Day: August 21, 2025

America is about to tumble off the edge of a massive demographic cliff.

The timing is no coincidence. The US birth rate peaked in 2007, with just over 4.3 million babies born that year. That number has dropped almost every year since, reaching a 30-year low of 3.8 million births in 2017. Last year, the rate was down to 3.6 million.

Now, those 2007 babies are turning 18 (ugh, I know). As they prepare to start college and enter the workforce, their transition to adulthood signals a new reality for universities, employers, and the whole of America’s economy. Every year from here on out — at least for the foreseeable future — colleges will face a smaller and smaller pool of prospective students and companies will see a drop-off in the number of potential workers.

Before long, industries that are already grappling with worker shortages such as healthcare and agriculture could reach a point of crisis. A report by the labor market analytics firm Lightcast found that the joint forces of baby boomers retiring and shrinking demographics will create a deficit of 6 million workers by 2032. That also means there will be fewer people contributing to Social Security while the number of retirees grows.

While elected leaders puzzle over strategies to boost births, employers and higher-education institutions are already scrambling to bridge the gap. Nathan Grawe, a Carleton College economics professor who is widely credited for coining the term ‘demographic cliff,’ says the problem will need to be attacked from multiple angles at once. “It won’t be solved by one silver bullet.”

Incentivizing Americans to have more kids has become a popular political talking point, particularly on the right. As part of Donald Trump’s “One Big Beautiful Bill,” parents will now receive a $1,000 investment account for every new baby they have between 2024 and 2028.

Population decline isn’t a uniquely American problem. According to a report from the United Nations Department of Economic and Social Affairs (UNDESCA), fertility levels below 2 births per woman are “becoming the global norm,” meaning that societies around the world are falling short of the required 2.1 births per woman to replace the population. The trend is especially pronounced in high-income countries where women are more likely to have access to birth control, higher education, and professional opportunities, all of which are linked to delayed childbirth, which in turn generally leads to fewer total kids. But women in many low- and middle-income countries are also having smaller families, even in places where marriage is nearly universal and childbirth isn’t delayed, such as India.

The country’s nearly 4,000 degree-granting colleges and universities have to come up with their own strategies for survival. For some, the challenge will be insurmountable.

With no single, clear-cut cause, the birth-rate decline is a problem without simple solutions. “I don’t believe there are any policy levers — at least, that we know of — that can make a big difference here,” says Wafa Orman, a labor economist at the University of Alabama in Huntsville. Social incentives like baby bonuses and parental leave help, Orman says, but not enough to flip the downward trajectory of new births.

That leaves the country’s nearly 4,000 degree-granting colleges and universities — the institutions most immediately affected by the demographic dropoff — to come up with their own strategies for survival. For some, the challenge will be insurmountable.

Parts of the US are already feeling the pain. “Because of out-migrations and lower fertility, the northeast quadrant of the country has been in this sort of decline for a while now,” says Grawe. Eleven of the 31 degree-granting colleges and universities that shut down in 2024 were in the northeast, according to federal data analyzed by the State Higher Education Executive Officers Association released by The Hechinger Report. The Federal Reserve Bank of Philadelphia predicts that as many as 80 more schools could close by 2029.

When a school shuts down, it derails its students’ lives. One recent study found that less than half of students (47%) displaced by college closures went on to re-enroll in another postsecondary institution. Of those that did re-enroll, less than 37% stuck it out long enough to earn a degree.

Even when schools manage to survive, the demographic cliff may leave them ill-equipped to serve all students. “Some smaller rural campuses are already seeing really diminished program offerings,” says Betheny Gross, research director at an EdTech nonprofit run by Western Governors University. That means already underserved communities end up with even fewer postsecondary options, which makes the members of those communities a lot less likely to pursue higher education, and which in turn diminishes job prospects. The Georgetown University Center on Education and the Workforce projects that by 2031, 72% of US jobs will require some form of postsecondary education or training, up from 68% in 2021.

For small-town America, college closures can mean the loss of a vital economic lifeline. In an instant, employers lose precious talent-recruitment pipelines, local businesses lose customers, and critical public services are wrung dry. The Chronicle of Higher Education reported that when Wells College shut its doors to its 350 students last spring, the upstate New York village of Aurora — home to just 255 non-student residents — was suddenly left without a quarter of its volunteer firefighters and a $200,000 tab to continue running its water-treatment plant, which the college had been operating for more than a century.

