Disruptive Demographics: Implications for Business, Workforce Development, and Consumer Markets October 2013 James H. Johnson, Jr. Frank Hawkins Kenan Institute of Private Enterprise Kenan-Flagler Business School University of North Carolina at Chapel Hill

OVERVIEW Demographic Trends Challenges & Opportunities Discussion

what October 2013 CENSUS 2010 will REVEAL

6 DISRUPTIVE TRENDS The South Rises – Again The Browning of America Marrying Out is “In” The Silver Tsunami is About to Hit The End of Men? Cooling Water from Grandma’s Well… and Grandpa’s Too!

The South Continues To Rise The South Continues To Rise...Again!

SOUTH’S SHARE OF U.S. NET POPULATION GROWTH, SELECTED YEARS, Years U.S. Absolute Population Change South’s Absolute Population Change South’s Share of Change ,974,129 8,468,30327% ,123,138 9,339,45533% ,886,12815,598,27930% ,497,94722,650,56350% ,035,66529,104,81449%

U.S. POPULATION CHANGE BY REGION, Region 2010 Population Absolute Population Change, Percent Population Change, U.S.309,050,81626,884,9729.5% Northeast55,417,3111,753,9783.3% Midwest66,972,8872,480,9983.0% South114,555,74414,318, % West72,256,1838,774, %

SHARES OF NET POPULATION GROWTH BY REGION, Region Absolute Population ChangePercent of Total UNITED STATES26,884, NORTHEAST1,753, MIDWEST2,480, SOUTH14,318, WEST8,774,

NET MIGRATION TRENDS, NortheastMidwestSouthWest Total-1,032-2,008+2, Black Hispanic Elderly Foreign born = Net Import= Net Export

STATE SHARE OF SOUTH’S NET GROWTH, Region/StateAbsolute ChangeState’s Share The South14,318, % Texas 4,293, % Florida 2,818, % Georgia 1,501, % North Carolina 1,486, % Other Southern States 4,218, %

Population Change in Florida and Northwest Florida, Area2010 Population Absolute Population Change Percent Population Change Florida 18,801,3102,818, % Gulf Power Service Area 978,765 94, % Florida Great Northwest Region 1,366, , %

GROSS AND NET MIGRATION FOR THE SOUTH, The Region DomesticForeign YearsInOutNetInOutNet ,125,0963,470,431654,665268,619132,382136, ,874,4143,477,899396,525232,501132,201100,300 Florida DomesticForeign YearsInOutNetInOutNet ,053630,051182,00241,74524,10817, ,931668,087-13,15633,09532,0941,001

Balance of Population Change Equation Population Change = In-Flows – Out- Flows where In-flows = [Births + In-Migrants] & Out-Flows =[Deaths + Out-Migrants]

Typology of Communities Demographic ExperienceDrivers Balanced GrowthBirths exceed deaths and in-migration exceeds out- migration. Natural GrowthOut-migration exceeds in-migration but this population loss is offset by an excess of births over deaths. Migration MagnetsDeaths exceed births but population loss is averted because in-migration exceeds out-migration. DyingDeaths exceed births and out-migration exceeds in- migration, resulting in population loss. Biologically DecliningIn-migration exceeds out-migration but his net migration is not substantial enough to offset an excess of deaths over births Emptying OutBirths exceed deaths but out-migration exceeds in- migration, resulting in net population loss

Types of Communities in Florida Great Northwest Region Type of CommunityNumber Balanced Growth 7 Natural Growth 1 Migration Magnet 1 Emptying Out 2 Dying 4 Biologically Declining 1

Balanced Growth Counties, CountyTotal Population Change Natural Change Net Migration Bay3,0511,2291,824 Calhoun Escambia5,0961,9133,288 Okaloosa9,2612,3926,820 Santa Rosa7,1401,3825,688 Walton2, ,224 Leon8,2823,0885,196

Natural Growth Communities, CountyTotal Population Change Natural Change Net Migration Wakulla

Migration Magnet, CountyTotal Population Change Natural Change Net Migration Franklin137139

Emptying Out Communities, CountyTotal Population Change Natural Change Net Migration Gadsden-1, ,602 Liberty

Biologically Declining, CountyTotal Population Change Natural Change Net Migration Washington

Dying Communities, CountyTotal Population Change Natural Change Net Migration Gulf Holmes Jackson Jefferson

THE “BROWNING” OF AMERICA

The Numbers YearAnnual Flow , , , , ,137, ,067,000 Refugees, Parolees, Asylees YearAnnual Flow , , , , ,500 Legal Immigrants

The Numbers Cont’d Illegal Immigrants 300,000 to 400,000 annually over the past two decades Three million granted amnesty in million illegal immigrants remained after 1986 reforms October 1996: INS estimated there were 5 million illegal immigrants in U.S. Since August 2005: Estimates of illegal population have ranged between 7 million and 15 million Today: An estimated 11.5 million unauthorized immigrants reside in U.S.

