The South Korean government spent 279.9 trillion won to address the low birthrate issue from 2006 to 2021, yet it had little effect. In March this year, only 19,669 babies were born, a 7.3% decrease compared to the same period last year. This marked the second consecutive month that births did not exceed 20,000, the lowest number since 1981 when related statistics began. Despite this, the South Korean government continues efforts to raise the birthrate to counter low birthrates and an aging population. Both past and current administrations have introduced various financial support measures and attempted to change economic and social structures that discourage childbirth.
Urban planning expert Alan Mallach argues in his book “Smaller Cities in a Shrinking World” that trying to increase the birthrate is misguided. He states, “Countries with declining populations will continue to do so, and population decline is something to be managed, not solved.” He criticizes the long-held belief that growth, whether in population or economy, is a cure-all solution.
ChosunBiz conducted an interview via Zoom with Mallach, who resides in New Jersey, U.S., on May 16. The interview came a week after President Yoon Suk-yeol announced the establishment of a new organization tentatively named the Low Birth Rate Response Planning Bureau, to be led by the Deputy Prime Minister for Social Affairs, during his second-anniversary press conference on May 9. Mallach said, “South Korea’s total population began to decline in 2020,” emphasizing that viewing growth as something valuable and regarding population decline as a signal of failure can foster pessimism, even with the simple fact that the population is decreasing. He said, “Population decline should be seen as a challenge to be managed, not as an outcome.”
Mallach has over 55 years of experience in housing and urban planning. He graduated from Yale University, served as the Director of Housing and Economic Development in Trenton, New Jersey, and worked at the Brookings Institution. He is currently a research fellow in urban planning at Southeast University in Nanjing, China, and will be teaching graduate students in architecture and urban planning this fall.
Reflecting his expertise, Mallach predicts the rise of “shrinking cities,” where significant population declines occur over a short period. He notes, “In this global trend of declining growth, shrinking cities are no longer an exception or an ‘outlier,’ especially in Eastern Europe and East Asia.” However, he suggests that with the right acceptance and cooperation between the public and private sectors, these cities can continue to develop economically. This echoes Aristotle’s statement that “one should not confuse a great city with a populous one.”
One striking part in the book was: “Once the population begins to decline, it is difficult to recover to the level before the population decline.”
“The trend of population decline is not easily reversed. Once the fertility rate starts declining, it likely continues until reaching an unpredictable point. The total fertility rate (TFR) is the average number of children a woman is expected to have in her lifetime. When the TFR is 2.1, that society will have a steady population, known as the replacement rate. Most developed countries today have fertility rates below 2.1. Among the 64 countries that recorded TFR below replacement levels in 2008, 63 countries, excluding Iran, continued to have rates below replacement in 2018. Many middle-income countries like Thailand, Vietnam, Bangladesh, and India have fertility rates around or below 2.1. There is a long-term trend of lower fertility rates worldwide.”
South Korea’s TFR in the first quarter of this year was 0.76, a record low for the first quarter, decreasing by 0.06 from 0.82 last year, dropping below the 0.8 mark for the first time. This trend suggests that this year’s TFR will fall to the 0.6 range. Last year, the number of births was 230,000, less than half of the 480,000 in 2012, and only a third of the 730,000 in 1992. Facing a looming “population cliff,” Statistics Korea predicted on June 6 that the population will decline by more than 1% annually after 30 years, falling below 20 million in 100 years.
You mentioned that government policies to increase birth rates will only temporarily boost birth rates. Why is that?
“I know that the South Korean government has been trying very hard to figure out how to increase the birth rate. The U.S. and European governments have also introduced measures to provide incentives for childbirth, such as free or inexpensive childcare and newborn allowances. If the government opens up all kinds of pro-birth programs, the birth rate will probably come up a little bit. Some families might think, ‘Now that we can afford childcare, I’ll have a baby.’ The birth rate will rise shortly and then it will start going back down again below replacement. Politicians believe that people do not have children because ‘it’s economically difficult,’ but it is more complicated and more fundamental than that. Look at France. It has spent billions of euros to support and encourage childbirth for years. But the total fertility rate in France is below the replacement rate. Its population is growing, but because of immigration, not a rising birth rate.”
Do you mean that global population decline is inevitable?
“There is no solution to population decline. Not just in the U.S., but South Korea, Japan, China, and the entire world must accept that we live in a world where the population is declining. Leading demographers predict that the global population will begin to decline in 45 to 50 years. The Institute for Health Metrics and Evaluation at the University of Washington expects that by 2050, 65 countries, or one-third of all nations, will have negative population growth, and another fifth will have annual population growth rates below 0.5%. Population decline is inevitable, and it is not a challenge that can be reversed.”
