This pattern is surprisingly prevalent even in the urban cores that are at the heart of these regions. In New York County, better known as Manhattan, roughly 19% of the population is over 60, well above the national average. In San Francisco the percentage of elderly is a tad higher at 19.2%. These choice places are expensive to move into, so getting there some decades ago is a big plus. As the entrenched populations age, these places may become far more geriatric than commonly assumed.
But it’s not just the core cities that are getting older. In fact, in terms of rate of aging, some of the places going gray the fastest include suburbs of these cities that used to be the primary destinations of young families. Among the most rapidly aging places within the country’s largest metro areas are New York City’s bedroom communities of Nassau County, NY, and Bergen County, NJ; Middlesex outside of Boston; and suburban St. Louis County.
What does this mean to employers, investors, and, most importantly, residents of these regions? In some cases there are positives in the near-term economic picture. Some aging metro areas like Pittsburgh and Boston have done relatively well over the course of the recent long recession. This may be in part because older homeowners were less impacted by the housing bubble than younger ones, who tend to cluster in Sun Belt cities such as Atlanta.
In some cases, inertia from a large employed base of older skilled workers may have also insulated local economies. Older workers have tended to weather the recession better than younger ones and a surprising number have managed to stay in the workforce. Indeed, senior employment has jumped 27% in the last five years while that of younger and middle aged workers has fallen notably.
Seniors may also become something of an entrepreneurial engine for local economies, notes one recent Kauffman Foundation Study. In fact, the share of new entrepreneurs who are 55 to 64 year old has risen from 14.3% in 1996 to 20.9% in 2011.
Yet there are also long-term problems implicit in too rapid graying, chiefly in the prospect of a deficient future workforce. In Massachusetts, known among some demographers as “the granny state,” the population under 18 fell 5% over the past decade and there was a slightly larger drop in the 18 to 44 demographic. As the population of those 45 and older grows, there may not be sufficient new income to cover the rising costs for elder care.
More troublesome may be the labor force impacts of rapid aging, as there is a shortage of some skilled workers, both in the Rust Belt and tech centers, particularly younger ones. This reality is already causing problems in Europe, particularly in the economically devastated south, and also more prosperous East Asia, particularly Japan.
An older population, and fewer families, tend to depress economic growth, consumer demand and entrepreneurial creativity. Japan today is not only much older, but also more financially hard-pressed than in its ’80s heyday, heavily in debt and losing its once dominant position in several critical industries.
It is conceivable that some now rapidly aging metropolitan areas will be able to shrug off these effects, by attracting immigrants and newcomers from other parts of the country. But to do so, they will have to become more attractive to families, by creating more affordable, lower density housing and growing the local economy.
This, however, may prove difficult to achieve, especially in cities that seeking to severely limit or even outlaw “family friendly” detached housing (such as in California and the Northwest). Economic growth could also be hampered as the electorate ages and political pressure builds to increase support for the elderly (a dynamic already evident in Europe and Japan), even at the expense of future generations.
*Mr. Kotkin is Distinguished Presidential Fellow in Urban Futures at Chapman University in Orange, California; a contributing editor to the City Journal in New York; a Senior Visiting Fellow at the Civil Service College in Singapore, and a Fellow at the National Chamber Foundation.
Photo from Wikimedia Commons: The White Stag Sign, in Portland, Oregon, at night, showing the wording it began displaying in late November 2010. The 1940-built sign was designated a Portland landmark by the city's Historic Landmarks Commission in 1977
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