Why Big Tech Leaders REALLY Want You To Have A Baby

0:00 governments and a long list of highly

0:02 influential people around the world really want you

0:04 to have children and they are seemingly pulling

0:06 out all the stops to make it happen.

0:09 Dozens of countries like Australia, France, and even certain states in the USA

0:13 have tax incentives for families with children.

0:15 Other policies like subsidized childare.

0:16 Several others offer years of paid parental leave,

0:19 gift baskets, housing bonuses, healthcare support.

0:22 And when that hasn't worked, some countries like South Korea, Singapore,

0:25 and Russia have been even more direct by offering cash payments for newborns,

0:29 sometimes even going as far as having compounding

0:32 payouts for every additional child after the first.

0:34 As it's become clear, the carrot alone isn't moving the needle.

0:38 Several governments, including our own,

0:39 have started playing around with ideas like additional

0:42 taxes exclusively for single people and childless couples.

0:45 Going even further, China has started taxing ham holsters in a lastditch

0:49 attempt to give people to have some damn babies by any means necessary.

0:53 These efforts are collectively costing regular taxpayers

0:56 hundreds of billions of dollars every year,

0:58 which does raise the important question, why are we doing this?

1:02 Why are we pushing so hard to make people make babies?

1:05 Well, there are actually a few arguments that get thrown around

1:09 as well as some questionable motivations that we will address later.

1:12 But the overwhelming alarm bell that is being sounded right

1:14 now is that if we don't get down to it,

1:17 we are going to have a demographic collapse.

1:19 There will be too many old people and not enough young people to support them,

1:23 either directly through physical assistance or indirectly through taxes,

1:26 spending, or investments to fund their retirement programs.

1:29 It does admittedly sound pretty concerning,

1:32 especially for most of you watching who are statistically in the age

1:35 group that is going to be hit by these demographic changes the hardest.

1:39 But if you then think about it a little bit more,

1:42 these arguments just raise even more questions, like, well,

1:45 why are some countries like Switzerland going in the opposite

1:48 direction and trying to legislate a hard cap on their population?

1:51 Closer to home, it might be a bit hard for a lot of you watching

1:55 to stomach the idea that we just need

1:58 more young people as youth unemployment and underemployment skyrockets.

2:01 And then there is the most existential question of all.

2:04 Is this current obsession with natalism a tacit admission

2:07 that our whole system has turned into some kind of ponzi scheme

2:11 that only works if we have a constant supply of people

2:14 entering the bottom to support the people at the top?

2:16 The baby bonus.

2:17 Baby bonus.

2:18 A baby bonus in China now offers cash

2:21 to families with kids under the age of three.

2:25 Out baby bonuses last year and says it's already boosted staff births.

2:30 Why many Japanese women are choosing not to have children.

2:34 child-free lifestyle is now illegal in Russia.

2:37 Birth control that was once taxree, well, it's now taxed.

2:41 Switzerland is going to the polls to vote on whether

2:45 they should cap the country's population at 10 million people.

2:49 Okay, so before we dive into personal

2:51 and societal trade-offs of having or not having children,

2:54 we first need to address some of the hypocritical ironies

2:56 coming from a lot of the biggest voices on this issue.

2:59 The demographic collapse problem has become a central talking

3:02 point especially amongst the regular suspects of big tech.

3:05 Sam Olman, Jeff Bezos, and Jack Maul have all explicitly given interviews

3:10 or published their thoughts on the threats posed by depopulation.

3:13 Going even further, Peter Teal and Elon Musk have both highlighted

3:16 the problem as one of the most immediate threats facing humanity.

3:19 There are not enough people.

3:21 I can't emphasize this enough.

3:22 There are not enough people.

3:24 Now, in Musk's defense,

3:25 he is doing his part to single-handedly correct this issue,

3:29 and Teal is at best indifferent to humanity continuing in the first place.

3:35 Should the human race survive?

3:38 Uh, yes.

3:39 Okay.

3:39 But but anyway, the point is that all of these people are

3:44 going to great lengths to warn us about the dangers of not

3:47 having enough young people entering

3:48 the workforce while simultaneously betting hundreds

3:50 of billions of dollars that they can replace the same workforce with AI.

3:54 Now, you might personally be skeptical about the promises of AI.

3:58 And you might also personally think

4:00 that the threat of a demographic collapse is real.

4:03 But if this technology is going to do what these people claim it is going to do,

4:07 not having enough people should be the least of our problems.

4:10 Right now, the ironies that come up in this debate don't stop there.

4:13 And we will get to the true threat of a demographic collapse at the end.

4:17 But in the meantime,

4:18 you should probably consider the three other big motivations that might

4:21 also explain why these people have become so obsessed with needleism.

4:25 The first is that naturally a lot of powerful, wealthy,

4:28 and influential groups want to make sure

4:30 that they have a stable supply of workers, customers, and debtors.

4:33 More people in a market on average means more economic

4:36 activity in a way that is especially good for business owners.

4:39 A lot of these big tech platforms in particular

4:41 have already reached every single user they possibly can.