NON-IMMIGRANTS ADMITTED TO UNITED STATES, SELECTED YEARS, YearAll ClassesExchange VisitorsAcademic & Vocational Students ,756,903108,023 (1%) 271,861 (2%) ,539,880141,213 (1%) 285,496 (3%) ,574,055214,644 (1%) 355,207 (2%) ,640,540241,364 (1%) 395,480 (2%) ,690,082351,743 (1%) 699,953 (2%) ,824,088389,435 (1%) 741,921 (2%) ,907,139370,176 (1%) 687,506 (2%) ,381,928506,138 (1%) 917,373 (2%) ,082,286526, 931 (1%)1,702,730 (3%)

U.S. Immigrant Population,

U.S. Foreign Born Population by Race/Ethnicity, 2011 Race/EthnicityForeign PopulationShare of Total (%) Total40,381, Hispanic18,788, White Alone, not Hispanic 7,608, Black Alone, not Hispanic 3,130, Asian Alone, not Hispanic 9,988, Other Alone, not Hispanic 866,

U.S. POPULATION CHANGE BY RACE & ETHNICITY, Race2010 Population Absolute Change 2000 – 2010 Percentage Change Total 308,745,53827,323,6329.7% Non-Hispanic 258,267,94412,151,8564.9% White 196,817,5522,264,7781.2% Black 37,685,8483,738, % AI/AN 2,247,098178,2158.6% Asian Asian 14,465,1244,341, % NH/PI NH/PI 481,576128, % 2 or More Races 2 or More Races 5,966,4811,364, % Hispanic 50,477,59415,171, %

NON-WHITE AND HISPANIC SHARES OF POPULATION GROWTH, Area Absolute Population Change Non-White Share Hispanic Share US27,323, South14,318, Texas4,293, Florida2,818, Georgia1,501, NC1,486,

MEDIAN AGE OF U.S. POPULATION BY RACE, HISPANIC ORIGIN & GENDER, 2009 RaceTotalMaleFemale United States White Alone White, Non-Hispanic Black Alone AI/AN Alone Asian Alone NH/PI Alone Two or More Races Hispanic October

TOTAL FERTILITY RATES OF U.S. WOMEN BY RACE/ETHNICITY, 2007 Race/EthnicityTotal Fertility Rate Hispanic2.99 Non-Hispanic White1.87 Blacks2.13 Asian2.04 Native American1.86 October Source: Johnson and Lichter (2010)

RELATIVE DISTRIBUTION OF U.S. BIRTHS BY RACE / ETHNICITY Race/Ethnicity White66%50%49.6% Blacks17%16%15.0% Hispanics15%26%26.0% Other2%8%9.4% Source: Johnson and Lichter (2010); Tavernise (2011).

RELATIVE DISTRIBUTION OF U.S. POPULATION BY RACE / ETHNICITY Race/Ethnicity White67%47% Blacks12.8%13% Hispanics14%29% Asian5%9% October Source: Pew Research Center, 2008 *projected.

GULF POWER SERVICE AREA POPULATION CHANGE BY RACE & ETHNICITY, Race 2010 Population Absolute Change 2000 – 2010 Percentage Change Total 978,76594, % Non-Hispanic 930,12071,6508.3% White 739,39643,5476.3% Black 135,57914, % AI/AN 6, % Asian Asian 20,236 5, % NH/PI NH/PI 1, % Some other race Some other race 1, % 2 or More Races 2 or More Races 25,352 8, % Hispanic 48,64523, %

FLORIDA GREAT NORTHWEST REGION POPULATION CHANGE BY RACE & ETHNICITY, Race 2010 Population Absolute Change 2000 – 2010 Percentage Change Total 1,366,092143, % Non-Hispanic 1,295,058110,7129.3% White 966,701 60,2346.6% Black 256,591 29, % AI/AN 8, % Asian Asian 28,664 8, % NH/PI NH/PI 1, % Some other race Some other race 2, % 2 or More Races 2 or More Races 31,685 11, % Hispanic 71,034 32, %

Nonwhite and Hispanic Shares of Population in Florida and the Florida Northwest Region AreaAbsolute Population Change Non-White Share Hispanic Share Florida2,818, Gulf Power Service Area 94, Florida Great Northwest Region 143,

