All fifty states will not carry the US economy to a recovery, if it can recover entirely at all. A careful look at the patterns of aging, births, and population movement shows that nearly 20 states are hampered financially by either old populations, which are getting older, or younger populations, which are poor and generally getting poorer.
The composition of the American population has changed radically over the last ten years. Most of the reasons have been well-articulated. Baby Boomers are reaching retirement age in greater numbers and will do so for another several years. Large numbers of immigrants, both illegal and legal, have entered the US and continue to do so. Many of these immigrants cannot find jobs at pay levels above the median income of the states where they live. And, unfortunately, it is minorities and the young who are especially vulnerable to unemployment. In some states, the increase of the population under 18 is especially rapid which means the jobless rate in these states is not likely to rebound quickly as the economy rebounds.
24/7 Wall St. analyzed the states with the highest portions of their residents over 65 and under 18. The federal government uses these age groups to differentiate among the young, the working-age population, which are between 19 and 64, and the old. Our goal was to determine how economic trends have affected population migration and how this has caused changes in the economies of many states. Some states have simply stagnated such as Rhode Island. The number of people in Rhode Island has remained steady over the last decade. But, the population has aged because of low birth rates and an increase in older adults. Other states such as Nevada have had a large influx of younger people. But, many people in Nevada have been hurt by the collapse of the housing market and high unemployment. The state may have gained population, but the population lacks money and jobs.
Most states with older populations are usually in the Northeast or in areas with warm climates such as Florida. For reasons which are not well-understood but might be guessed at, young people are have not moved in large numbers to sparsely populated states such as Montana, North Dakota, or Maine and older residents are not leaving in great numbers. Their residents tend to be white, middle-aged, and live in areas where there is not a great deal of competition for jobs. Also, there are not many jobs either.
Click Here To See Larger Chart of Population Growth 2000-2010
The irony of the employment success of many of the states with older residents is that their strength will eventually become their Achilles’ Heel. Once aging adults retire, they will not be easily replaced by younger workers. The burdens on pensions and other retirement programs will balloon. A stagnant employment base will undercut tax receipts. It is a situation that these states have no way to avoid, other than with the hope that those who are 65 and older will work until they are well over 70 to help maintain a tax base and defer some retirement costs.
The financial problems of younger states is worse still. A quarter of Arizona’s population is under 18. That population grew the second most rapidly among all states from 2000 to 2010. Arizona’s residents who are foreign-born citizens increased from 646,000 in 2000 to more than one million in 2008. There is no accurate count of illegal immigrants who live in the state, but they certainly number in the tens of thousands. The construction industry in the state is one of its largest, but home values have collapsed and with them so has the building industry. The construction sector tends to employ younger workers.
The situation in neighboring New Mexico is similar. It population grew by 25% during the last decade. The workforce has become more crowded with immigrants. That trend is expected to continue. There probably will not be enough job growth to accommodate the people who will need jobs just a few years from now. A state with a large and growing number of residents needs to add jobs at a faster rate than a state with an older population. Arizona and New Mexico will need to add employment opportunities at a blazing speed to keep up with job-seekers.
The overriding financial problem of most states is that their tax receipts have fallen because of a sharp drop in home prices, the growth in unemployment and an increase in money-losing businesses. Many of these states will not recover their financial equilibrium for some time. Short-term, nearly ten states face an aging population that probably will not be replaced by younger residents. Other states face increases the number of residents who are less affluent younger people who tend to have large numbers of children. Having large numbers of old and young residents creates financial burdens, and none are easily relieved by states which already have record deficits. This could stymie the recovery.
It is better to think of the US financially as a collection of regions or states than as one large nation. The problems of Montana do not resemble many of those in Mississippi. Rhode Island has a set of challenges that does not mirror those in Arizona. Experts believe that the US will need to add 500,000 or more jobs a month to offset the huge layoffs and small business failures of the recession which have left over 13 million Americans out of work. Even at a 500,000 rate of job growth a month, it will take over two years for unemployment to get back to a “normal” 5%. About 225,000 a month are being created now. States with large numbers of older people will not tend to add significantly to their employment rolls over time. Neither will those with young populations where joblessness is particularly high. America also faces the trouble that deficits are not the unique property of the federal government. State imbalances are in many cases even more pressing than the US’s is. At least the Treasury can “print money”. The states do not have that luxury and must exist financially through their borrowing power in the capital markets, and those markets are skeptical about their prospects. States which are strapped for cash have and will have trouble supporting large groups of young people who are out of work or large numbers of people who have retired. The austerity movement in Washington will likely cause less federal support for the old, the unemployed, and the young who need social service.
