Gillaspy demographic change
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Transcript of Gillaspy demographic change
Minnesota and the New Normal
Tom Gillaspy, State DemographerMarch 2012
Minnesota Population Growth
• Minnesota added 384,446 people or 7.8% from 2000 to 2010
• Minnesota’s 2010 population is 5,303,925
• Minnesota and South Dakota (7.9%) led the frost belt in percent population growth
• Minnesota ranked 26th in percent change and 21st in number change
• Texas added 4.3 million and Nevada 35.1% to lead the nation
• Minority population growth accounted for two thirds of total growth 2000-10. Percent minority population increased from 11.7% in 2000 to 17% in 2010
Population Change 2000-10 Of Minnesota Metropolitan Areas
2010 Census, Minnesota portions of metro areas only
Change In Households Adjusted to 2010 Census And 2011 Building Permits
Census reported building permits times occupancy and PPH at 2010 level yields 8500 in 2011
Suburban And Exurban Growth Has Slowed Dramatically
Census estimate adjusted to 2010 Census
Is Exurbanization Over?
• An aging population may want a smaller house more conveniently located
• The Millennial Generation may have a dramatically different housing preference
• Rising fuel prices may change housing location and characteristics
Percent Of Americans Preferring To Live In a City (versus suburbs or rural/small town) By Age
National Association Of Realtors, 2011 Community Preference Survey
We Are Headed to a New Normal
• The Great Recession Is over, but we will not return to where we were
• We are moving to a New Normal• Minnesota is not alone—this a global
phenomenon• Those who recognize this and adapt first will
be most successful• The next four years will be critical to
Minnesota’s future
Unemployment Rate—Minnesota Is Recovering Faster Than The Nation
5.7% v 8.5% in December 2011
Mn DEED
Increases in Minnesota’s 65+ PopulationA Major Contributor To the Fiscal Trap
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
70s 80s 90s 00s 10s 20s 30s
Change
Decade
Most Minnesota Household Growth 2010-20 Will Be Older Empty Nesters And Older Living Alone
By 2020, empty nesters will be the largest type of family
Minnesota State Demographic Center projection
Projected Average Annual Growth 2010-20 In Selected Disabilities--Minnesota
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
Total Population
Self Care Dis Hearing Dis Vision Dis Ambulatory Cognative
Health Care Spending Jumps After 55U.S. Health Care Spending By Age, 2004
$1,855$1,074 $1,445
$2,165$2,747
$3,496
$6,694
$9,017$9,914
$3,571
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Source: Agency for HealthCare Research and Quality, Medical Expenditure Panel Survey,data for per capita spending by age group in the Midwest. Excludes spending for long-term care institutions.
Annual Percent Change Minnesota Total Labor Force
Revised January 2012
Some Other Considerations In The Labor Market
• More retirees and fewer younger workers should improve opportunities for job seekers
• But employers may respond in other ways1. Increase focus on productivity gains, filling jobs on
less than a one-for-one basis2. Relocate jobs to other, more favorable labor markets3. Recruit workers from other markets
• Alternative responses may be heightened with a growing skills mismatch.
There Are Only Two Ways An Economy Grows
1. Increase the number of people making stuff (and services)—labor force growth
2. Increase the amount of stuff (and services) each person makes—Per worker productivityWith slowing labor force growth, productivity will need to increase rapidly to maintain economic growth
Overall US Economic Growth Slows As Labor Force Growth Slows
US BEA, McKinsey Global Institute, We will need a 2.3% annual increase in productivity just to reachour 20 year average growth of 2.8%
Total Fertility Rate Of Selected Countries 2009
United Nations Population Division, 2.1 is the critical rate below which aging begins
The “New Normal” Probably Means
• Slower economic growth
• Labor and talent will be the scarce resources
• A single-minded focus on productivity
• Chronic government deficits & cuts in service
• Worries about how to pay for past promises
• Disruptive events/innovations more frequent
• A whole new set of opportunities
Three Possible Government Responses To The “New Normal”
1. Cut government programs—not just “theirs” but also “yours”
2. Increase taxes--not just “theirs” but also “yours”
3. Increase productivity in both the private and public sectors
Productivity Is Not Just Making Things Cheaper
• Productivity is also
Making things better—QualityExamples; Increased high school graduation rate, reduced recidivism rates
Making better things—InnovationExamples; new approaches to volunteerism, adapting new technologies for service delivery
The pressure for disruptive innovation is increasing
3 R’s of Opportunity
• Restructure government costs
• Replace retiring government workers wisely
• Re-engage the growing retiree population
The Fiscal Catch-22
If we don’t make the necessary public investments in human capital, research and infrastructure, then we won’t have the productivity gains needed to provide the resources to make those investments in the future and pay for the promises we have made.
“I skate to where the puck will be, not to where it has been.”Wayne GretzkyFamous Canadian Philosopher