Median Age and Fertility Rates for Females in Florida, Demographic Group All Females White, Not Hispanic Black American Indian & Alaskan Native Asian Native Hawaiian & Pacific Islander Some other race Two or more races Hispanic Native Born Foreign Born Source: *Women 15 to 50 with births in past 12 months. Median Age Fertility/1000 women*

is “In” Marrying Out October

INTERMARRIAGE TREND, % Married Someone of a Different Race/Ethnicity October

INTERMARRIAGE TYPES Newly Married Couples in 2008 October

THE SILVER TSUNAMI

Key Drivers Changes in Longevity Declining Fertility Aging of Boomer Cohort

LIFE EXPECTANCY AT BIRTH YEARAGE

Centenarians in the U.S. YearNumber , , ,000

COMPLETED FERTILITY FOR WOMEN YEARS OLD Year Percent Childless Avg. Number of Children Percent Higher Order Births* *Three or more Children

TOTAL FERTILITY RATES OF U.S. WOMEN BY RACE/ETHNICITY, 2007 Race/EthnicityTotal Fertility Rate Hispanic3.0 Non-Hispanic White1.9 Blacks2.1 Asian2.0 Native American1.9

THE “GREYING” OF AMERICA

U.S. POPULATION CHANGE BY AGE, Age2009 Absolute Change Percentage Change <25104,960,2505,258, ,096,278-1,898, ,379,43916,977, ,570,5904,496, TOTAL307,006,55024,834, October

U.S. POPULATION TURNING 50, 55, 62, AND 65 YEARS OF AGE, ( ) Age 50 Age 55 Age 62 Age 65 Average Number/Day12,34411,5419,2218,032 Average Number/Minute October

Absolute and Percent Population Change, Florida and Great Northwest Region, AgeFloridaGreat Northwest Region Gulf Power Service Area All Ages2,818,932 (17.6%) 143,600 (11.7%) 94,655 (10.7%) <25764,806 (15.4%) 57,592 (14.1%) 43,062 (15.8%) ,452 (3.3%) -13,294 (-3.7%) -14,632 (-5.5%) ,450,669 (40.0%) 92,023 (33.3%) 67,837 (33.1%) ,005 (16.1%) 34,069 (23.0%) 25,142 (21.7%)

The Multigenerational Workforce

Multi-Generational Diversity January GenerationBirth YearsCurrent AgesEst. Workforce Participation in 2013* Veterans Traditionalists WWII Generation Silent Generation % (7M) Baby Boomers “Boomers” % (60M) Generation X Baby Busters % (51M) Generation Y Millennials % (40M) *Source: AARP – Leading a Multi-Generational Workforce, 2007

The End of Men?

FEMALE WORKFORCE REPRESENTATION

JOBS LOST/GAINED BY GENDER DURING 2007 (Q4) – 2009 (Q3) RECESSION Industry WomenMen Construction -106,000-1,300,000 Manufacturing -106,000-1,900,000 Healthcare +451, ,100 Government +176, ,000 Total -1,700,000-4,700,000

THE PLIGHT OF MEN Today, three times as many men of working age do not work at all compared to Selective male withdrawal from labor market—rising non-employment due largely to skills mismatches, disabilities & incarceration. The percentage of prime-aged men receiving disability insurance doubled between 1970 (2.4%) and 2009 (4.8%). Since 1969 median wage of the American male has declined by almost $13,000 after accounting for inflation. After peaking in 1977, male college completion rates have barely changed over the past 35 years.

JOBS LOST/GAINED BY GENDER DURING 2007 (Q4) – 2009 (Q3) RECESSION Industry WomenMen Construction -106,000-1,300,000 Manufacturing -106,000-1,900,000 Healthcare +451, ,100 Government +176, ,000 Total -1,700,000-4,700,000

Snapshot of U.S. & NC Disabled Male Populations, 2011 IndicatorUnited StatesNorth Carolina Absolute Number8,622,600334,200 Prevalence12.1%13.3% Veteran Service Connected Disability 19.1%18.8% Employment Rate33.4%30.7% Employed Full-time20.7%19.5% Not working but looking11.7%12.2% Annual Earnings$36,700$32,600 SSI19.6%15.7% Less than High School22.4%24.5% Uninsured17.5%18.8% Below Poverty Level27.8%28.4%

COLLEGE CLASS OF 2010 DEGREEMALEFEMALEDIFFERENCE Associate’s293,000486,000193,000 Bachelor’s702,000946,000244,000 Master’s257,000391,000134,000 Professional46,80046, Doctor’s31,50032,9001,400 TOTAL1,330,3001,902,300572,000