This is the 24/7 Wall St. “States With The Oldest And Youngest Residents”, and it is, among other things, a story about the long-term financial and demographics that America faces.
The States With The Youngest Residents
According to the 2010 Census, California’s population is more than 36 million, the most of any state. About 5.5% of its population is under the age of 18. However, the state has actually had a net loss of more than 200,000 children and teenagers since 2001. Brown University professor John Logan explained this is because young families are not moving to the state because of its worsening economy. In the past ten years, “The Golden State” went from having the fifth largest percentage of its population under 18 to the tenth. The state, which has the highest GDP in the country, $1.8 billion. That is more than that of the 24 smallest states combined. California’s population, has increased by about 10%, which is just above the national average. Growth has slowed significantly, however, as the ailing economy has curbed both immigration and employment. According to the San Francisco Chronicle, between 2009 and 2010, 72,000 more people left California than came to the state.
New Mexico had the 15th fastest-growing population over the last decade, adding 13% – nearly a quarter million people – between 2000 and 2010. The most significant source of this growth came from the population aged 18-29. Immigration has been a major reason for the state’s booming base of working-age young adults. According to the National Association of Latino Elected and Appointed Officials (NALEO), 78% of the state’s population growth in the last decade has been among Latinos, despite the fact that they still only make up 46% of New Mexico’s residents. Between 2001 and 2009, “The Land of Enchantment” dropped from having the 28th largest portion of young adults (aged 18-29) to 17th. The state’s median income increased more than 30% between 2000 and 2009, the 11th greatest increase in the country. The improvement only brought it to 40th best overall.
Click Here for Larger Chart of Percent Under 18
Tied for 7th. Mississippi
> Population Under 18: 25.9% (tied for 7th most)
> Population Over 65: 12.7% (17th fewest)
> Population Growth (‘00-‘10): 4.31% (13th slowest)
> State GDP: $95 billion (16th smallest)
Mississippi has a median income of $46,340, the lowest in the U.S. As is the case in many poor states, it had the fifth-highest birth rate in the country, based on statistics from the Center for Disease Control in 2010. According to a 2010 National Center for Health Statistics study, the state has the highest rate of birth among teenagers. Despite the high birth rate, Mississippi’s population has grown slower than most states in the past decade, especially compared to those with similarly large young populations. While it has the seventh-youngest population in the country, the number of children and young adults decreased by more than 10,000, or 1.42%, between 2001 and 2009. Nearly 26 percent of Mississippi’s population is under 18, but this number represents a decrease from 28.1% in 2001, as births have not made up for the numbers leaving the state.
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Tied For 7th. Nevada
> Population Under 18: 25.9% (tied for 7th most)
> Population Over 65: 11.6% (6th fewest)
> Population Growth (‘00-‘10): 35.15% (the fastest)
> State GDP: $125.1 billion (20th smallest)
Nevada’s economy has suffered on all fronts because of the recession. Despite this, the story for “The Silver State” and much of the southwest for the past decade has been one major migration there because of job creation. Between 2000 and 2008, state GDP nearly doubled. It was the fastest growing state in the country each year between 1986 to 2006, and the population increased more than 35% between 2000 and 2010 – the fastest rate. Much of the growth has occurred in the state’s young population. In 2001, the number of Nevada residents under 18 increased 22.8%, the highest increase in the country, as families who moved to the state in the 1990s and in early 2000 began to have children.
A state with similar profile to Nevada, Arizona is another southwestern state which had a major increase in its population of young families as a result of the booming economy. The population is up more than 24% since 2000, the second largest increase in the country, behind Nevada. As has been highlighted by recent legislation, Arizona is one of the states most seriously affected by immigration in the country. According to the Federation for American Immigration Reform, Arizona’s population of foreign-born citizens increased from 646,000 in 2000 to over one million in 2008. This does not include the hundreds of thousands of illegal immigrants that likely entered the state during that time. Like Nevada, the combination of births from young and middle-aged Americans relocating from other states and having children, as well as the high number of immigrants from Mexico, has caused the state to become increasingly young. 43.1% of the state’s population is under 30.
Tied For 4th. Alaska
> Population Under 18: 26.3% (tied for 4th most)
> Population Over 65: 7.4% (the fewest)
> Population Growth (‘00-‘10): 13.29% (14th fastest)
> State GDP: $46.7 billion (45th largest)
In 2001, Alaska had the second-highest percent of children and teenagers, at 31%. Between 2001 and 2009, Alaska actually lost 7,443, or 3.9% of its population under the age of 18. However, it remains one of the youngest states in the country, with 26.3% of its population under 18. The state has had major growth in its timber, oil and mineral harvesting industries, which has attracted thousands of young families over the past few decades. The “Land Of The Midnight Sun” had the greatest increase in the country of the portion of its population aged 18-29. In 2009, the state had the third largest percent of people aged 18-29. The state also had the largest increase in the percentage of its population aged 65 and older, but it still has the lowest percentage of elderly – only 7.5%.
