PetSmart, Inc. (PETM), Petmed Express Inc (PETS), VCA Antech Inc (WOOF): The Surprising Economic Consequences of Owning a Pet

What happens when pets outnumber kids?
Look no further than Japan and Italy (two countries similarly obsessed with pets) to see what can happen when pets are more prevalent than children: The fertility rate drops.

Japan and Italy both have fertility rates of 1.4, according to the CIA’s World Factbook. That’s well below the “replacement level” of 2.1 necessary to maintain a steady population.

This low fertility rate eventually forces tough policy decisions. With no extended family to help care for aging parents, adult children become increasingly in need of governmental help (an issue China will similarly face because of its one-child policy). Unfortunately, this help is sought just as the tax base begins to decline because of the shrinking population of workers.

A smaller number of workers attempting to care for a larger number of elderly? Sounds like the situation we’re facing right now with Social Security and Medicare.

The only solutions are either an increase in taxes or a decrease in benefits — neither of which is easy to stomach, and both of which have consequences of their own.

So, no more pets?
Of course, this doesn’t mean Americans should abandon pets.

Jonathan Last does acknowledge that the decline in the fertility rate (in America, Japan, and Italy) can’t be attributed solely to a rising fondness for pets. It’s an instance of correlation, not direct causation.

But the correlation is interesting, nevertheless — and a fascinating, fresh way to spark much-needed conversation and debate about what Last calls America’s “unspoken one-child policy.”

Adam Wiederman has no position in any stocks mentioned. The Motley Fool recommends PetSmart, Inc. (NASDAQ:PETM) and VCA Antech Inc (NASDAQ:WOOF).

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