ENROLLMENT IN 2 YEAR COLLEGES, 2009 Area Total Enrollment Full Time Enrollment (%) Male Enrollment (%) Black Enrollment (%) U.S.20,966, Southeast Region 4,731, North Carolina 574, NC- 2 Yr Colleges 253,

UNC SYSTEM STUDENT ENROLLMENT BY GENDER AND TYPE OF INSTITUTION, 2010 Type of Institution Total Enrollment Male Enrollment Percent Male UNC System 175,28176,95344 Majority Serving 139,25063,40346 Minority Serving 36,03113,55038 HBUs 29,86511,19137

Average EOG Scores Gender scores are averages of 6 LEAs (Bertie, Bladen, Halifax, Duplin, Northampton and Pamlico)

Average EOG Scores Gender scores are averages of 6 LEAs (Bertie, Bladen, Halifax, Duplin, Northampton and Pamlico)

Average EOC Scores Gender scores are averages of 6 LEAs (Bertie, Bladen, Halifax, Duplin, Northampton and Pamlico)

EOC Composite Scores Gender scores are averages of 6 LEAs (Bertie, Bladen, Halifax, Duplin, Northampton and Pamlico)

Male-Female Presence Disparity Graph shows total number of male and female students tested of 6 LEAs (Bertie, Bladen, Duplin, Halifax, Northampton, and Pamlico)

High School Graduation Rates Avg. graduation rates of 6 LEAs (Bertie, Bladen, Halifax, Duplin, Northampton and Pamlico)

The Minority Male Challenge

Third Grade EOG Reading Test Pass Rates For Males by Race/Ethnicity

Third Grade EOG Math Test Pass Rates for Males by Race/Ethnicity

Eighth Grade EOG Reading Test Pass Rates for Males by Race/Ethnicity

Eighth Grade EOG Math Test Pass Rates for Males by Race/Ethnicity

COOLING WATERS FROM GRANDMA’S WELL And Grandpa’s Too!

Children Living in Non-Grandparent and Grandparent Households, Household TypeAbsolute Number 2010 Absolute Change Percent Change All74,7182, No Grandparents67, Both Grandparents 2, Grandmother Only 1, Grandfather Only October

Children Living in Non-Grandparent and Grandparent-Headed Households by Presence of Parents, 2010 Household Type All Children (in thousands) Living with Both Parents Living with Mother Only Living with Father Only Living with Neither parent All74, %23.1%3.4%4.0% No Grandparents 67, %21.2%3.3%2.1% Both Grandparents 2, %40.6%5.2%36.1% Grandmother Only 1, %48.4%4.5%33.2% Grandfather Only %45.9%4.4%23.6% October

...but Challenges Abound DIVERSITY RULES September

Barriers to Future Economic Prosperity

The Dependency Problem A Train Wreck in the Making

POPULATION CHANGE BY AGE IN THE SOUTH, Age 2010 Population Absolute Change Percent Change Total114,555,74414,318, <10 (Gen Z)15,346,3001,284, (Gen Y)31,624,7883,247, (Gen X)22,820, , (Boomers) 29,870,4237,731, (Pre- Boomers) 14,893,9852,455,

DEPENDENCY RATIOS IN THE AMERICAN SOUTH Source: Census 2010

The Human Capital Challenge

September

Percent of High School Graduates Requiring Remedial Course Work

Opportunities for Economic Renewal

Tap the Spending Power of Immigrants and Ethnic Minorities

Conceptual Framework for Assessing the Economic Impact of Immigrants

SUMMARY RESULTS OF THREE ECONOMIC IMPACT STUDIES IndicatorNorth Carolina Hispanics 2006 Arkansas Immigrants 2007 Arkansas Immigrants 2013 Consumer Expenditures & Tax Contributions $9.2b ($15,130) $2.9b ($23,577) $3.9b ($16,300) Cost of Essential Services $817m ($1,360) $237m ($1,927) $555m ($2,300) Net Benefit$8.3b ($13,770) $2.67b ($21,951) $3.4b ($13,900) Benefit-Cost Ratio$10.00-$1.00$11.00-$1.00$6.00-$1.00

Projected Changes in U.S. Buying Power by Race/Ethnicity, Race/Ethnic Group Projected Change All Groups$11.1 trillion$14.1 trillion27% Hispanics$ 1.0 trillion$ 1.5 trillion50% Asians$ billion$775.0 billion42% African Americans $ billion$ 1.2 trillion25% Native Americans$ 67.7 billion$ 90.4 billion34%