Though students and rural communities pay a particularly steep toll, the economic aftershocks are significant across the board. According to a 2024 IMPLAN analysis, each college closure leads to an average loss of 265 jobs, $14 million in labor income, $21 million in GDP, and $32 million in overall economic activity.

Grawe sums it up plainly: “Some parts of the country are going to face some really stiff challenges.”

Beyond academia, the demographic cliff will strain the entire US economy.

In a new report, the Congressional Budget Office (CBO) projects that by 2033, deaths will begin to outpace births, culminating in a smaller and older-skewing population. This pattern of demographic shrinkage leads to a shrunken labor force, which means less economic growth over time. Japan’s postwar trajectory gives a prime, and ominous, example of how it might play out in the US.

If the population plunge isn’t hampering the US’s relative edge in the global market, is slower growth really such a big deal?

In the 1950s, Japanese Prime Minister Shigeru Yoshida prioritized rebuilding the nation’s economy by encouraging corporations to offer lifelong job security in exchange for worker loyalty. This strategy helped Japan grow into the world’s third-largest economy, but it came at a cost: fertility rates dropped from 2.75 children per woman in the early 1950s to 2.08 by 1960. It has since dwindled to a historic low of 1.15 last year. The shift piled new pressures onto an already overtaxed workforce, while driving a more than trillion-dollar, or 20%, drop in the country’s nominal GDP since 2021. Last year, Japan lost its slot in the world’s top three economies, slipping to fourth place behind Germany.

“There are some studies that show that the difference in economic growth between the United States and Japan can be entirely attributed to demographics,” says Orman. “Japan’s growing more slowly only because they have fewer people, and especially fewer young people. So if our population starts to shrink, we should expect to see the same thing happen.”

If America’s demographic cliff were happening in isolation, it would present serious questions about the nation’s ability to maintain its position among the world’s major economic powers. But population decline is affecting a majority of countries around the world. As of 2024, the US birthrate remained higher than in nearly all of Europe, the Russian Federation, South Korea, Brazil, Japan, and China, according to UNDESCA’s report. The situation presents an interesting thought experiment: If the population plunge isn’t hampering the US’s relative edge in the global market, is slower growth really such a big deal?

Orman proposes a longer view. “Most innovation comes from young people,” she says. “Young people are usually the ones that are more creative, have new ideas, and see things in a different way. Once you get older, you have the wisdom that comes with age, but you are less creative than you were in your youth.” An aging population can be a detriment to innovation and progress, which is a potential detriment to societies everywhere.

So what happens now? First, the bad news: A complete reproductive rebound is probably off the table. There is no precedent for pronatal policy measures raising birth rates enough to get population counts back on track, and certainly not before 2033. According to the CBO’s report, the only surefire way to do that is by expanding legal pathways for immigration to the US — a solution rife with political friction. Colleges, companies, and communities will have to adapt to the hands they’ve been dealt.

The good news is that some early strategies to adapt have already shown potential.

Jenny Petty, vice president of marketing and communications at the University of Montana, says that the school saw a 40% decline in enrollment between 2011 and 2019. It has since doubled down on targeting non-traditional student populations through community-college licensing programs and workforce-development training partnerships with regional employers. The university has also focused on improving student retention, with admissions counselors shifting away from recruitment to prioritize meeting one-on-one with new students. Those efforts have paid off: Petty says that the university has seen eight consecutive semesters of enrollment growth, and retention is up to 74.8% — well above the national average of 68.2%.

The University of Montana’s multi-pronged approach reflects the kind of strategy that several higher-ed experts say will be necessary for colleges and universities’ survival through the demographic shake-ups ahead. Student retention will be an increasingly critical piece of that puzzle. Employers and communities will similarly need to find ways to make the most of fewer workers and residents, whether by leveraging new technologies or finding creative solutions for developing young people’s skills and economic capacity.

“I hope that we’ll see some real attention to student success, and there are institutions that have already gotten ahead of the demographic contraction,” says Grawe, the Carlton College economist. “A 15% decline in enrollments is very challenging for many tuition-dependent institutions, but it’s not happening all at once. It’s happening bit by bit, year after year. So that’s a challenge, but it’s a workable challenge.”

Kelli María Korducki is a journalist whose work focuses on work, tech, and culture. She’s based in New York City.

Despite what you may have seen on the internet lately, Las Vegas is not dead. The casinos are not empty. The streets aren’t bare. If I’m being honest here, I wouldn’t have minded a little less crowding during my little mid-August gals’ jaunt to Sin City in an ill-fated attempt to see Kelly Clarkson, who canceled her residency there this month. But the vibe in Vegas is different. It’s a slow summer, and it shows.

