The Generational Unit

The Demographic Pattern

The American total fertility rate has, across the post-2008 period, fallen from approximately two point one (the replacement rate) to approximately one point six (the contemporary rate).¹ The decline is not distinctively American; comparator developed countries have experienced similar patterns across the same period (Germany at approximately one point five, Japan at approximately one point three, South Korea at approximately zero point seven, the broader European pattern at the one point three to one point seven range). The decline’s structural causes have been the subject of substantial demographic and economic literature; the principal explanatory factors are the cumulative carrying-cost pressures that the previous essays in this series have documented at the household level.

The American household-formation rate has followed the same pattern. The age at which young Americans form independent households (move out of parental residences, marry, have first children, purchase first homes) has risen substantially across the post-2008 period.² The Joint Center for Housing Studies analysis described in The Quiet Foreclosure documented the eight-to-ten-percentage-point delay in millennial homeownership relative to comparable Gen X and Boomer ages; the delay extends to the broader categories of household formation, with the median age at first marriage, first child, and household formation each having risen by approximately three to five years across the post-2000 period.

The structural causes of the household-formation delay are the cumulative carrying-cost pressures the broader series has documented. The housing carrying-cost cascade of The Quiet Foreclosure operates against the household-formation transaction (the first-time-homebuyer purchase that the post-war American household-formation framework had treated as the structural starting point for the household). The healthcare extraction mechanism of The Accidental System operates against the household-formation transaction (the medical exposure that the family-formation increase produces, against the inadequate insurance frameworks the contemporary employer-tied system provides). The education-debt cascade of The Credential and the Debt operates against the household-formation transaction (the credential-and-debt mechanism that the contemporary financing framework imposes on the cohort whose household formation is being delayed). The AI labor cascade of The Great AI Implosion operates against the wage trajectory the household-formation transaction had structurally assumed. The combined effect is the household-formation environment that the contemporary American demographic data exhibits.

The Family-Policy Absence

The American federal family-policy framework is, in the comparative-developed-country context, distinctively limited.³ The United States is the only major developed country without a national paid-parental-leave framework; the American childcare-affordability landscape exhibits costs that, in many metropolitan areas, exceed the cost of college tuition; the American refundable-child-tax-credit framework, which had been substantially expanded for one year in 2021 under the American Rescue Plan, was not extended and the framework substantially reverted to the prior pre-2021 structure.⁴

The Family and Medical Leave Act of 1993, the principal contemporary federal family-policy statute, requires covered employers to provide twelve weeks of unpaid leave for specified family and medical purposes.⁵ The Act’s coverage is, in operational terms, substantially limited: the Act applies only to employers with fifty or more employees, exempting approximately fifty percent of American private-sector employment; the Act’s leave is unpaid, which substantially limits the operational accessibility of the leave for the substantial majority of American households whose household-budget structure cannot absorb twelve weeks of zero earnings. The comparable comparator-country frameworks (the European Union’s directive frameworks, Canada’s Employment Insurance parental-benefits framework, Australia’s Paid Parental Leave Act) provide paid leave at substantially the leave-period the FMLA requires unpaid, with the structural consequence that the comparator-country household-formation frameworks operate under substantially different family-policy conditions than the American framework.

The American childcare-affordability landscape is the second principal structural feature. American childcare costs, on the contemporary data, exceed the federal-government’s affordability threshold (seven percent of household income) for approximately the substantial majority of American households.⁶ The Child Care and Development Block Grant program, the principal contemporary federal childcare-subsidy framework, reaches approximately one in seven eligible families. The structural alternative — a public childcare option that the comparator democracies operate under — has been advanced repeatedly through American legislative attempts (the Build Back Better Act of 2021 included a substantial childcare-affordability component that was substantially eliminated in the legislative compromise that became the Inflation Reduction Act of 2022) without enactment.⁷

The Child Tax Credit framework is the third principal structural feature. The American Rescue Plan Act of 2021 substantially expanded the Child Tax Credit for 2021 only — increasing the credit amount, making the credit fully refundable (allowing low-income households without sufficient federal tax liability to receive the full credit as a tax refund), and providing the credit through monthly advance payments rather than the prior annual lump-sum at tax filing.⁸ The expanded credit’s empirical effect across 2021 was substantial: child poverty fell to its lowest level on record, with the credit’s expansion estimated to have lifted approximately three million children out of poverty.⁹ The expansion was not extended into 2022, principally on the framework that the legislative coalition required for the extension did not assemble; the Child Tax Credit substantially reverted to its prior pre-2021 framework, and child poverty substantially returned to its prior levels in the subsequent year.

