Baby Talk

A news release on Tuesday from the provincial government agency that collects and analyses health statistics showed the number of live births in the province in 2008 at 4905, the highest number “in any year since 1999”.

That’s true but more than a few people wondered why the Newfoundland and Labrador Centre for Health Information took the arbitrary year 1999 aside from the fact it is convenient to measure by decade. The other thing people wondered is why the agency would editorialise with the claim that “[t]his increase in the number of births is a positive step toward population growth for our province.”

The analysts at NLCHI ought to know that the number of live births is just one factor in population trending.  In addition, they would need to understand the cause for the increase, year over year, to see if this is actually something other than an anomaly in what has otherwise been a fairly steady decline in the number of live births to mothers whose residence is Newfoundland and Labrador.

A look at NLCHI figures on live births going back to 1995 (chart, left) shows the long term trending.

The number of births has been declining for some time.

The number for 2008 is the highest number of births over the past decade, except for 1999.  There were more than 5,000 live births that year.

The figures for 2006 and 2007 aren’t available, apparently. NLCHI didn’t release any data and only described the 2008 figures as being more than 300 higher than 2007.  Statistics Canada figures cover the period up to 2006 and they are the same as the NLCHI figures.

It’s not hard to understand the declining number of births in the 1990s.  Outmigration in the late 1990s took about 70,000 people out of the population, most of them in their child-bearing years.

The increase over the last four years is most likely due to a general improvement in the economy.  The population continued to decline annually throughout the period and only showed an overall increase within the past year or so.

A look at the crude birth rate (live births per thousand of population) gives another perspective. The birth rate declined precipitously as the population dropped among people of child-bearing age.

After the major outmigration ended, the rate stabilized again and until the economy really started to surge the rate stayed relatively low.

One of the things to bear in mind when looking at these numbers is the inherent lag in births from time of conception. That sounds like a penetrating insight into the obvious but since some people are undoubtedly going to credit the government’s pro-natal policy for the increase the time lag has to be factored in.

Children born in late 2008 reflect parental decisions (even allowing for surprises) taken in the early part of the year.  Children born in the first few months of 2008 were conceived before the bootie call announcement in September 2007.  That time lag is the reason why the overall economic climate might have more of an impact on the decision to have children than a cash bounty of $1,000 for each live birth and $100 per month per child for the first year after birth.

Statistics Update:  The number crunching labradore picks up on the decline thingy.  He points out that the number of births in the province has been declining every year since 1956 or so.  There have been periodic upticks but the trend is decidedly downward.

Skeptics update: To go with that, there’s a Bond Papers post from February that discusses some comments the finance minister made to Voice of the Cabinet Minister during polling season.

At that time, we were skeptical that the 4900 figure was real.  We are still a little curious about the number and the timing of the release.

Halfway through 2008 and the preliminary figures showed everything on track to deliver about 4500.  That’s an even more curious figure since the cash allocated by government for the program – which includes adoptions not accounted for in all the live birth numbers – works out to be 4500 children annually. 

But as for 2008, even allowing for season variation and the nine month time lag, that would mean all the extra kiddies were hatched in the second half of the year. Makes you scratch your head a bit.

And if all that weren’t enough, consider this line from the provincial government’s main statistics agency:

The number of births has been trending downward for four decades because of declining fertility rates and, more recently, a decline in the number of women of child-bearing age.

That pretty much says it all.  The population of people willing and able to have babies has been getting relatively smaller in this province. We’d have to go into a more detailed demographic breakout to see if there is an echo generation showing up.  That’s the offspring of a previous boom suddenly showing up having children.  It happened about 20-odd years ago as the children of baby boomers started reaching child-bearing age. We might be just at the leading edge of time when the baby-boomers’ grandchildren are starting to have babies.

As labradore noted at the time, since the population in child-bearing age has been going on, a baby crop of 4900 would mean that fewer people are having more children.

Sorta runs against what you’d expect.

 

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Fantasy Island

Delusional or in hyper-torque mode?