You suggested that a declining population leads to a reduction in the labor force, which in turn reduces consumption, leading to economic decline.
“Without population growth, it becomes much more difficult to have economic growth, but not impossible. There are factors other than population growth that can contribute to increased productivity and economic growth. First, you can increase human capital by improving the skill levels and education of the workforce. And changes can be made to the definition of the working-age population, typically defined as those aged 20 to 64. In Japan today, due to the aging population, 15% of the actual workforce is over 65. Most people in South Korea live into their 80s. By the time people reach 65, they are still healthy, active, and willing to continue to work. One of my friends is in his mid-70s and still actively teaches at a university in Kyoto, Japan.”
Do all cities become what you call ‘shrinking cities’ when the population declines? What exactly is a shrinking city?
“A shrinking city refers to one experiencing a significant decline in population over a short period.I have spent several years examining shrinking cities in the United States, Europe, and Japan. For a long time, my colleagues and I viewed population decline in cities as an anomaly. About five years ago, I began researching shrinking cities and studying demographic statistics, leading me to realize that shrinking cities are no longer an exception but the norm. We are living in a world where growth is no longer guaranteed, and this is why I wrote this book.”
You mentioned in your book that inequality worsens within and between shrinking cities.
“The more growth there is, the easier it is to alleviate inequality. Politically and culturally, if the pie is larger, redistributing resources can occur without taking them away from anybody. However, when the pie is smaller, redistributing resources can only happen by taking them away from somebody else. As the population declines, the room for economic growth diminishes, and resources available to everyone decrease, potentially exacerbating inequality.”
What are ways to mitigate inequality within and between cities?
“It needs deliberate governmental policies to alleviate it. For example, the United States under the Biden administration has a variety of policies to try to seed technology development in weaker regions by creating ‘technology hubs’ in different regions. While it is uncertain if these will work or not, they are attempts to redistribute some resources at the regional level and help build up some of the weaker economic regions. If you are a young person and grew up in a city with few jobs but have unique skills, you are more likely to move to a place that has more opportunities to apply your skills and energy. The Biden administration is making efforts to revive the economies of areas where population decline might occur. One example is Syracuse, a small city of about 150,000 people in upstate New York. Syracuse was once a powerful economic industrial city, but most of its industry and companies left, leading to population decline and a very high poverty rate. The Biden administration has provided subsidies to Micron, the largest semiconductor company in the U.S., to build a massive factory just outside of Syracuse. The residents of Syracuse are eagerly anticipating the significant economic impact this factory will have on their community.”
U.S. President Joe Biden announced on April 26 during his visit to Syracuse that Micron would receive a subsidy of $6.14 billion (around 8.45 trillion won) to establish a semiconductor factory. Micron plans to set up new semiconductor factories in New York and Idaho with subsidies from the U.S. Department of Commerce. Biden emphasized, “Micron’s total investment will be the largest private investment in the history of New York and Idaho, creating over 70,000 jobs, including 20,000 direct construction and manufacturing jobs, and tens of thousands of indirect jobs.”
Are there examples of shrinking cities that have overcome their challenges without government assistance?
“Factories in Pittsburgh and Baltimore closed due to the decline of American manufacturing. However, they were able to rebuild their economies thanks to renowned universities and the medical services sector. This is due to the increasing importance of education and healthcare in the U.S. economy in the late 20th century. While the healthcare sector accounted for only 5% of U.S. GDP in the 1960s, it increased to 18% by 2020. The Johns Hopkins University Medical Center became Baltimore’s largest employer, and the University of Pittsburgh Medical Center is now Pennsylvania’s largest private employer, followed by the University of Pennsylvania Medical Center.”
What advice would you give to South Korea in a world where shrinking cities are the norm?
“Population decline is not a challenge that can be reversed. Now, we must consider how to create healthy cities that function well even in the face of population decline. From 2002 to 2019, the populations of 31 out of 86 cities in South Korea decreased, with half of these cities experiencing a population decline of over 10%. Some regions centered around Seoul may continue to grow economically despite population decline, but others will experience negative growth. It is human nature to resist change, but we must realize that times have changed and that population decline is the new reality. The government and major universities need to consider how to build healthy local economies and communities even with declining populations. Only then can numerous shrinking cities find new opportunities amidst economic crises and political turmoil. While shrinking cities may receive assistance from central or local governments, they must also actively leverage their capabilities and assets. This requires cooperation between the public and private sectors, communication between residents and public and private leaders, and efforts to build the human capital of local communities.”