Shares of U.S. Buying Power by Race/Ethnicity, Group Non- Hispanic White Black Asian American Indian Multi- racial N/A Hispanic

The Elder Care Economy

Total and Elderly Population Change, Total Population Percent Change Absolute Change U.S.9.526, South14.314,318,924 The Carolinas ,099,702 North Carolina ,486,170 South Carolina ,532 Elderly Population Percent Change Absolute Change U.S.10.73,787,660 South19.72,455,718 The Carolinas ,572 North Carolina ,031 South Carolina ,541

Elderly Share of Net Population Change, AreaTotal Population Change Elderly Population Change Elderly Share of Net Change United States26,884,9723,737, % South Region14,318,9242,455, % The Carolinas 2,099, , % North Carolina 1,486, , % South Carolina 613, , %

Age-Related Challenges Mobility Limitations Hearing Loss Vision Impairments Mental Disorders Substance Abuse Issues Chronic Disabilities Economic Constraints

The Triple Whammy Aging Boomers Face Mortality Elder Care Responsibilities Raising Grandchildren

Target Markets

Gender Composition of Elderly Population by Age, 2010 AgeThe CarolinasNorth CarolinaSouth Carolina All Elderly (65+)1,865,9531,234,079631,874 % Female Young Old (65-74)1,066, ,567369,043 % Female Middle Old (75-84) 581, ,051192,114 % Female Oldest Old (85+) 218, ,46170,717 % Female

Distribution of Widowed Elderly Women by County, The Carolinas, 2010

North Carolina Elderly Population Living Alone, 2010 GenderTotal Population Number Living Alone Percent Living Alone Both Sexes1,234,079326, Male 523,956 83, Female 710,123242,

Distribution of Elderly Female Householders, No Husband Present, The Carolinas, 2010

AGING IN PLACE RESEARCH FRAMEWORK Senior Population Senior Population Person- Centered Activities Person- Centered Activities Seniors Caregivers Service Providers Seniors Caregivers Service Providers Assistive Technologies Assistive Technologies Digital Literacy Digital Literacy Remote Care Systems Online Health Promotion Sympathic Devices ICT AAL Remote Care Systems Online Health Promotion Sympathic Devices ICT AAL Successful Aging in Place Successful Aging in Place Built Environment Centered Activities Built Environment Centered Activities Dwellings Neighborhoods Communities Cities/Regions Nationstates Dwellings Neighborhoods Communities Cities/Regions Nationstates

SMART SLIPPERS

GLOWCAPS

SENIOR PLAYGROUNDS

The Freelance Economy

DRIVERS Broadband Technology Cloud Computing Other Technological Innovations Disruptive Demographics Global Economic Recession

The Online Market Place Guru.com Elance.com Odesk.com Freelancer.com October

Top Freelancer Locations CountryCountry Cont’d United States (200,619)Australia (3,307) India (60,212)Bangladesh (2,694) United Kingdom (10,387)Romania (2,494) Canada (9,133)Indonesia (2,332) Pakistan (7,731)Russian Federation (2,223) Philippines (5,221)Uruguay (1,847) October

The Freelancer Economy— Technology Websites & Ecommerce (42,084) Programming and Databases (47,749) Engineering & CAD (10,463) Networking & Telephone Systems (10, 154) ERP & CRM (2,288) October

The Freelancer Economy— Creative Arts Graphic Design & Multimedia (32,289) Writing, Editing, & Translation (45,510) Illustration & Art (11,451) Photography & Videography (7,399) Fashion & Interior Designs (2,746) Broadcasting (4,806) October

The Freelancers Economy— Business Administrative Support (36,504) Marketing & Communications (8,187) Sales & Telemarketing (4,167) Business Consulting (11,887) Legal (2,567) Finance & Accounting (4,657) October

Freelancers within 30 mile radius of Zip: (N= 1,578) Programming & Databases (287)Illustration & Art (50) Writing, Editing & Translation (281)Photography & Videography (41) Administrative Support (217)Sales & Marketing (26) Website & Ecommerce (153)Broadcasting (25) Graphic Design & Multimedia (148)Finance & Accounting (22) Business Consulting (101)Legal (18) Networking & Telephone Systems (76) ERP & CRM (14) Engineering & CAD (57)Fashion & Interior Design (8) Marketing & Communications (54) October

MOVING FORWARD Managing transition from the “graying” to the “browning” of America. Embrace immigrants Recognize the economic value of multi-ethnic and multi-generational markets. Freelancers Rule Address the “wayward sons” problem in U.S. education and labor markets Become more actively involved in K-12 education as a form of enlightened self-interest.