Either way, provincial finance minister Jerome Kennedy is living on Fantasy Island if he thinks the rate of in-migration is a sign that this “demonstrates the confidence that individuals have in Newfoundland and Labrador, our strong economic position, and in making it their home.”

The change is only two tenths of one percent.  That’s hardly a stampede.  That’s hardly the sign of people building makeshift rafts to scramble to Nirvana or the New Jerusalem.

That’s hardly the sign of an economy that is growing,  even by the hyper-optimistic provincial government estimate of 2%, compared to the almost 10% growth of 2007.

Nope, it’s a sign that things are shutting down everywhere else.

The big hat tip on this one goes to labradore. Incidentally, you can find a taste of WJM’s stuff in his own commentary on Jerome’s news release.  He started analysing the demographic trends a while ago and concluded that the changing population follows a pattern.  Right before a major recession elsewhere, there’s a blackflow in the pipeline of people leaving the province for greener pastures elsewhere. Those would be the people with a relatively weak social and economic attachment to their new home who decide to weather the coming rough economic times living with Mom and Dad.

He predicted the pattern long before the current recession hit.  Like clockwork, the numbers held, just as Kennedy trumpets:  “For four of the last five quarters blah blah blah”.

Jerome just got the reason wrong.

Badly wrong.

That would normally be okay, but there are consequences.  You see, too many locals are being duped into believing Jerome is right on this sort of stuff.

When the truth hits, it may well be very painful.  Just ask the people living in the region governed by Big Tory Graham Letto.  The guy who ran as a Provincial Conservative in 2003 followed the line set by his political buddies about us living in a bubble. Even though this newfangled Internet contraption has been in that part of the woods for a while – it’s facetious people he said pre-empting the e-mails – Graham decided it was better to spout the talking points than, say, think for himself.  Hence his astonishment when – as anyone else could have told him – IOCC decided to delay the expansion that had been fuelling his little economic boom.

Boom.

Bust.

Letto’s cheesy smile sure won’t make the sting of that one go away, just like Jerome’s new release won’t be any help come next spring when Jerome’s got to sort out a difficult year in his budget.

As for the backflow, it will last as long as the recession lasts and then those people will head back to where the real work is.

You see, that’s because there has never been an economic development Plan A for the current crowd, let alone a Plan B or even a Plan C that some are now praying for.  They’ve just been making it up as they went along.

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Expect more of this

The political fallout of losing Abitibi’s Stephenville mill was soaked up by the giant Alberta job sponge.

Well, that sponge is now being wrung out by the global economic downturn and the workers are heading back home.  They’re heading back home to places like Labrador West where slowdowns and project suspensions are the new norm.

People in Grand Falls might be cheering at the thought they somehow managed to wreak vengeance on Abitibi.

But what are they going to go for a job come March?

It won’t be Fort Mac.

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The challenge of demographic change (2)

This chart confirms what most of us already realize: there is a part of the province where the population is growing; there are others where the population is shrinking.

The figures are from the latest Statistics Canada population analysis.

The chart shows year over year changes.

Update Note: The scale on the left is the rate per thousand of population, not a percentage.

Updated update:  Just to put this in a bit better perspective it's useful to note the observation made by Statistics Canada on page 55 (57 of the pdf).  Of the 10 economic regions experiencing the largest population decreases in 2007, six were in Atlantic Canada.

Nationally, the situation in Newfoundland and Labrador is particularly noteworthy. The top two regions experiencing loss were in Newfoundland.  West Coast - Northern Peninsula - Labrador came in at sixth out of the top 10:

Like last year, Newfoundland and Labrador’s South Coast - Burin Peninsula ER experienced the largest population decrease of all, with a negative growth of –26.9 per thousand. Two other Newfoundland and Labrador ERs were among those with the largest population decreases: Notre Dame - Central Bonavista Bay in 2nd place (-17.6 per thousand) and West Coast - Northern Peninsula – Labrador in 6th place (-11.0 per thousand).

The population decreases between July 1, 2006 and July 1, 2007 in these ERs can be partly attributed to precarious local economic conditions and Alberta’s strong appeal. Between 2001 and 2006, 19,954 people moved from Newfoundland and Labrador to Alberta, representing 34.24 % of all interprovincial migrants from the eastern province.