Tied For 4th. Georgia
> Population Under 18: 26.3% (tied for 4th most)
> Population Over 65: 10.3% (4th fewest)
> Population Growth (‘00-‘10): 18.34% (7th fastest)
> State GDP: $393.4 billion (11th largest)
Georgia’s population has experienced the 7th greatest increase in population between 2000 and 2010, increasing more than 1.5 million, or 18.3%, to 9.6 million. Brookings Institute demographer William Frey says the reason for the growth has been a steady increase of new African-American residents, who have accounted for 580,000 of the 1.5 million new citizens. According to an article in The Augusta Chronicle, the state’s minority youth population increased by more than 14% between 2000 and 2010, citing a major increase in young Hispanics in the state as well.
Idaho has the third highest percentage of people under 18 in the country, with births accounting for more than 45,000 new Idaho residents. This birth rate has led to a 12.15% net increase in the number of children and teenagers between 2001 and 2009. Idaho was one of the fastest-growing states in the country. The recession dealt a severe blow to the sparsely populated state: the population growth rate dropped from the 3rd fastest in the country in 2005 to 12th between 2008 and 2009. This decrease in people moving to the state has resulted in the children of new residents accounting for a very substantial part of the population. Idaho also had the 4th greatest increase in children and teenagers as a portion of the population between 2001 and 2009.
According to recently released 2010 census data, more than 37% of Texas’ population is Latino, but this group accounts for 48.3% of Texas’ population under 18, compared to 40.5% at the beginning of the decade. The Lone Star state’s explosion of young Hispanic families and their children makes Texas the second youngest state in the country. According to former U.S. Census Director Steve Murdoch, Latinos will become the majority in the state by 2015.
While Utah has not been a leader in economic growth, like Arizona, it was nevertheless the third fastest growing state in the country during the last decade. It is also the youngest state in the union, with 31.2% of its population under the age of 18. Although the state was the youngest in 2001, it managed to have the second highest growth rate for children of that age, increasing 21.44%. There appears to be two major reasons for this state’s perpetually young population. Both circumstances and culture appear to be the main cause: according to Utah State Demographer Julia Tennert “We have a large number of women who are in their child-bearing years. And they have more children than average. Those two things combined mean we have a young population.” According to Tennert, Utah women marry significantly younger, and average 2.5 children each, compared to the national average of 2.1. In 2008, the most recent year of data available from the Center for Disease Control, Utah had the highest rate of births per 1000 in the country, roughly 30% higher than the national average.
The States With The Oldest Residents
Tied For 9th. South Dakota
> Population Under 18: 24.5% (tied for 17th most)
> Population Over 65: 14.4% (tied for 9th most)
> Population Growth (‘00-‘10): 7.86% (26th slowest)
> State GDP: $38.7 Billion (5th smallest)
In 2001, South Dakota had the eighth largest percentage of children and teenagers. By 2009, its rank dropped to 28th. The state also lost more than 20,000, or 9.4% of its population aged 30-49 during that time. The lack of births and the aging of the state’s baby boomers caused it to maintain a very high percentage of citizens over 65. This is despite significant increases in young adults during the past few years as a result of being one of the few economies that has done well throughout the recession.
Tied For 9th. Rhode Island
> Population Under 18: 21.5% (4th fewest)
> Population Over 65: 14.4% (tied for 9th most)
> Population Growth (‘00-‘10): 0.41% (2nd slowest)
> State GDP: $47.5 billion (6th smallest)
Rhode Island is a clear example of a state in which a failing economy and an aging population go hand in hand. In the past decade, the state had the slowest population growth rate in the country (Michigan was the only state to actually lose people). Between 2001 and 2009, Rhode Island had the 34th slowest increase in median wage, and the 30th smallest increase in GDP over the same period. Rhode Island lost more than 30,000 people, or 10% of its citizens aged 30-49, as many left the state due to a slow business economy. Because of this loss of working-age citizens Retired citizens remained a dominant portion of the population. However, the state’s elderly increased the smallest amount of any state.
Montana is the nation’s sixth least-populous state, and has the third-smallest economy in the country. Montana’s young population was one of the few that actually decreased over the last decade, dropping from the 29th largest in 2001 to the 39th largest in 2009. Meanwhile the state added 31,042 senior citizens, increasing the proportion of the elderly in the state from the 15th highest in the country to the eighth. A report on the state’s aging population published by the University of Montana shows that the number of residents under 18 is set to decline until at least 2030.