4:44 So, the only way to get more Amazon Prime members, Grock Edge lords,

4:48 or Palunteer database entries is to have more children and a growing population.

4:52 The same fear is being bloated in these articles around

4:55 a shrinking population's ability to bear the burden of rising global debt.

4:58 Now, of course, there is an element of truth to this.

5:02 National debt in almost every advanced economy around

5:04 the world has increased significantly and a big

5:06 tailwind behind that debt has been supporting

5:09 old age social programs like pensions and carers.

5:11 If the population shrinks, it means that this debt burden will need

5:14 to be lifted by a smaller base of taxpayers.

5:17 And this is a very serious issue.

5:19 But it's also a bit ironic coming largely from the people

5:22 that own a majority of that government debt in the first place.

5:25 The solution being presented is for more working-class people to make

5:28 the sacrifices needed to raise children as some kind of sacrifice

5:32 to the economic machine god without

5:34 addressing some logical alternatives like less

5:37 government spending to subsidize their businesses

5:39 or you know just more effective taxation.

5:42 Now to play devil's advocate maybe the solution

5:44 is some combination of all of these.

5:46 But at the very least, it is irresponsible to ignore the other two

5:50 and conclude that the solution is just more manpower.

5:53 Now, that alone doesn't sound like a great

5:55 motivation to change government policy around families,

5:58 but having a constant supply of debtors is just the first reason.

6:02 It gets worse.

6:03 So, it's time to learn how many works to find out why having

6:06 more kids is being presented as a solution to all of our problems.

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7:10 So having a stable supply of people to buy

7:12 their products and to pay back their debt is one thing.

7:15 But the second major unspoken motivation is to have a stable supply of workers.

7:19 If there are more people competing for the same job,

7:22 then businesses can normally get away with paying less,

7:24 demanding more, and experiencing less staff turnover

7:27 because nobody wants to lose their job.

7:30 Stevens Sinowski, a former Microsoft Windows chief,

7:32 and Eric Schmidt, the former CEO of Google,

7:35 both said this quiet part out loud in interviews stating

7:38 that human workers were going to be at a premium.

7:41 In basic economic terms, if a business wants to produce something,

7:44 it needs some combination of the four factors of production,

7:48 capital, land, entrepreneurship, and labor.

7:50 You need investment into tools and processes.

7:52 You need land to operate on.

7:54 You need business leadership to come up with ideas and make strategic decisions.

7:57 and you need workers to actually put everything into action.

8:01 Naturally, the more limited the supply is of any of these four factors,

8:04 the more expensive it will become in the process.

8:07 Venture capitalists and wealthy investors largely have

8:10 the market for these three factors cornered.

8:12 But labor belongs to the individual.

8:14 If there is not enough workers,

8:16 then the value of labor will increase relative to these other factors.

8:19 In plain English, if finding enough manpower

8:22 becomes the limiting resource in most business operations,

8:25 then those businesses will need to start paying more for that manpower.

8:28 Now, obviously, to the people that make most

8:30 of their money by owning these other three factors of production,

8:34 this is a terrifying prospect.

8:36 Now, I can't believe I'm going to be doing this twice in one video,

8:39 but to play devil's advocate again,

8:40 some people in particular, like Mark Andre, a major venture capitalist,

8:44 have used this idea to advocate for the value of AI.

8:47 In most of his press on the issue,

8:49 he has effectively said that running out of workers would[ __] major industries,

8:53 especially those supporting the elderly.

8:55 But if AI can replace or leverage that work,

8:57 then it won't be such an immediate issue.

9:00 It's obviously a business first mindset,

9:02 but it is at the very least logically coherent.

9:05 Now, we can't read the minds of the other major voices on this issue,

9:09 but one possible theory is that on one hand,

9:11 they obviously all have a vested interest in developing

9:14 AI technologies that could replace or augment human workers.

9:16 But if that doesn't work out the way they are hoping,

9:19 it would be nice to have a stable supply of good

9:22 old-fashioned human labor as a backup plan to keep their businesses going.

9:25 The argument that we are running out

9:27 of workers also conveniently supports policies like

9:29 skilled worker visas that became a bit of a political sticking point last year.

9:33 These tech companies in particular have benefited

9:36 greatly from programs like H-1B visas that let

9:38 companies employ expat workers on the condition

9:40 that they remain employed by the company.

9:43 This has introduced more competition into the already

9:45 saturated market for entry-level tech workers.

9:48 But it also has the convenient side effect that the people working

9:51 on these visas are dependent on their company to stay in the country.

9:54 So they are far less likely to negotiate for better pay benefits

9:57 or threaten to leave their role because they can't leave their role.

10:01 A paper published by the National Bureau

10:03 of Economic Research found that on average,

10:05 one additional H-1B worker in a firm crowded

10:08 out 1.5 other workers at that same firm.

10:11 Now, skilled immigration is a whole separate issue,

10:14 but it does clearly demonstrate what you probably already knew,

10:17 which is that big companies want a market with lots of workers,

10:21 all competing for a small selection

10:23 of jobs because that maximizes their negotiating power.

