Making the Case: THE NEW ECONOMY of an Aging Population in ...€¦ · – Increase of $2.6 in GDP...

Making the Case: THE NEW ECONOMY

of an Aging Population in Metropolitan

Atlanta Mike Alexander, AICP Research and Analytics Division Manager Atlanta Regional Commission [email protected]

For the First Time in Forever…… Fewer Births and less Migration Means FEWER “New” People

Fertility

http://hailtoyou.wordpress.com/2012/10/07/the-usas-total-fertility-rates-by-race-1980-to-2010/

http://hailtoyou.wordpress.com/2012/10/07/the-usas-total-fertility-rates-by-race-1980-to-2010/

Population Growth Comparison

United States 20-County Area Rest of Georgia (139 Counties)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2010 Change 2010-40

-500,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2010 Change 2010-40

-50,000,000

0

50,000,000

100,000,000

150,000,000

200,000,000

2010 Change 2010-40

Source: ARC Plan 2040 Transportation Update (2014) (20- County Area)

Long

evity

w

ww

.gap

min

der.o

rg

http://www.gapminder.org/

Age and Sex in USA: 1945-2060

Source: Census Bureau National Projections 2012

Who is Working is Changing

0.253

0.316

0.504

0.000

0.100

0.200

0.300

0.400

0.500

0.600

1990 2000 2010 2020 2030 2040

Ages 65-69 Ages 70-74 Ages 75+

0.000

0.100

0.200

0.300

0.400

0.500

0.600

0.700

0.800

0.900

1.000

1990 2000 2010 2020 2030 2040

Ages 16-19 Ages 25-29 Ages 45-54


NEW ECONOMIC STRENGTH

Billion in 65+ Wages

Actually, it is $960 million (2013)

• In 2013 Q1, those aged 65+ held 3.7% of the jobs in the 10-county ARC area

• The average monthly wage is $1,208 for those 65+, which does lag the overall average monthly wage for all others (18-64) in the workforce at $1,400

• …For some higher-paying industries, e.g. Professional Services, Mgmt. of Companies, average wages for 65+ are higher

• let’s compare to 2007 (just 5 years ago)… then to 2000

Source: Census Bureau Quarterly Workforce Indicators (ARC Analysis)

Growth in the 65+ Workforce

• From 2000-2007, the jobs for those 65+ did increase 16,802, BUT – Jobs for 18-64 increased 119,786

• The explosion in 65+ happened in recession and recovery period of 2007-2013

• Between 2007 and 2013 (recession and recovery), the 65+ workforce has increased by 14,846 jobs while the 18-64 job base has declined by 78,656 jobs!

• So jobs filled by 65+ went up almost 30%, while jobs filled by those aged 18-64 fell by 4%

2000 34,000

67,000 Increased by Almost 100%

2013

Source: Census Bureau Quarterly Workforce Indicators (ARC Analysis)

Rehearsing the Future using Economic

Forecasting

WHAT DOES REMI SAY? REMI Econometric Model Features

• Incorporates transparent and robust economic linkages built on proven methods and theory

• Each model is custom built to match regional client specificity

• Measures economic impacts and responsive demographic and economic changes over time

• Model incorporates four unique quantitative methodologies

Integrated Dynamic

Structural Customized

Source: REMI

PresenterPresentation NotesDynamic … needs work

Age Population Growth

0

100

200

300

400

500

600

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85+

In T

hous

ands

1990 To 2013 To 2040


Age Composition Change

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80-84 85+

Perc

ent o

f Tot

al P

opul

atio

n

1990 To 2013 To 2040


0

200

400

600

800

1000

1200

1400

1600

1800

2000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

Ages 85+

Ages 80-84

Ages 75-79

Ages 70-74

Ages 65-69

Ages 60-64

Extreme Aging

14

Thou

sand

s


82% 78% 71% 66% 61% 54%

17% 18% 22%

23% 25%

26%

4%

9%

1% 2% 3% 4% 7% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030 2040

Regional Age By Race/Ethnicity 1990 to 2040

65% 54%

41% 37% 37% 34%

30%

33%

34% 33% 30%

27%

8%

9%

8% 16% 21% 24% 30%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030 2040

66% 51%

42% 40% 36% 35%

29%

32% 37%

34% 32% 30%

7%

9%

3% 12% 14% 17% 23% 26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030 2040

74% 63%

52% 48% 45% 41%

23%

27% 31%

31% 30%

29%

7%

9%

2% 6% 10% 13% 17% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1990 2000 2010 2020 2030 2040

Age 0-14 Age 15-24

Age 25-64 Age 65+


Population Determinants

2000

3000

4000

5000

6000

7000

8000

9000

-10

0

10

20

30

40

50

60

2007 2010 2013 2016 2019 2022 2025 2028 2031 2034 2037 2040

Total Population in Millions

In T

hous

ands

Components

Net Econ migrants - All Natural Change Total Population


Region’s Employment Opportunity

15.746

8.465

4.459

21.228

0

5

10

15

20

25

2011 2015 2019 2023 2027 2031 2035 2039

in T

hous

ands

Economic Migrants by Race/ Ethnicity

White-NonHispanic Black-NonHispanic Other-NonHispanic Hispanic


1990 Labor Force


Labor Force 2013


Labor Force 2040


Fiscal Effects of an Aging Population Dimensions of Regional Growth

and Change

Source: REMI, Fulton “Graying of America” webinar

Fiscal Effects of an Aging Population




Economic Benefits of “Retirees”