If you follow the link above, you'll notice that other regions in the top 10 lost more people in absolute numbers.  However, the relative proportion (rate per thousand) was higher in the two Newfoundland regions that scored in first and second place.

The chart on page 71 compares the age and sex profile of the South Coast-Burin Peninsula (light blue) economic region with Red Deer.

The population of the Newfoundland region is significantly older than that of the Alberta region.  SC-BP has experienced one of the highest rates of outmigration  - both interprovincial and intraprovincial - at  negative 101 per thousand between 2001 and 2007), particularly men and women in their 20s.

 

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Buzz kill

vocm.com, known to some as Voice of the Cabinet Minister, was suitably gushy: "The tide may be changing."

Sorry, dears, but one spot does not a trend make.

Others were more factual and straightforward in their reporting, like say cbc.ca/nl:

The population of Newfoundland and Labrador is seeing its biggest increase in 15 years, according to numbers released Wednesday by Statistics Canada, and it's all down to moving Albertans.

The Telegram relegated the story to a small sidebar.

The story is quarterly population statistics from Statistics Canada that shows the first quarter of net positive in-migration for the province since 2003.

Not surprisingly, labradore puts the thing into a different perspective, something that is sadly lacking from popular commentary and media coverage.

At right is a chart showing the quarterly net population change figures for this province.

Take a good look at the numbers.

Continuing population decline every quarter, save for a few. The cause of the declines in the 1990s was undoubtedly the combined impact of the cod moratorium and the relative weakness of the rest of the provincial economy.

But take a notice of the point made at labradore.

The quarters preceding the latest one have been marked by net population drop. Some quarters were near the largest drops in the past 15 years.

The trend is still downward.

Overall, the population trends remain consistent with projections from the provincial government's own statistics analysis division and those trends have been forecast since the early 1990s. The trend will likely remain downward for some time.

Now for those into facile labelling of things, for those who find it comforting when everything fits into a pigeonhole - like say a few reporters and editors [read the comments sections] - this observation will be seen as further proof of things being "anti-Danny" or, oh horror, of being "negative."

Yes, Bond Papers is a buzz kill.

But that's really a bit like the guy in high school who had a theory. If he studied for the physics exam stoned and wrote it stoned, he should be a genius. Sadly, he got 12 pages of his own name. One of his buddies, who used the same theory, wound up with a line drawing of his family jewels that came from a cross between Grey's Anatomy and what we presumed was his own delusional self-image.

Those of us who pointed out the error in the deluded idea before they wrote the exam were well, fairly predictably labelled as "negative". Nothing we said killed the buzz as much as the mark the guys received for their efforts.

As Bond Papers has noted several times already over the past three years, the demographic changes in Newfoundland and Labrador have several components each of which poses policy challenges for the provincial government.

The population is growing progressive older, on average, for one. In relatively short order, the dependent part of the population - those under 15 years old and over 65 - will be larger than the workforce. That means, in part, that the economy has to be more productive; each worker must be more productive than it is today just to hold things steady. Incidentally, part of the basis for the 1992 Strategic Economic Plan was the understanding of these long-term trends, the state of the economy at the time and what needed to be done to meet the challenges coming up to 2012.

The older population - the changing mix of age cohorts - means that among other things spending priorities need to shift. Within health care, long-term care will become relatively more important than acute care. The school-age population will likely decline, meaning that we will have fewer students and hence a change in education spending. New schools will be needed in some places and in others, schools will be closing. Take a look around the province and see the number of communities where the average age is above 55 and there are simply no children and very few if any families of child-rearing age.

The population distribution is also changing within the province. People are moving away from smaller communities and towards the larger centres. Increased mobility hasn't changed that; people still travel to the larger centres to find key services. Where public services are located and where new ones will be needed will shift as the population changes.

The declining total population, the one that gets the most political attention is another one. But oddly enough, it's the one the provincial government can do the least about. Government doesn't create jobs; it creates a climate in which business develops and jobs are created or maintained.

The provincial government has lately focused on this one aspect - the gross total population - especially as it seems to involve the skilled workers needed for large construction projects. There are a couple of observations.

