The United States is rapidly approaching a demographic “tipping point” in 2030 with never before seen implications—baby boomers will be 65 years or older, with one in every five Americans having reached retirement age (Vespa, Armstrong, & Medina, 2018). By mid-decade, the 2030s will also bear witness to another historic first—older adults will outnumber children (Vespa et al., 2018). Moreover, international immigration of 1.1 million will outpace the natural increase in the population (births in excess of deaths) of 1 million (Vespa et al., 2018). Our population will be more diverse, older, and have fewer workers participating in the labor market (Toosi, 2016; Vespa et al., 2018). This will have different impacts on regions across the country.
Gains in the South and West are already coming at the expense of the Northeast and Midwest. States like Arizona, Florida, and Texas will continue to be the beneficiaries of high job growth and increased political influence due to the reapportionment of Congressional seats, with the next round taking effect in 2022. Texas is currently projected to gain 3 congressional seats; Florida will likely gain 2 seats (Election Data Services, 2018). Arizona, Colorado, Montana, North Carolina, and Oregon are on track to gain at least one seat (Election Data Services, 2018). In comparison, Alabama, Illinois, Michigan, Minnesota, New York, Ohio, Pennsylvania, Rhode Island, and West Virginia are expected to lose one congressional seat, with New York potentially losing a second seat (Election Data Services, 2018). This trend is likely to continue with another reapportionment in 2032.
Cutting across these demographic trends is the concentration of wealth in a dozen or so metropolitan areas. This was made evident by last year’s announcement by Amazon to expand into Northern Virginia (and to a lesser extent Nashville), in comparison to General Motors latest round of job cuts and plant closures in Michigan, Ohio, and Maryland. The decades-old shift in population to the Sunbelt is now being catalyzed by Millennials and Generation X. These ascending, tech-savvy workers are no longer solely concentrated in Silicon Valley, Boston, and Seattle. Rather, they are now moving to smaller, second-tier tech hubs that offer more affordable housing, fewer regulations, and lower taxes—places like Atlanta, Austin, Dallas, Denver, Houston, Miami, Orlando, Phoenix, and San Diego (Kolko, 2019; Kotkin, 2018).
Understanding U.S. demographics and their impact on the labor market is an important part of the economic development strategic planning process. AngelouEconomics conducts extensive quantitative and qualitative research to provide our clients with a thorough market assessment of community strengths and weaknesses, as well as current and future economic trends. This is foundational to creating an ambitious, yet achievable, set of strategies and actions that guide clients to a more prosperous and vibrant future.
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Election Data Services. (2018). Reapportionment studies. Retrieved from https://www.electiondataservices.com/reapportionment-studies/
Kolko, J. (2018, April 18). Tech hubs 2019: Tech still clustered in top hubs, but smaller centers have advantages. Indeed.com. Retrieved from https://www.hiringlab.org/2019/04/18/tech-hubs-2019/
Kotkin, J. (2018, January 11). Tech’s new hotbeds: Cities with the fastest growth in STEM jobs are far from Silicon Valley. Forbes. Retrieved from https://www.forbes.com/sites/joelkotkin/2018/01/11/techs-new-hotbeds-cities-with-fastest-growth-in-stem-jobs-are-far-from-silicon-valley/#685296b3bed1
Toosi, M. (2016). A look at the future labor force to 2060. U.S. Bureau of Labor Statistics. Retrieved from https://www.bls.gov/spotlight/2016/a-look-at-the-future-of-the-us-labor-force-to-2060/home.htm
Vespa, J., Armstrong, D. M., Medina, L. (2018). Demographic turning points for the United States: Population projections for 2020 to 2060. Current Population Reports, P25-1144, U.S. Census Bureau, Washington, D.C.
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For more information, contact Richard Mulligan, Senior Project Manager, at (480) 244-4560, or rmulligan@angeloueconomics.com.