Click Here For Larger Chart of Residents Over 65
Hawaii relies on tourism, vacation, and retirement more than any other small state in the country. As a result of its warmth and abundant opportunities for recreation, the state has a large elderly population. That number has grown in the past ten years as the baby boom generation has begun to retire in serious numbers. The state increased from tenth in percentage of residents over 65 in 2001 to 7th in 2009, increasing its senior population by nearly 20%. This was the 17th highest increase in the country. According to Hawaii’s Department of Business, Economic Development, and Tourism, the state’s population over 65 is expected to continue to increase from 14.5% in 2009 to an incredible 24.3% in 2035.
North Dakota has a very similar demographic profile to its neighbor to the south. North Dakota has been has even more successful and has the lowest unemployment rate in the country, at just 3.6%. Over the past decade, median income has increased 45.6%, from $34,840 to $45,826. This was the second fastest rate of income growth in the country. GDP also increased 73.3%, the third highest rate in the U.S. Despite all of this, the state still has one of the highest percentages of elderly people in the U.S. Most of this is due to a major drop in the number of 30-49 year-olds. In the past decade, the state lost nearly 30,000, or 16%, of its middle-aged population. It now has the lowest portion of this group in the country.
In the past ten years, Iowa’s population grew only 4.1%, the tenth-slowest growth rate in the U.S.. According to one report by Iowa State University Department of Economics Professor Liesl Earthington, the state’s demographic trend has been like that of much of the Midwest – an increase in the urban population and a loss of rural residents. Whether or not the migration was a contributing factor, this has corresponded with a decrease in birth rates. The state had the 13th lowest rate of births per capita in 2008. The state lost nearly 2%, or 11,259, residents under 18 between 2001 and 2009. Furthermore, the state added more than 45,000 people 65 or older during that time. One AARP report estimates that the 65 and older population of the state will increase from 14.5% in 2009 to 22% by 2030.
While most of the states with very large elderly populations are small, Pennsylvania is one of the few exceptions to this rule. The state has the sixth-largest population and GDP in the country. Despite its large size, the state still managed to accumulate a net loss of people under the age of 18 between 2001 and 2010. The state was once one of the most productive states in the country, but in the post-industrial era has stagnated severely in both population and economic growth. Between 2000 and 2010, Pennsylvania added only 3.43% to its population, which is the ninth-slowest rate of growth in the country. Without new jobs to bring in young families, the “Quaker State’s” population has grown increasingly old. In reference to the stagnating population and lack of jobs, State Senator Dominic Pileggi stated “We must focus on attracting people to Pennsylvania and allowing the next generation of graduates to find family sustaining jobs here in the Commonwealth.”
While some states with large elderly populations have at least a moderate young population as well, Maine’s population skews overwhelmingly to people over the age of 50. The state has the second-smallest percentage of people under the age of 18 and the smallest percentage in the country between 18 and 29. As a popular destination for retirees, the state’s elderly population is, according to one report by Maine’s Department of Health and Human Services, “A distinguishing feature of Maine is that growth in the population 65 and older will substantially exceed growth in the total population…” According to the report, most of this growth will occur in the coastal counties, which are appealing retirement destinations.
At the turn of the century, West Virginia was, by many standards, the poorest state in the country. “The Mountaineer State” had a median income of $29,083, the lowest in the country. the state has begun to recover, gaining the third most in median income through 2009 to $40,490. This is, however, still the fifth-worst median income in the country, and the state is not attracting many new families. The state had the fifth slowest rate of population growth in the country. Like Maine, the state will need to have a major influx of young families to avoid further economic troubles. It has a very small percentage of residents aged 18-29, ranking third to last in each rank. Citing declining birth rates as the cause of the state’s population troubles, Dr. Christiadi, a West Virginia demographer stated, “Overall, these are challenging trends as the state tries to maintain its long-run economic growth,” she said. “As baby boomers retire in the next two decades, the whole workforce will start shrinking as well, which could pose as a drag in the economic growth.”
Florida stands out on this list of the oldest states for so many reasons. First, because of its unique nature as a large economy driven by tourism and elderly retirees, it does not stand to suffer the same way states like West Virginia and Pennsylvania do if their elderly population continues to grow at the rate it is expected. Second, every other state on our list ranks in the bottom 15 for population growth, and all but three rank in the bottom 35. “The Sunshine State” meanwhile, had the 8th fastest-growing population in the country between 2000 and 2010. The unusually fast growth that occurred in the state for the first two-thirds of the decade was largely the result of state businesses preparing for the retirement of the baby boomers took a serious hit during the collapse of the housing market. However, as the economy recovers, the state’s economic growth is expected to pick up again.
Michael B. Sauter, Douglas A. McIntyre