First, given the nature of a local economy built largely on natural resource production, the size of the population as significant an indicator of economic health as in other economies. Some of the wealthiest countries per capita on the planet have small populations. There simply isn't a magic number which indicates a 'good' population for Newfoundland and Labrador or anywhere else. So, without a number to aim for, there is nothing to know when any government efforts are succeeding or failing.

Second, the labour demand needed for constructing everything from offshore platforms to energy projects will be met by the private sector. Much of the work will have to be done in the province anyway, like say the gravity-base for Hebron. As for the other stuff, like say the topsides on that project, if the provincial government hasn't already given permission for the operators to do it somewhere else, the private sector will find the labour and control costs to deliver it. What can be done here will be done here.

Do a little reverse engineering for a moment. Faced with a labour shortage due to the hyper-demand of its economy, the Government of Alberta didn't launch an advertising campaign and talk about chartering jumbo jets to fly the Alberta wing of the diaspora home. Nope. The private sector tackled it. The private sector companies doing the work know their skill needs; they recruit based on the skill-sets the need and as long as the people are willing to come, have the qualifications and can do the work when needed, they get hired.

When you send a bus to pick up bodies what you get is a busload of bodies. And before anyone notes that obviously the recruiting will be done on a skills basis, bear in mind that the major focus of government energy on the population front has been to talk of bringing the homing pigeons back. It isn't about skilled trades at all; it's about people of the right ethnicity. It isn't at all obvious that any provincial government apparently focusing on ethnicity and population will suddenly realize that a lot of the ex-pats don't have the skills needed for industrial construction and won't be able to acquire them within the required time frame.

The surest buzz kill or buzz drag in the boom time around the corner will be having a provincial government that focuses on things it doesn't do well, can do little about, or isn't about creating the environment in which the private sector can thrive.

And for those who have doubts about the private sector and the oil industry, just look at what the local private sector has been able to do. Ask Rob, or Fraser or Jerry just to name a few.

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Quebec's outmigration problem

From ctv.ca, a report on the growing outmigration of young anglophones from Quebec.

As in Newfoundland and Labrador, they are being lured by better economic opportunities elsewhere.

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The remittance economy and the long-term future

CBC Radio is running a short series of reports on remittance workers. Those are people who maintain a permanent residence in Newfoundland and Labrador but who travel to other places, mostly Alberta, to earn a living.

If the CBC figures are accurate - upwards of 10,000 people earning pre-tax salaries of $100,000 a year - then remittance labourers are contributing to the Newfoundland and Labrador economy on a scale that rivals agriculture and the fishery.

Remittance labour is a common feature of the economy in the developing world. The figures for Newfoundland and Labrador would be also on a par with some countries at the low end of the scale in a 2003 World Bank study. Bond Papers noted the local history of remittance work in a post earlier in 2007.

The local workers involved in the Newfoundland and Labrador version of remittance labour include fishery workers displaced by changes in that industry. Others are older, skilled workers from the former paper plant at Stephenville or from the shipyard at Marystown. Neither of these groups will likely be doing the Big Commute for a long time. Either the projects they are working on will shut down or they will retire in Newfoundland and Labrador.

Others are young men and women who are attracted by high wages and steady work in their chosen fields. While the older workers are contributing to a localized economic boom in places without major industries - like Marystown or Stephenville -

Only a major and sustained series of local projects rivaling the work elsewhere will cause the younger workers to stay in the local labour force. Many are likely to settle outside of Newfoundland and Labrador.

In that context, it's interesting to recall that in 2003 Danny Williams campaigned on his commitment to "growing" the economy and creating jobs. He didn't do that, of course, as Bond Papers has noted several times, including in a reprint of a 2004 column from the original (pre-Cleary) incarnation of The Independent. The economic miracle of the past four years has been entirely due to the upsurge in world oil prices.

Essentially, the current progressive Conservative administration is following the same approach of its predecessors. The long-term is sacrificed to short-term expediency. The rise of highly-paid remittance work has served to both cushion the blow of outmigration and enable the provincial government to contribute disproportionately to the provincial economy in the process.

