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The New Demographics: Implications for Regional Planning

The New Demographics: Implications for Regional Planning. Frank Wen Senior Economist. Demographics . Fertility rate--birth Life expectancy—death Immigration/emigration Population--number of people, by age/gender/race/ethnicity Life-cycle activities/events-from birth to death

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The New Demographics: Implications for Regional Planning

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  1. The New Demographics: Implications for Regional Planning Frank Wen Senior Economist

  2. Demographics • Fertility rate--birth • Life expectancy—death • Immigration/emigration • Population--number of people, by age/gender/race/ethnicity • Life-cycle activities/events-from birth to death • Socioeconomic/cultural characteristics and behaviors • Outcomes/Impacts/Implications

  3. Total U.S. Fertility Rate: 1940 - 2000 TFR=2,130 in 2000, surpassing the “Replacement Rate” for the first time in 30 years Replacement Rate

  4. Historic California Births vs. Historic U.S. Births CA’s Baby Bust was much shorter than for the U.S.CA’s Echo Boomer generation was 50% bigger than its predecessor

  5. Estimated Life Expectancy at Birth

  6. Is Demography Destiny? Demography matters! Three examples closely linked to population and age distributions: • FBI Uniform Crime Report • Vehicle Miles Traveled (VMT) Growth vs. Population Growth • Forecasts Building Permits

  7. U.S. Crime Rate From 1982-2001 (Number of Offenses per 100,000 Inhabitants) Source: FBI Uniform Crime Report

  8. State/Region/LA Crime Rate (Number of Offenses per 100,000 Inhabitants) Source: California Department of Justice

  9. In the News

  10. Goal Faces Tough Obstacles

  11. Percent Distribution of Arrests by Ages: 1995-2001 Source: FBI 1995 and 2001Uniform Crime Reports

  12. Population Growth for 16 to 24 Age Group Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  13. Population Growth for 20 t0 29 Age Group Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  14. Population Growth for the Two Age Groups Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  15. Demography Matters Three examples closely linked to population and age distributions: • FBI Uniform Crime Report • Vehicle Miles Traveled (VMT) Growth vs. Population Growth • Forecasts Building Permits

  16. Population Growth vs.VMT Growth Source: State of the Region, 2002, Prepared by SCAG

  17. Licensed Driver Rate (Percent by Age) Source: National Personal Transportation Survey (NPTS) 1995

  18. Population Growth for 16 to 24 Age Group Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  19. Population Growth for 20 t0 29 Age Group Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  20. Demography Matters Three examples closely linked to population and age distributions: • FBI Uniform Crime Report • Vehicle Miles Traveled (VMT) Growth vs. Population Growth • Forecasts Building Permits

  21. Housing Supply in the 90s Lagged Employment Growth

  22. Housing Values Outpace Construction Costs

  23. Who Is Buying? Age

  24. How Much Are They Paying? Price

  25. Apartment Demand Will Surge As People in Their 20s Enter the Market Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  26. First-time Home Buyers, 25-34 Increasing Through 2025 Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  27. Repeat/Second Home/Vacation Home Buyers, 35-54 Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  28. Age 55-64 Population At Peak Source: State of California, Department of Finance, Race/Ethnic Population with Age and Sex Detail, 1970-2040. Sacramento, CA, December 1998.

  29. Rapid Growth in Elderly Population is Inevitable • Population aging is primarily due to: • Declining fertility rates • Increasing life expectancy • Population aging can be measured by: • Average or median age of the population • Elderly dependent ratio: Population age 65 and abovePopulation between 20 and 64

  30. Share of Population Growth by Dependent Group 31.4% 27.5% 29.7% 11.1% 1975-2000 2000-2025 70% Under 20 60% Above 65 50% 40% 30% 20% 10% 0%

  31. Share of Population Growth by Ethnicity 19.1% 22.6% 81.9% 74.0% White Hispanic Asian Black AI 110% 5.0% 100% 2.5% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -1.9% -3.8% -10% 1975-2000 2000-2025

  32. U.S. Annual Compound Growth Ratesof Salary Jobs and Labor Force

  33. Who Are Baby Boomers? A Snapshot as of 2000

  34. Government Related Services Per Capita $18,000 $16,000 Health Care $14,000 $12,000 $10,000 Social Security Public Education $8,000 $6,000 $4,000 $2,000 $0 0-19 20-34 35-44 45-54 55-64 65-74 75-84 85 and Above Other Retirement All Other Public Transfers

  35. Projected Share of Households by Age Cohort: 2000-2040 75+ 55-64 35-44 15-24 45-54 25-34 65-74 Source: SCAG Preliminary Draft 2004 RTP Trend Forecasts.