The combined absence of the family-policy framework — the absence of paid parental leave, the inadequate childcare-affordability framework, the abandoned Child Tax Credit expansion — is the structural feature that the contemporary American household-formation environment operates against. The framework’s absence is not principally a function of any specific policy debate; it is the cumulative outcome of the broader political-economy lock-in that the campaign-finance essay diagnosed, operating against the family-policy framework that the comparator democracies have demonstrated to be effective at substantially the operational scale required.

The Two Parties’ Two Failures

The Democratic-coalition position on family policy across the post-2010 period has been substantially in favor of the framework the previous section described. The Build Back Better Act of 2021 included substantial paid-parental-leave, childcare-affordability, and Child Tax Credit components; the package was substantially eliminated in the legislative compromise that became the Inflation Reduction Act. The Democratic-coalition’s specific failures on the structural reforms have followed the pattern the broader series has documented: the legislative reform attempts have been advanced, have not been enacted, and the reasons for the non-enactment have included the structural barriers the campaign-finance and electoral lock-ins have institutionalized.

The Republican-coalition position has been structurally different and has been internally inconsistent across the post-2010 period. The Republican-coalition’s traditional family-policy framework had been substantially limited to the rhetoric of family values without substantive policy commitment; the contemporary Republican-coalition framework has, on some axes, expanded the policy commitment (the 2017 Tax Cuts and Jobs Act expanded the Child Tax Credit modestly; the contemporary Republican-coalition framework includes some support for paid-parental-leave proposals through specific legislators). The Republican-coalition framework has not, however, advanced the structural reforms — public childcare, paid parental leave at scale, the refundable Child Tax Credit framework — that would substantially address the family-policy absence the previous section described.

The convergent failure of the two parties has been the absence of the comprehensive family-policy framework that the comparator democracies operate under and that the American demographic and economic data structurally requires. The framework has been advanced repeatedly; the framework has not been enacted.

What’s at Stake

A platform position on family and children policy — proposed for addition to The Intelligent Party’s positions framework — would, on the framework the previous sections have described, address the structural feature that the broader household-extraction mechanisms operate against. The component would have approximately the following elements.

The first element would be the establishment of national paid parental leave at twelve weeks (with longer leave for specific categories), funded through a combination of payroll-tax contribution and federal subsidy, on the framework that the comparator democracies operate under. The component would address the structural absence the FMLA framework has produced.

The second element would be the establishment of universal pre-kindergarten and substantial childcare-affordability subsidies, funded federally with state implementation, on the framework that the Build Back Better Act would have substantially established. The component would address the childcare-affordability framework the previous section described.

The third element would be the restoration and permanence of the 2021 Child Tax Credit expansion. The framework — increased credit amount, full refundability, monthly advance payment — has been demonstrated to operate effectively at substantial scale and to produce substantial child-poverty reduction. The component would address the framework the post-2021 legislative compromise eliminated.

The fourth element would be the broader integration with the Country Profit Sharing framework that the platform’s taxation position establishes. The CPS framework, as the platform’s taxation position describes, would consolidate the contemporary fragmented social-program apparatus into a single shared dividend; the family-policy components — paid leave, childcare affordability, child-tax-credit equivalent — would be operationally integrated with the CPS framework to produce the comprehensive family-economic-security framework the comparator democracies operate under.

The political coalition required to enact the framework does not currently exist. The conditions under which it might assemble are the conditions the broader fourth-settlement framework requires.

The realism the broader series has called for, applied to family and children policy, is the realism that the structural reform is achievable on the framework the comparator democracies have demonstrated; that the framework’s operational application requires the institutional and legislative capacity that the broader fourth-settlement framework would establish; that the principal obstacles to its enactment are the broader structural features the broader fourth-settlement framework would address.

The generational unit is the household whose formation the contemporary American carrying-cost environment is structurally constraining. The structural support of the household formation is the assembly the broader fourth-settlement framework requires. The reconstruction is the assembly the next decade will determine.

The American demographic context that the previous section described — the fertility rate substantially below replacement, the household-formation delay, the broader pattern of economic-pressure-driven family-formation suppression — is the structural problem that the family-policy framework would address. The contemporary policy framework has substantially declined to address it. The structural alternative is operating in every comparator democracy with which the United States routinely compares itself. The American refusal to adopt the framework has been the operational outcome of the structural-political features the broader series has documented; the conditions under which the refusal becomes operationally untenable are the conditions the broader settlement requires.

The household that cannot be formed is the household that the contemporary American economy will, on the demographic trajectory the contemporary data exhibits, increasingly fail to produce. The structural correction is the assembly the framework the present essay has proposed describes.

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Notes