Waite assures me that the ratio of Squib births to wizard births is decreasing each year, but without the corresponding overall depopulation that we saw beginning in the 1700s. Critically, when two non-magical Arkhamites have a child, the odds of its being magical are close to fifty percent. They are "Muggle-borns," but apparently Arkham has so many more than we do because their policy makes it profoundly more likely that "Muggles" with incomplete wizarding genes will meet. In short, if your theories of our history are correct, the Arkhamites are doing Seclusion the way we should have from the start: including all these people who are non-magical but still have some magic genes. What can I say? It does seem to work.