  36. HH Income Before Taxes Source: 2000 Consumer Expenditure Survey

  37. HH Average Annual Expenditures Source: 2000 Consumer Expenditure Survey

  38. Major Consumer Expenditure Categories Budget Share by Age Groups in 2000 Misc./Other Cash Contrib. Transportation Housing Food Insurance/Pen. Health Care Apparel/Service Alchohol Bev.

  39. Personal Income Taxes Paid by Californians Source: California State Controller’s Office, based on data from the U.S. Census Bureau’s 1997 Current Population Survey

  40. Implications for Long Term Planning

  41. Trends and Forecasts Suggest: • The region’s economy will likely grow very slowly for a very long time after 2010, and will be prone to recession! • Living standards and per capita income will rise more slowly. • The region, like the U.S., will face fiscal challenges. • Education and workforce training policies should encourage increasing labor force supply, and put more emphasis on on older workers.

  42. Trends and Forecasts Suggest: • To ensure that long term planning is on track to address “who are we becoming and what challenges are ahead,” future trends—planners and decision-makers must take into account not simply growth projections, but the components and characteristics of the forecasts (e.g., ethnic and age cohort distributions).

  43. Transportation Planning • It is prudent to conduct systematic evaluation of long-range transportation plan components in order to assess impacts of slow future economic growth. • Revenue forecasts need to take into account the challenges resulting from population aging and demographic shifts. • Transportation demand forecast models need adjustment to reflect the higher proportion of elderly households in the future. • Long-range transportation planning should emphasize safety, security, and accessibility goals-which which will become more important to an aging society.

  44. Labor Force Training & Workforce Investment • The region’s economy will likely grow very slowly for a very long time after 2010, and will post great challenges to the region. • The core of this concern is originated from population aging and lack of labor force growth. • Labor force training and workforce investment play critical roles in addressing these challenges. • Education is the key. • In the long term, efforts should be targeted on population groups with the lowest labor force participation rates, the least educational attainment, and highest unemployment rates. • The earning disparities between gender, age, and race/ethnicity should be carefully investigated to correct likely “inequality”. • Immigration policy needs to be adjusted to attract high-quality labor force.

  45. What Are the New Demographics? • Tomorrow’s elderly will behave differently from today’s elderly--Baby Boomers will be different from their parents. But how? • Some of the elderly workers will stay longer in the labor force. But to what extent? • Will Baby Boomers age in place? What are their next moves? • Where will young Hispanics and others in the workforce be able to afford apartments and starter homes in our supply constrained, high priced housing markets?

  46. What Are the New Demographics? • Will immigrants continue to cram into crowded quarters as they come to the region for jobs? • Are mixed use developments an emerging trend driven by new lifestyle demands of empty-nest boomers in their mid 50s? • Will the different lifestyle and housing needs of aging Baby Boomers and young Hispanics shape development patterns and affect voting decisions on land use issues?

  47. Summary • Demography is destiny! • The region’s population is aging and will be more diversified • Population growth by age cohorts provides valuable information on timing and phasing of future growth challenges • The slow growth of employment after 2010 is particularly worrisome, the region needs collectively to communicate this demographic trends, to build up consensus, and to assess the likely impacts in every aspects of our life and regional planning

  48. Summary • How do we assure social equity goal achievement and a healthy economic structure for the region? • An aging society will also generate new opportunities--different growing industries, ethnic markets, and communities • Population aging will pose challenges and cause crisis, however, challenges and crisis can be met with a reasonable set of policy choices and early-on planning.

  49. Thank You! Questions? Comments? Visit us on the Web at:http://www.scag.ca.gov/economy

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