• Retirees bring incomes earned from outside of region

• Pension Payments, Social Security, and other retirement savings

• Outside income spent on housing, health care, consumer goods and services

• Attracting (or retaining) retirees can be viewed as an “export industry” of the region, similar to tourism



Retirement Migration and the Economy

• Demand Side – Retirees have significant spending on goods and services – Consumption patterns differ for retirees (e.g. more health

care spending)

• Supply Side – Loss of labor force as baby boom moves from working to

retirement – Regions need to replace this labor force through natural

growth or in-migration


Source: REMI

REMI Retirement Migration Scenario

• FOR THE 20-COUNTY AREA; ARC TRANSIGHT MODEL

• Assumptions – Annual increase of 1,000 65+ retired

migrants per year to 20-county economy from 2015-2040

– Distribution weighted on 65+ population in each county

– No explicit costs considered • Potential Impacts (DRAFT; not “net”

benefits) – Increase of $40B in Personal Income

2015-2040 – Increase of $7.8B in GDP 2015-2040 – Almost 100,000 more job-years for the

economy ‘15-’40 – Population increase of 16,000 by 2040

(LOSS across some other cohorts)

$40Billion More in Personal Income

$7.8Billion In Additional GDP

What if more retirees move to Metro Atlanta???


Source: REMI (ARC Analysis)

REMI Working Age Migration Scenario

• FOR THE 20-COUNTY AREA; ARC TRANSIGHT MODEL

• Assumptions – Annual increase of 1,000 migrants aged

18-64 per year to 20-county economy from 2015-2040

– Distribution weighted on population aged 18-64 in each county

– No explicit costs considered • Potential Impacts (DRAFT; not “net”

benefits) – Increase of $4B in Personal Income

2015-2040 – Increase of $2.6 in GDP 2015-2040 – Almost 29,400 more job-years for the

economy ‘15-’40 – Population increase of 8,000 by 2040

$4Billion More in Personal Income

$2.6Billion In Additional GDP

What if more working age(18-64) people move to Metro Atlanta?

Fiscal Effects of an Aging Population What You Need to know! • The New Economy is increasingly dependent on the

work of our 65+ population • These workers are already earning close to a BILLION

dollars a year in wages • In the future, these workers will add billions to our

regional economy in the future. • Attracting additional retirees to Metro Atlanta would

have strong positive impact to our Economy

• Seniors are a critical part of our economic competitiveness

Source: REMI (ARC Analysis)

Making the Case: THE NEW ECONOMY

of an Aging Population

Mike Alexander, AICP Research and Analytics Division Manager Atlanta Regional Commission [email protected]

(1)National Demographic Trends


2014

2030

Fiscal Effects of an Aging Population (2)National Demographic Trends

2014-2030


Regional Attractiveness

-0.08

-0.06

-0.04

-0.02

0

0.02

0.04

0.06

0.08

0.1

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039

Thou

sand

s

Net Ret Migrants Net Domestic Migrants Net Int. Migrant

Source: Plan 2040 Transportation Update, 2014

National Labor Force Participation Rates by Race/ Ethnicity Estimated 1992-Projected 2022

58

60

62

64

66

68

70

1992 2002 2012 2022

Hispanic Asian White NH Black

Source: Bureau of Labor Statistics

Region’s Labor Force

57%

58%

59%

60%

61%

62%

63%

64%

65%

66%

67%

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

2010 2015 2020 2025 2030 2035 2040

Rate in

Tho

usan

ds

Regional Labor Market

Labor Force Participation rates


Making the Case:�THE NEW ECONOMY �of an Aging Population in Metropolitan Atlanta�For the First Time in Forever……Fertility Population Growth ComparisonLongevityAge and Sex in USA: 1945-2060Who is Working is ChangingNEW ECONOMIC STRENGTHGrowth in the 65+ WorkforceRehearsing the Future using Economic Forecasting WHAT DOES REMI SAY?�REMI Econometric Model FeaturesAge Population GrowthAge Composition ChangeExtreme AgingRegional Age By Race/Ethnicity 1990 to 2040Population DeterminantsRegion’s Employment Opportunity1990 Labor ForceLabor Force 2013Labor Force 2040Dimensions of Regional Growth �and ChangeSlide Number 22Economic Benefits of “Retirees”Retirement Migration and the EconomyREMI Retirement Migration ScenarioREMI Working Age Migration ScenarioWhat You Need to know!Making the Case:�THE NEW ECONOMY �of an Aging Population�Slide Number 29Slide Number 30(1)National Demographic Trends(2)National Demographic Trends �2014-2030Regional AttractivenessNational Labor Force Participation Rates by Race/ Ethnicity �Estimated 1992-Projected 2022Region’s Labor ForceSlide Number 36

Making the Case: THE NEW ECONOMY of an Aging Population in ...€¦ · – Increase of $2.6 in GDP...

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