The current administration started out, supposedly, with a plan to control spending and deal with the burgeoning provincial debt. In reality, it did nothing about either. Spending has grown by 35% - well beyond the rate of inflation - and at the same time, the provincial direct and total debt is larger today than it was in 2003. Spending is forecast to increase, as is the debt.

Both oil prices and the remittance economy are shaky underpinnings for government spending and development of larger debt. Oil prices are historically subject to significant fluctuations. The remittance economy is limited either by the life of projects or the short time some of the workers have left to retirement.

Remittance work and the related subject of demographic changes in the province have been largely ignored by successive provincial governments in Newfoundland and Labrador and there is virtually no discussion of it in the public at large.

Perhaps the CBC report will change that.

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Money and the ethnic vote: part 2 of 3

Ineffective policy

At its simplest level, the Progressive Conservatives pronatalist policy is aimed at increasing family size within Newfoundland and Labrador. Women will receive a bonus of each child delivered or adopted.

The pronatalist policy should be rejected since it does not work and therefore is a waste of scarce public money. Experience across the globe over the past 30 years demonstrates that cash incentives do not change fertility levels to an appreciable degree. The average number of children born per couple of child bearing age remains generally the same. The policy may produce some temporary fluctuations but overall, fertility rates in major industrialized countries remain the same after pronatalist policies as before.

In jurisdictions where pronatalist policies have been tried, they tend to be very expensive. Quebec's decade long cash-bonus program cost an average of $15,000 per child but was abandoned because it was ineffective. Where policies did affect the birth rate modestly,they include measures inconsistent with a modern democracy. Franco's Spain banned birth control, for example. However, once the dictatorial methods disappeared with the move to democracy in countries such as Poland or the former German Democratic republic, birth rates moved in directions experienced in other democratic countries. Overall, the policies simply do not work.

On another level, the cash incentive policy is touted as a way of dealing with a declining population size; more people are leaving Newfoundland and Labrador either through emigration or death than are immigrating or being born.

Migration is driven primarily by economic considerations – people leave to find work or come to take advantage of opportunities. Paying a cash bonus of any size will not affect that simple motive, either for new immigrants or as a way of attracting former residents to return. Family size is driven by complex factors, centred mostly on individual choice about lifestyle. None of these factors are affected by the limited policy announced by the Progressive Conservatives and certainly none are affected by the $1000 bounty placed on a set of diapers.

Randy Simms and others have pointed out these inherent flaws in the policy as a policy aimed at addressing demographic issues facing Newfoundland and Labrador in the decades ahead. Their criticisms are well-founded. However, they have ignored other aspects of the policy which make it not merely ineffective but socially and politically regressive.

There are two aspects to the demographic problem facing Newfoundland and Labrador. One is the declining population which reduces the available workforce. This can be addressed, most effectively by increased immigration. Workers will be needed now. We have already arrived at the start of the worker crunch and this situation – fewer workers – will only increase in the years immediately in front of us, if present trends continue. A cash bonus for children - even if we imagine that it will be effective here where it has failed everywhere else - will not produce new productive members of the economy for the better part of two decades.

The second aspect of the demographic problem is the changed makeup of the population. The dependent portion of our society increases as the population increases. That is, where once there were more people employed people than children and seniors, we are already in the state of having more children and seniors than wage workers.

This has an obvious economic consequence in that each worker must produce - on average - more revenue for the treasury so that the existing public services can be maintained. Paying a bonus for having children does nothing to increase productivity or increase average wages.

Part of the flaw in the proposed policy is the emphasis on the declining population size. The adverse implications of the demographic changes taking place in Newfoundland and Labrador do not flow from the size of the population alone. In the fishery, for example, it is well established that the industry will have to change from its labour intensive production in order to remain competitive. Fewer people will be needed. it is possible to have a vibrant, viable economy with a smaller population or even one with a high rate of dependency - more non-workers than workers - than currently exists in Newfoundland and Labrador.

