By VINCE DEVLIN Missoulian | Posted: Sunday, July 24, 2011 11:03 pm
MISSOULA -- There, among all the census data coming out earlier this month -- like the projection that Montana would hit 1 million residents for the first time ever sometime this year -- was the information that the state's population is also aging.
Which may not be news to many people.
But that doesn't make it any less important.
"People don't understand how big it is," said Larry Swanson, director of the O'Connor Center for the Rocky Mountain West in Missoula. "So much of it is not understood, even by people in economic development.
"It's actually monumental," Swanson said. "It will change the engine that drives economic activity."
It's a numbers game, he said, that translates across just about every category you can think of, from school enrollments and transportation, to real estate and construction.
"But it happens so slowly and gradually," Swanson said, "that people don't understand the significance. They don't plan for it."
Montana's unemployment rate may be higher than anyone wants now, but Swanson said the aging trend means the state will be facing a shortage of workers in 10 years.
Today, he said, 75 percent of personal income comes in the form of people who work.
Ten years down the road, that will be closer to 50 percent.
That means more and more people will be living off Social Security, Medicare, retirement programs and investments.
"We're hitting ages where more and more people will no longer be depositing money into these things, but pulling it out," Swanson said. "More and more personal income will come from someplace other than work. That's such a big factor in the economic change that's coming. If you can translate that to your business, you'll get a long ways."
***
Some things are obvious: As more people get older, more money will be spent on health care.
Some are less so. Consider real estate and construction, Swanson said, where he predicts the demand for single-family homes will decline as larger and larger swaths of the population reach retirement age.
"They start to think about downsizing," Swanson said. Housing appropriate for an aging population becomes smaller -- townhouses, condominiums, apartments -- or comes in new forms, such as assisted-living centers.
"As people move out, who's going to buy the single-family homes they're leaving?" Swanson said.
Although Montana's median age jumped from 37.5 years in the 2000 census to almost 40 in 2010, we're just getting started down the road of an aging population, Swanson said.
"The start of births for baby boomers came about 1947 or '48," he said, "and hit the backside about 1962-63. That's 15 years across, and we're just on the front edge of those first babies turning 64 years old."
The leap in births during the baby boomer era looks like a bell curve, Swanson said, and over the next seven to eight years we'll see ever-increasing numbers of people retiring on a yearly basis.
"We're just sniffing at it now," he said. "It will come on strong as we go forward."
***
That's good news for young people entering a difficult job market.
"We can get focused on an aging population," Swanson said, "and forget about the people in other age profiles."
Swanson said from time to time he'll go out on the University of Montana campus, find a random group of students and ask how many are graduating, or near graduation.
"About half usually raise their hands," he said. "I ask those students how many have jobs, or jobs lined up, and only about a third of them raise their hands. I look at the other two-thirds and tell them to stay relaxed. We're working through a recession right now, but we will reach the point where we do not have enough workers. The opportunities are in front of them. They just have to be patient."
He knows that's easier said than done, and knows it will be several years before the economy recovers.
"Remember, before the recession, unemployment in western Montana was at about 2 percent," he said. "Full employment is considered to be at 4 percent, because there are always a certain number of people in between jobs. But we had moved to just 2 to 3 percent. We'll be back in that world as people leave the work force in increasing numbers. Once the economy is back on its feet and growing, we'll move into a labor shortage."
***
None of this became suddenly apparent with the 2010 census.
"The projections have been available for quite a while," Swanson said. "The 2010 numbers just confirmed what we already knew -- how rapid the aging process is happening."
By 2030, one in every four Montanans is expected to be 65 or older.
Missoula is one of only a handful of Montana's 56 counties that isn't aging as fast as the rest of the state.
"In Montana, there were only six or seven counties that saw any increase in the population of the 25-to-39 age group," Swanson said. "Missoula is one, because it's able to hang on to more of its young adult population."
Places that can't keep young people around, meantime, will face troubled economies.
"It means you don't have enough young adults to replace the retiring work force," Swanson said, "and if you don't have young adults, you don't have families."
The changes are coming, and smart people and businesses will be on top of it.
"We literally have not seen anything yet," Swanson said.
But he tempers that, noting that all this started after World War II.
"It's our first experience with it as a modern nation," Swanson said. "Other places that have been around for a thousand years, as opposed to a couple hundred, have been through this many times."
For Montana and America, it's just beginning.