10:25 Now, where those workers come from has a lot to do with the third

10:30 hidden motivation that might help explain this new obsession with birth rates.

10:34 I don't want to dwell on it too

10:36 much because it is outside the confines of business,

10:38 economics, and the job market,

10:40 but it would be irresponsible to not at least acknowledge

10:44 that there are some ideological motivations behind this push as well.

10:48 Having lots of children pairs well

10:50 with traditional family values, general rules,

10:52 family planning debates, and of course,

10:54 having the population of the right kind of people.

10:57 How much the big voices on this topic

10:59 actually believe in this stuff is hard to say.

11:02 But if it supports their ultimate goals,

11:04 they are clearly happy to have it on their side in policy debates.

11:07 So yeah, maintaining a constant supply of workers, consumers, debt payers,

11:12 all in the correct cultural package clearly isn't something

11:15 that normal people are considering when choosing to have a family.

11:18 And they aren't exactly great reasons to be tailoring

11:21 policy so heavily towards encouraging people to have kids,

11:24 especially if they can't responsibly afford it.

11:26 Again, more on that soon.

11:28 But just because there are bad motivations mixed into this debate,

11:32 it doesn't necessarily mean that the threats posed

11:35 by changing demographics aren't to be taken seriously.

11:37 They do however need to be looked at pragmatically.

11:41 Here in America, we are not as far along in this fertility

11:45 trend as a lot of other countries in Western Europe,

11:47 and we are a long way behind the true outliers in Asia.

11:51 Taiwan, China, South Korea, and Singapore now have birth rates less than half

11:55 of their replacement rate of roughly 2.1 births per woman.

11:59 South Korea, in particular,

12:00 has a birth rate less than half of ours here in America,

12:03 and we are already told that we have a problem.

12:06 This is to show that things can still go a lot further,

12:09 but ultimately the trend has been towards fewer children across the world.

12:13 But this has also been happening at the same time

12:16 as other changes that are very important to consider in context.

12:19 Here in America, our labor force

12:21 participation rate has been declining since 1999.

12:23 Youth employment in most of Europe remains very high.

12:27 And even in places like South Korea,

12:29 with what many consider to be disastrously low birth rates,

12:32 the competition amongst young workers

12:34 for entry-level jobs is unbelievably competitive.

12:37 The point across all of these economies is

12:39 that if we really are running out of young workers,

12:41 we are doing a terrible job of using the ones we already have.

12:45 Now there are structural problems like skills gaps,

12:48 people taking early retirement, opting out of the workforce entirely,

12:51 or whatever the reason is given for this logical irony.

12:54 But whatever the true cause may be,

12:56 throwing more people at the problem is not a sustainable solution.

13:00 Even for immediate issues like funding pension systems,

13:02 the problem is that if birth rates continue

13:05 to decline and life expectancy continues to increase,

13:07 there will be more people taking out than putting money in.

13:10 So either the young people will be forced to contribute

13:13 more or the retirees will have to make do with less.

13:16 But if there really were no other solutions,

13:18 then this problem itself is an acknowledgement

13:20 that the whole system only works if there is

13:22 a continual supply of new people at the bottom to support the people at the top.

13:26 And with that simple breakdown, you might be able to see why some

13:30 people have just called this a generational Ponzi scheme.

13:33 But the thing is, there are other solutions that should

13:36 be at least considered alongside directly paying people to have children.

13:40 For you individually,

13:40 you should probably assume that you will need to self-fund your retirement.

13:44 Even if you're wrong,

13:45 it's better to have a nest egg and not need it than to need it and not have it.

13:49 On a larger scale, if workers really are becoming a rare commodity,

13:52 we should try to treat them as such.

13:54 making it easier for them to access the right

13:57 skills and engage with a job market that isn't

13:59 openly hostile will do a lot more for getting

14:01 people into roles than just making more people.

14:04 Additionally, when it comes to funding support for people in their old age,

14:07 the arithmetic doesn't need to rely on just increasing

14:10 the total number of people paying into the system.

14:13 It can also come from just receiving more

14:15 from the people who can afford it most.

14:17 Now, of course, the arguments around more effective taxation

14:20 on the ultra-wealthy individuals won't be new to any of you watching.

14:23 But when this becomes a problem of either getting the same money

14:26 from more people or getting more money from a small group of people,

14:29 you might be able to see why the same group

14:32 of wealthy individuals is supporting the former option rather than the latter.

14:35 One of the most frustrating things about this issue is

14:38 that a lot of people actually do want to have children,

14:41 but simply can't afford to raise them with the quality

14:44 of life they would want for those children.

14:46 For some, having a family has become a status symbol,

14:50 quietly indicating that people have the means to forgo some aspect

14:53 of their career and cover the rising costs associated with raising children.

14:56 For everybody else that is still thinking about the decision logically,

15:00 their mind isn't going to be swayed one way

15:02 or another by some tax credits or a baby bonus.

15:04 So, go and watch this video next to find out what is stopping

15:07 us from getting rid of the real barriers to people starting a family.

15:10 And don't forget to like and subscribe to keep on learning How Money Works.