Ignoring the evidence

That said, it is instructive to look at Danny Williams' comments to reporters:

We've had some lengthy discussions on this in caucus and at cabinet... and what we've done is we've looked at the jurisdictions across Canada, to the best of our ability, and as quickly as we could in advance of the election, government had started to do this process, but it's a very detailed process, and we want to make sure we follow through.

We're also looking at some precedent in Europe, and other modern countries, trying to encourage young families to have children. It's a clear problem, and it's an economic problem... This government is open to suggestions, and good suggestions... It's probably one of the key points in our platform, that we feel very strongly about. It's something we'd certainly like to implement as soon as possible. It hasn't been budgeted. One of the best jurisdictions and one of the most successful, of course, was Quebec. And they have found it to be one of the most successful initiatives. But I'd be remiss in [not] saying that we're still preliminary on this. [Emphasis added]

The policy was obviously hastily assembled. It is also obvious that the claim that Quebec's program was successful fly in the face of evidence. The current administration clearly appreciates that the demographic issue is an economic problem.

In the last part of this commentary, we'll look at possible explanations for the pronatal policy that defies the obvious reasons not to pursue it.

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Rural neglect a tacit strategy by Liberals says Williams

Remember April 2006 and the big Hebron fiasco?

Danny Williams told local CBC news that "St. John's could take the hit" resulting from Hebron's failure since his focus was on rural Newfoundland.

Well, it's an election and that sentiment is no longer the view of the first townie to hold the Premier's chair in the better part of a century.

Apparently St. John's has been neglected, not by the Tories, mind you but by the evil Liberals.

And the venue for this little revelation? A speech in rural Newfoundland where the Premier decided also that rural Newfoundland has not been neglected by him.

Nope. It was the Liberals who neglected rural Newfoundland to drive people out.

There is obviously no limit to what a politician will say to grab a few votes.

Well, at least one politician.

As you ponder that little piece of reality, take a look at this post on outmigration from a time when local politicians didn't want to talk about it.

Since outmigration has mushroomed again under Danny Williams, would that be part of a tacit strategy as well?

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St. John's has been neglected, premier says
Terry Roberts
The Telegram (St. John's, NL)
September 24, 2007, p. A7


St. Anthony - Growth in the province's economy may be most noticeable in the capital city region, but Premier Danny Williams acknowledges St. John's has been "neglected" during his government's first four years in office.

Ironically, Williams made the admission during a campaign stop in rural Newfoundland Friday night, where cabinet minister Trevor Taylor is seeking re-election in the district of The Straits-White Bay North.

"St. John's will need work," Williams said before a crowd of some 150 people at a rally in St. Anthony.

The provincial government will invest about $440 million in infrastructure this year. It's part of a $2-billion infrastructure commitment.

But only a fraction of this year's budget will be spent in the St. John's metropolitan region.

It's part of a strategy by the Progressive Conservatives to modernize roads, education, health and telecommunications in rural areas in order to stimulate economic development.

Williams also complained Friday in St. Anthony that significant spending was needed because of many years of Liberal neglect.

During the 1990s, many Liberal heavyweights - Paul Dicks, Chuck Furey, Chris Decker and Brian Tobin - represented districts on the west coast and Northern Peninsula, yet the region was ignored, Williams said.

He believes allowing the infrastructure to crumble was part of a tacit strategy by the Liberals to make life more difficult for residents "so there is no reason to live there."

While the bulk of future investments will continue to be made in rural areas, Williams said St. John's will begin to see a large piece of the pie.

"There's going to come a point in time where we need to do some things within the city as well," he said.

Williams said there's a need to expand the Health Sciences Centre. He also committed to increased investments in long-term care facilities and schools in St. John's.

Williams' comments come at a time when the Liberals continue to rail against the Tories over what they claim is an abandonment of rural Newfoundland.

Williams said that's not true.

He said areas such as Clarenville, Bay Roberts and Deer Lake are beginning to boom. The Coast of Bays region, which has fallen on hard times in recent years, is also seeing growth in aquaculture.

"There's a misperception out there that things aren't good in rural Newfoundland and Labrador, when nothing is further from the truth. And in fact the irony is that there's still things that need to be done in St. John's," he said.