Aging Boomers, Fewer Babies: What Will A Changing Population Mean For Vt.'s Economy?
As Vermont’s demographic profile undergoes a potentially dramatic shift over the next decade or two, analysts in state government are trying give policymakers a more precise glimpse at what the population is going to look like in the future.
Baby boomers — and there are a lot of them in Vermont — are on the cusp of their retirement years. And there aren’t a whole lot of youngsters to take their place in the workforce.
It’s a demographic shift with some pretty profound implications on the Vermont economy, and some policy analysts are trying to get ahead of the curve.
“Well, if you’re interested in the effect of demographics on the economy or on the state budget, you need good population projections,” says Joyce Manchester, a senior economist at the Legislature’s Joint Fiscal Office.
The effect of those demographic shifts are already becoming apparent. In appearances across the state, Gov. Phil Scott offers up a familiar lament.
“Every single day on average, we lose six workers from our workforce,” Scott said at a press conference this week.
That daily six-person loss that the governor likes to talk about has less to do with the job market than it does with demographics. Those six people aren’t leaving Vermont necessarily, or giving up on looking for work. Most of the time, they’re just hitting retirement. And the worst of it is yet to come.
Manchester says most baby boomers — defined by the U.S. Census Bureau as being between 53 and 71 — are still at work and drawing incomes right now. But, she says, “about 10 or 15 years from now, most of those folks will be moving into their mid-70s, and you’ll see a big drop.”
"Unless we have a substantial increase of in-migration, the fertility rate is telling us the population is going to decline in the future." — Fiscal analyst Neil Schickner
Not only will those people be contributing less in the way of state revenues, they’re also going be more dependent on state services such as health care, transportation and housing.
“If we have this big increase in the number of older people relative to working age people, then that’s trouble, because that means we’re not bringing in the revenues to provide all the services that seniors will need,” Manchester says.
And it’s looking like that’s precisely where Vermont is headed. Manchester and a senior fiscal analyst at the Joint Fiscal Office, Neil Schickner, recently teamed up on a project that examines birth rates in Vermont over the past 35 years.
The big takeaway is that women are having fewer babies now than they did back in 1980 — far fewer, in fact. In 1980, Vermont women gave birth to about 8,000 babies a year. Today, the figure is closer to 6,000.
Schickner says the number of people born in Vermont on a given year has now fallen below the number needed to replace those who are dying.
“So unless we have a substantial increase of in-migration, the fertility rate is telling us the population is going to decline in the future,” Schickner says.
The birth rate analysis is part of a broader effort to get a better grasp on what Vermont’s population is going to look like in the future. Manchester says there are a number of Vermont population projections out there, but not a single one that everyone has agreed on.
So Manchester has reached out to some policy analysts in the executive branch to try to create a consensus population forecast.
“Joyce called me, probably about a year ago now, and said, ‘You know, everybody’s got different ones. Shouldn’t we just have one?’ And I said, ‘Sure,’” says Ken Jones, an economic research analyst at the Agency of Commerce and Community Development.
Jones used to do population projections for the Vermont Department of Health, before that department stopped doing those periodic analyses.
"The workforce number itself is projected to decline for the first time in our history." — Economic analyst Ken Jones
Jones says he’s still a big believer in the value of good population projection numbers.
“It’s kind of a fascination for me to understand the demographic shifts, because I do want to be ready for it, and I want Vermont to be ready for it,” Jones says.
Jones says a lot of other states are in the same demographic bind that Vermont finds itself in. But as one of the grayest states in the nation, according to U.S. Census data, Vermont is something of an outlier in this regard. The proportion of the population under age 5, for instance, is lower in Vermont than in any other state in the country.
“The workforce number itself is projected to decline for the first time in our history,” Jones says.
Manchester says the implications for elected officials and other policymakers are significant. And she says it’ll be tough to make good decisions without good data.
“I do think that more attention to this issue will prove to be helpful going forward,” Manchester says. “And we have a chance to think now about how to deal with this problem going forward, so now is really the time to do it.”
Manchester says it’s unclear at this point who’s going to take the lead on the consensus population forecast, or when it will be ready for publication. But she says she hopes the legislative and executive branches can pool the analytical resources needed to make it happen.