How will falling birth rates in East Asia affect the apparel industry and is overpopulation still a problem? Apparel industry consultant Robert Antoshak discusses what the next 30 years could have in-store.

It’s an understatement to say that we live in challenging times, particularly when considering how our industry has changed due to supply chain and lockdown disruptions caused by the pandemic. And now we have a war in Ukraine to further complicate things. So, we’ve gone from a comparatively calm of about 30 years of global sourcing and supply chain efficiency to about 30 months of complete chaos and supply chain disintegration. 

It’s a mess – and that’s without taking politics into account. Even so, things are getting worked out. Yet new costs are being baked into the system of production. Economists would call such costs inflation, while apparel companies would call it reduced margins and consumers would call it higher prices.

Regardless of perspective, the system is adjusting to a new diversified sourcing and production paradigm to shore up supply chains and inventory management. Indeed, it’s still a work in progress, but changes are afoot. The bottomline for clothing companies is expect higher prices from your suppliers and plan to do the unthinkable. Pass at least some of those costs onto consumers.

A system out of whack

Yeah, this inflation thing is a bummer, and we may have to deal with it for a while – but for how long is anyone’s guess. Besides inflation, what else is in store for the future? We may have to contend with declining demand for discretionary consumer goods, like clothing. When inflation strikes, consumers often save their money for essentials. But there’s also pent-up demand from the pandemic for dining out and travel services.

Regardless, the International Monetary Fund recently dropped its estimate of global GDP growth in 2022 from 4.1% to 3.6%, undoubtedly reflecting concern over inflation and the war in Ukraine.

The global economy is struggling to find its footing.

How will falling birth rates affect the apparel industry?

Let’s talk sex. Or in demographic-speak, birth rates. Guess what? birth rates are falling throughout the world, a global baby bust. In turn, global forecasts for population growth are declining. Moreover, people live longer, so increasingly there are few young people to support an ageing society. And these are global phenomena affecting countries all around the planet, with implications worth contemplating.

Big countries are not immune to the situation. Take China, for instance. A recent article in Foreign Affairs magazine by Fordham Law School Professor Carl Minzner summed up the situation in China this way: “China is ageing fast. In 1978, the median age of a Chinese citizen was 21.5 years. By 2021, it had risen to 38.4, surpassing the United States. If China continues along its current trajectory and follows the rest of East Asia in descending to ultra-low fertility rates, its median age could rise to over 50 by 2050.”

What’s more: “China’s rapidly ageing society and plunging birth rate poses a host of challenges for its leaders, including a shrinking number of young workers and an increasingly unstable pension system.” It sounds precarious, but China is not alone.

Minzner explains: “Birth rates in East Asia have continued to plummet. Because birth rates are declining worldwide, it is easy to overlook how extraordinarily low East Asia’s rates have fallen. They are not merely well under the replacement level of 2.1 births per woman, as is true for other ageing countries such as Russia (1.8), Germany (1.6), or Italy (1.3). Hong Kong, Macau, Singapore, South Korea, and Taiwan are in fact the five lowest in the world, hovering around 1.0. And South Korea’s rate is astonishingly low: 0.81 births per woman. By comparison, even geriatric Japan looks positively fecund at 1.37.”

More or fewer people?

So, should we no longer worry about overpopulation? No, as it’s not time to become complacent. Current trends can always reverse. We haven’t solved overpopulation. For instance, during the height of the pandemic, government subsidy payments correlated with a higher birth rate. However, since the expiration of those incentives, birth rates have moderated somewhat, a telling development.

However, let’s suppose that if current population trends portend a future filled with fewer people, will fewer people inhabiting the world translate into lower GDP and, by extension, lower consumption? What about environmental impact? 30 years of wanton consumer consumption has gone a long way to endanger our biosphere. Could that be reversed somehow with fewer people around?

Philosophic ponderings

So, questions like these prompt me to wonder what could be in store for us as a species. I know, that sounds a bit philosophical. For sure, our industry is a business focused on practical outcomes. But philosophy does play a role in helping us embrace what could be: A smaller world, fewer people, less consumption, less production, less pollution. Those are concrete outcomes. Hence, we need to think big before we can hope to realise physical results. It’s a case of profit or loss and the health of our planet.

Population forecasts are tricky. Some estimates put the world population at more than 11 billion by 2100 (United Nations), while others place it closer to 9 billion (the Lancet). We’re just under 8 billion today, according to the United Nations.

And this brings me back to the past 30 years. What has been a by-product of globalisation? Urbanisation. And what’s a by-product of urbanisation? Smaller families. Why? Because living in cities is expensive. And kids are expensive. Moreover, women in the workforce have choices and responsibilities to consider in addition to child rearing. 

Minzner drives home the point: “East Asia faces the same problems — high housing costs and demand for additional years of education — prompting young people globally to delay marriage and childbirth, or forego them altogether.”

Changing demographics

It’s a gloomy outlook. Unfortunately, there’s more. Another by-product of globalisation has been growing economic inequality. Sure, many have been lifted out of poverty. That’s a great accomplishment. But at the same time, a small slice of the population has become very rich. Much of the purchasing power is skewed towards older people, perhaps not surprising, but it may be more pronounced than we’ve seen in a generation. A by-product of the 1% economy?

So, I’m left wondering if these are the beginning of longer-term trends or just anomalies that will straighten out after the war ends, inflation moderates, and the pandemic fades. Then, maybe the world settles into some measure of normalcy — meaning an era free from the shocks of the past few years. Or I wonder what the next 30 years hold in store for us?

By Just Style