Minnesota Demographic And Economic Trends Tom Gillaspy, State Demographer Mn Dept of Administration March 2010

Census Milestones Questionnaires mailed in mid-March 2010 Questionnaires due April 1, 2010 Non-response follow-up will begin in May 2010

Why do we take the Census? Distribute Federal and State Government funding including Local Government Aide (LGA) $400 Billion in federal funding plus undetermined state dollars every year $1,300 per year lost for each person we fail to count OR $1,300,000 over the decade if we miss 100 people Census data is widely used for planning Government, Businesses, Schools, Service Providers Constitutionally Mandated: Congressional Reapportionment Minnesota could lose a seat! Let’s keep our 8 Congressional Districts

The Economic/Demographic Environment Has Changed for as Far as We Can Forecast Short run economic cycle has merged with long run demographic cycle We have entered the Age of Entitlement—economic growth in the next 25 years will be about half what it was in the past 25. State revenue growth will slow while spending pressures will accelerate This is a national/global issue

Additional labor market slack has produced much weaker than expected wage growth. Mn State Economist, Dec 2009

The Great Recession Has Raised the Level of Social Angst But Four Mega-Forces Will Shape Minnesota In The “New Economy” Globalization Technology Energy prices Demography

Minnesota Saw a 30 Percent Jump in Workers Turning Age 62 in 2008 The Entitlement Age has begun. The first wave of the boom generation turned 62 in 2008. The number turning age 62 will continue to grow, peaking in 2022 at a level more than 60 percent above the 2007 level. The aging of Minnesota will affect our labor markets and the demand for privately and publicly provided services 2005 ACS 7

College Age Population Will Decline Census Bureau US Proj, Mn State Demographer revised 2007

Labor Force Growth Is About To Slow Sharply

Minnesota Will Grow More Diverse; Remain Less Diverse Than The Nation State Demographer & Census Bureau projections

In 2008, Minnesota’s Foreign Born Workforce Was 254,000 or 8 In 2008, Minnesota’s Foreign Born Workforce Was 254,000 or 8.5% Of The Total Workforce 2008 ACS

One Response to Labor Demand Has Been Immigration Minnesota’s Foreign Born Labor Force Has Increased, Especially in Younger Ages 1990 Census, 2007 ACS, smoothed

The “New Normal” Probably Means Slower economic growth—about 85% as fast Slower growth of investments, incomes, profits, wages, etc. Less consumption; more saving Chronic government deficits & cuts in service Worries about how to pay for past promises More uncertainty in our personal & national futures A whole new way of looking for opportunities

The Key To Future Success? Future economic growth will depend increasingly on increasing productivity and less on labor force size Productivity is not just producing at a lower cost This plays to Minnesota’s historic strength

Grieving For The “Old Normal” Denial – “This is not happening.” “Just wait, things will return to normal.” Anger -- “Who is to blame?” Rage and gridlock rule and anyone who symbolizes life, energy, progress, success, happiness, etc. is treated with resentment and mistrust. Bargaining – “I’ll change if this just goes away.” Somehow, we can get back to the old normal if we just return to good, ole fashioned (conservative/liberal) values. Depression (emotional, not economic) – “What’s the point in trying?” “We are all doomed anyway.” The certainty/finality of events is finally recognized. Acceptance – “It’s going to be okay.” Looking for opportunities begins.