#economy #marriage #personalfinance
I don't want to sound like a Thanksgiving dinner, but, do you ever plan on getting married? If the answer is yes, congratulations in advance. If the answer is no, you're definitely not alone. Well, I mean technically you are, but you're not alone in the idea of opting out of marriage. In fact in the UK, Japan, China, and right here in the US, the rate of marriage has been declining in record numbers. That's also led to a decline on the rate of births. This is even more true among the middle and working class.
The Thriving Center of Psychology surveyed Gen-z and Millennials and found that 2 in 5 people thought that marriage was an outdated tradition. What was interesting was that even though a lot of people think it's outdated 83% still hope to be married one day. Looks like people deep down are still yearning for that lifelong commitment to spend the rest of their lives with one person. So why aren't they tying the knot? Well, 73% of those people said that it's too expensive to get married in the current economy... And I'm not just talking about the wedding, although that is a part of it.
According to the wedding website, The Knot, the average wedding in the U.S. is about 30 thousand dollars. A survey by LendEDU showed that about one-third of couples went into some kind of debt, whether it was credit card, personal loans, or home equity loans, in order to finance their wedding or part of their wedding. The average amount borrowed was almost $12,000 dollars. And that's just day 1 of marriage. Imagine being a newlywed and already being $12,000 in the hole on day 1.
But this trend of declining marriages isn't just in the United States. About 89 percent of the worlds population are located in countries with declining marriage rates. The OECD is the Organization for Economic Co-operation and Development. They have 38 countries, most of which are considered high-income economies and rank highly in the Human Development Index. According to their data in 1970 they recorded about 7-10 marriages per 1000 people, over the next 25 years that fell to 5-7, in 2019 that number declined to 4-6.
I'm curious what those numbers will look like 20 years from now with all the socio-economic issues surrounding marriage that don't seem like they're changing anytime soon. Some countries are worried about the economic implications because of the declining birth rate that's correlated with the falling marriage rate. Japan for example has the world's third largest economy and also the world's oldest population. This is becoming an economic crises because Japan had fewer than 800,000 births in 2022.
That's the lowest on record since 1899 when it began tracking births and its the 7th year in a row it's seen a decline. Without a new workforce to replace the outgoing one, governments around the world will see a decline in workers aka income tax payers aka people who fund said governments.
In China, it's expected that by the year 2050, the working population will be reduced by 10% while seeing the number of people that reach retirement age, double.
Here in the U.S., the rate of marriage has dropped by 60 percent since the 1970s, although the age of first time marriages has actually increased meaning those that are in their first marriage are seeing lower divorce rates than in years past. What's important to note here is that is that rate of marriage among higher income couples has actually remained about the same for the last 40 years.
According to the federal reserve married couples have a much higher median net worth than unmarried couples who live together or people who are single, but that doesn't mean getting married is a good financial investment, it seems to be more that people getting married are already earning higher wages before deciding to tie the knot. Marriage isn't just about finding the right person, but also about being in the right financial situation because it comes with a lot of expenses. Marriage usually leads to buying a home and later buying a bigger home, and getting bigger cars due to a growing family.
I'm going to try to navigate this next section as best as I can because I don't want to turn this into some men vs women bash session. There's plenty of that type of content on the internet and this channel focuses more on the current economy and how it affects you. That said bare with me because I know a lot of people are thinking about all the social impacts on marriage and relationships today and while that does play a part, the main reason is, was, and will always be good old fashion money.
In the 1960's we had a cultural shift that increased female participation in the workforce. Back then it was common to raise a family on one income and according to the Pew Research Center about 70 percent of households were single income households with the father being the only one who was employed.