Touristically speaking, this has been an unfun year for Vegas. The Las Vegas Convention and Visitors Authority says visitor volume to the city fell by 11.3% in June compared to the prior year. Convention attendance and hotel occupancy declined, too. The total number of visitors is down 7.3% over the first half of 2025. Gaming revenue is up, a signal that the people who are going are still gambling. But consumer spending, including at restaurants and bars and apparel and jewelry retailers, is down millions of dollars over the last 11 months compared to the prior stretch. Some casinos have laid off workers.

Why this is happening doesn’t have one straight answer. A lot of factors are in play — the rocky state of the economy, tighter US immigration policies, hangover effects from the California wildfires that have some would-be visitors staying home. The tentpole events that drew in scads of visitors in recent years, such as March Madness and the Super Bowl, aren’t around this year for a 2025 boost. There are still Formula 1, the Raiders, and whatever is going on with the Sphere, which is hosting the Backstreet Boys, but those attractions are extra pricey in a moment when many travelers are feeling extra price sensitive.

Las Vegas has relatively recently developed a reputation for being expensive and for nickel-and-diming people at every opportunity. The costs of plane tickets, hotel rooms, food, drinks, and even parking have skyrocketed. The nature of the city has changed, too. Instead of existing as America’s slightly seedy city of vice, Vegas has gotten a sort of glow-up in an attempt to broaden its appeal. The upside: A broader audience might be up for a trip to Vegas than in the past. The downside: Vegas now resembles so many other destinations that it loses out to similarly priced (or even cheaper) competitors, especially if visitors aren’t having a bang-up time.

“You’re starting to change the mentality of the visitor where they’re thinking, ‘Well, I could go to Las Vegas, but it’s going to be a pain in my neck, or I could go to Cancún,'” says Michael Schoenberger, a professor of hospitality management at the College of Southern Nevada. “It’s a cumulative effect that’s just now starting to show up.”

While the “what’s wrong in Las Vegas” conversation is peaking right now, things have been shaky for a while, says Amanda Berlarmino, an assistant professor of hospitality at the University of Nevada, Las Vegas. “To be honest, we’ve struggled with visitation since the pandemic,” she says.

Asian tourism has not recovered, she says, and this year, there’s been a decline in other international visitors, including, importantly, Canadian tourism, thanks in part to President Donald Trump’s antagonism towards America’s neighbors to the north. International visitors tend to do longer stints than domestic visitors, who might just pop down for a weekend, which makes their pullback cut a little deeper.

We are a more expensive market now than we’ve ever been before.

The domestic picture isn’t especially pretty, either. Worries about the economy may be keeping Americans at home. A disproportionate amount of Las Vegas visitors tend to come from California, but the number of vehicles crossing the California-Nevada border on Interstate 15 declined by 4.3% in June compared to the same month last year. Berlarmino chalks much of it up to the fires that hit Southern California at the start of the year. Schoenberger notes that disruptions from highway construction have been a problem, too.

Steve Hill, the president and CEO of the LVCVA, says while these issues are not ideal, Las Vegas has seen worse in the recent past. “It is not the crisis situation like we’ve seen through Covid or the extended downturn through the Great Recession,” he says.

Beyond some of these more acute issues, one major complication that’s gradually been growing may finally be reaching an inflection point: pricing. To put it plainly, Las Vegas is hella expensive.

The longtime proposition of Las Vegas was that it was relatively cheap to get there and stay there, because once people got there, the amount they spent on gambling at the casinos and resorts more than made up for it. But that’s no longer the case. Flights to the city may still be slightly less expensive than some destinations, but they’re not that far from trips to New Orleans, Miami, or Washington, DC. The same goes for hotels, though prices can vary widely. The typical clientele has also shifted. While Las Vegas’ traditional market was people over 60 who tended to be value-conscious, now more people are coming in their prime earning years and demanding more premium services and experiences. Resort economics have changed, too. Gambling is no longer so important as a revenue driver — it’s hotel rooms, food and beverage, and events. Combine all of that with inflation and consumer wallets being squeezed, and you can see why some visitors may shorten trips or just scrap them altogether.

“We are a more expensive market now than we’ve ever been before,” Berlarmino says.

