U.S.

The dwindling numbers in later generations may not be enough to support the huge demands that the baby-boom generation will put on the Social Security system. Demographers predict that payroll taxes on baby boomers now entering their peak earning years will build a surplus of retirement funds that will sustain the Social Security system for a while. But by 2020 the amount coming in from the smaller cohort of workers behind the boomers will not be enough to cover costs. Says Ben Wattenberg of A.E.I.: "What you put into a Social Security system is babies, and what you get out is money. Those nice baby-boom yuppies forgot to put a baby in the system."

To gloomier prophets of the American future, the long-term drop in the birthrate means that the U.S. has joined other industrialized nations in a Spenglerian decline of the West. In his forthcoming book, The Birth Dearth (Pharos Books; $16.95), Wattenberg points out that developed nations such as the U.S., Australia and the West European countries, which accounted for 22% of the world population in 1950, are being surpassed by the rapidly growing East bloc and Third World populations. The developed nations now account for just 15% of the world total, and will sink to 9% by 2030.

In the U.S., conservatives have begun to point to the birth-dearth phenomenon in their arguments for "pronatalist" social policies, including better day care, maternity leave and a tax exemption of up to $5,000 for every child in a family. Republican Presidential Contenders Pat Robertson and Jack Kemp have taken up the subject in their speeches. Says Kemp: "Children are not just mouths to feed. They're our future, our precious resource." Just as the baby busters have started reaching voting age, they may find that their smaller numbers have become an issue in the 1988 presidential campaign.

CHART: TEXT NOT AVAILABLE

Credit: TIME Chart by Joe Lertola.

Caption: U.S. birthrate per 1,000 people.

Description: Line graph indicating birthrate on scale of 14 to 26 for the years 1945 to 1985, graph in shape of baby in carriage.

With reporting by Barbara Cornell/Washington and Jeanne McDowell/New York