Many Las Vegas casinos and hotels started charging for parking in the mid-2010s, and they’re piling on resort fees, too. My recent four-night stay at the Cosmopolitan Hotel included $249.44 in resort fees and associated taxes. While there are ways to do Las Vegas that aren’t so costly — staying in budget or value hotels away from the Strip, buying food and alcohol at a store, or abstaining from drinking entirely — all the little add-on fees can make people feel like they’re being ripped off.

“Since starting right before the pandemic and then continuing after the pandemic, we’ve introduced a lot of pain points to the visitors that historically were not present,” Schoenberger says. “Why we charge people to drink what drinks cost in New York City, I have no idea.”

Hill says that the narrative around the cost of Vegas is “overblown,” and says there are “all kinds of ways” to achieve a budget-friendly experience. “We’ve got 150,000 rooms and they, right this minute, run from $9 probably to $600,” he says. The slowdown in visitors has led some hotels to cut their prices, he adds.

Why we charge people to drink what drinks cost in New York City, I have no idea.

Gambling being more widely available around the US is both a blessing and a curse for Las Vegas, which used to be one of two major places in the states, along with Atlantic City, where you could legally bet. On the one hand, people who have the gambling itch can probably find a place to scratch it within a couple of hours from their homes. On the other hand, the proliferation of gambling may also mean more people get the itch.

Chris Grove, a sports-gambling-industry investor at Acies Investments, tells me the growth of sports betting has been “nothing but a net positive for Vegas.” It’s given people a taste of betting, and if they like it, it might inspire them to go to the biggest place in America there is to do it.

Grove compared it to the poker boom of the early 2000s. “Online poker got really popular, and you ask the question: Did that do anything to dissuade people from coming to Vegas to play poker? And the answer is no,” Grove says.

Plus, summer is a slow time for sports gambling. If people were sitting home on their couches on sports betting apps instead of going to Vegas, they’d be doing so during the NFL season and March Madness.

Other Vegas developments have been a mixed bag. Formula 1, back in Vegas since 2023, is an attraction, but preparing for it has caused transit disruptions, Schoenberger says. In the company’s second-quarter earnings call, MGM Resorts CEO Bill Hornbuckle said that Las Vegas remains “fundamentally solid” and blamed the company’s 9% drop in earnings from its Strip resorts on a “uniquely disruptive remodel” at its MGM Grand and slow mid-week bookings at two of its value operations. Caesars said in its second-quarter earnings that it had seen decent gaming results in Las Vegas during the period, even in the face of weaker demand for its hospitality offerings.

“The top third-ish of the market is still doing exceptionally well,” Hill, of the Convention and Visitors Authority, says. It’s when you get into the middle third that “it becomes more acute, the more budget-conscious the visitor needs to be.”

It’s tempting to ascribe to Las Vegas’ slowdown some greater meaning. Maybe it’s just a temporary blip, but what if it’s a recession indicator? Or a sign of the times and proof that Las Vegas is over?

Declaring that the slow summer is the end of Sin City as we know it would be a bit premature. The same goes for calling it a surefire sign of a recession. But it does seem like Vegas is in a sort of weird limbo, even if it’s only temporary. It’s a place that feels stuck in time — besides some of the outfits and what’s on the TV, you might not know if you’re in a casino in 2010 or 2025. After all, DJ Pauly D of “Jersey Shore” fame is playing. Where it is getting more modern, like the additions of the Sphere and the NFL’s Raiders, it’s still figuring out the logistics. It’s responding to consumer demand for a higher-end experience, but still faces with consumers who may not be prepared to pay such high-end prices. If a trip to Vegas is going to run you the same as a vacation to New York, San Francisco, Miami, or even Mexico, you might think twice about how much of a premium you actually put on the Sin City experience, especially when the main differentiator is that in Vegas, you’re surrounded by tables and machines designed to suck money out of you.

To be clear, Las Vegas is lovely. Gambling is fun, as long as it is done responsibly. The shows are great, the hotels are comfy. Its nightlife offers a good amount of (responsible) debauchery, and its daylife is fairly family-friendly. When it’s not sweltering hot out, the outdoor stuff is really great, too. Despite the videos, pictures, and memes floating around online, it was far from empty. (Also, anywhere could be painted as bare if you go at the right time of day.)

The city might just be in the midst of a slight pivot moment — not that it’s changing its identity, but it’s finding an identity in a culture and economy that are changing around it.

“Las Vegas is still attractive to people,” Schoenberger says, “because it’s a place where you can go and no matter where you’re from in the world, it looks different.”

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.