Facts and Myths: Montana’s Aging Population &

Its Impacts on The Economy

Mary Craigle Bureau ChiefCensus and Economic Information Center (CEIC) MT Dept. of Commerce

Barbara WagnerChief Economist

MT Dept. of Labor and Industry

Fact or Myth?

Montana is the Least Populous State.

Montana Population: 1,005,141(RANK 44th)

Montana’s Population:2010: 989,4152012: 1,005,141

Source: 2010 Census, Census and Economic Information Center

Largest Cities:Billings - 104,170Missoula – 66,788Great Falls – 58,505Bozeman – 37,280Butte – 33,525

Smallest “Cities”:Neihart– 51Outlook – 47Ismay – 19(excludes CDPs)

Population Density:6.86 People per Square Mile (Rank 48th)

Source: 2010 Census, Census and Economic Information Center

Population Density Comparisons

(People/ Mile2)

U.S.87.4

D.C.9,856.5

New Jersey (Most Dense)

1,195.5

Alaska (Least Dense)

1.2

- Slow technology diffusion.

- Limited networking between businesses.

- Difficult to develop relationships with universities

for worker training and research.

Why Population Density Matters?Larger Share of Government Services than U.S. Average

US MT0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Government Government

Leisure ActivitiesLeisure ActivitiesAll Other

All Other

Health Care and Ed-ucation

Health Care and Ed-ucation

Business Services Business Services

Financial ServicesFinancial Services

Retail and Wholesale Trade

Retail and Wholesale Trade

ManufacturingManufacturing

Construction

Construction

MiningMining

Agriculture Agriculture

Transportation and Utili-ties

Transportation and Utilities

Source: Bureau of Economic Analysis, Gross Domestic Product 2011.

Montana Population Projection

Historic

Projected

Why this matters?Consumers comprise 80% of GDP.

Faster Population Growth = Faster Economic Growth

1,267,936 Residents by 2060

903,773 Residents in 2000

Fact or Myth?

Montana is the Oldest State.

Maine is the Oldest State in the Nation:Montana Ranks 7th

• 14.9% of Montanans were age 65 or older in 2010.

• By 2025, this percentage will rise to 21.8%, placing MT as 4th Oldest State.

Population Projections by Age

2013 Working Age

65.5%

2060 Working

Age 57.8%

Dependency Ratio:“Workers” Compared to Old & Young

(𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒 𝑎𝑔𝑒𝑑0−14 )+(𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒𝑎𝑔𝑒𝑑 65𝑎𝑛𝑑𝑜𝑙𝑑𝑒𝑟 )(𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑒𝑜𝑝𝑙𝑒𝑎𝑔𝑒𝑑 15−64 )

∗100

Why this Matters:Montana workers and business owners will

face increased pressures to care for the old and

young in the future.

-Higher Taxes?-Require Higher Wages?

-More Caretaking?20

1 3

Components of Federal Spending

Source: Congressional Budget Office, 2013 Long-Term Budget Outlook

Perc

enta

ge o

f GD

P

Fact or Myth?

Montana has the Oldest Workers.

Montana Has Highest Percent of Labor Force Over 65

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

Mon

tana

Sout

h D

akot

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ebra

ska

Okl

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Wyo

min

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aine

Kans

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Conn

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utN

ew H

amps

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Flor

ida

Mas

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aryl

and

Miss

ouri

Del

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ode

Isla

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orth

Dak

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Tenn

esse

eLo

uisia

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rict o

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ork

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Nor

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Sout

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Arka

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Calif

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Alab

ama

Ariz

ona

Texa

sKe

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kyAl

aska

Uta

hG

eorg

ia

8.6%

Source: Current Population Survey, Bureau of Labor Statistics

Montana Labor Force Participation:Aging Population is Reducing Participation Rates

Why this matters?Declines in Labor Force Size Will Likely Lead to Worker Shortages

Source: Economy at a Glance, Nov. 2013, Research and Analysis Bureau, MT DLI

Labor Force Participation Rate

Source: 2009-2011, American Community Survey

0%

10%

20%

30%

40%

50%

60%

70%

80%

Alas

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Min

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New

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and

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uth

Dak

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wa

Wisc

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Miss

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irgin

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65%

Perc

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of P

opul

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in th

e La

bor F

orce

Fact or Myth?Don’t Worry. Younger workers will

fill in the gap.

Labor Force Participation Rates by Age

Source: Economy at a Glance, Nov. 2013, Research and Analysis Bureau, MT DLI

Currently, Young

Workers have Lower

Participation

Participation Rates for All Ages have Declined

Employment Status of the Montana Population

Montana’s Aging Population

Source: Census and Economic Information Center, MT Dept. of Commerce, April 2013

2000 2005 2010 2015 2020 2025 2030 -

100,000

200,000

300,000

400,000

500,000

600,000

700,000 Under 20 20 to 64 Over 65

Working-age population levels out after

2015.

Workers must become more productive to

maintain economic growth.

Montana Workers Will Need to Be More Productive

• Education

• Experience in job

• Job Matching

• Industry Mix

• Urban concentration

• Use of technology

• Spread of best practices and innovative methods

• Business Size

Fact or Myth?Aging Population Also Has Economic

Benefits

Montana Personal Income by Industry Since 1930

1930 1940 1950 1960 1970 1980 1990 2000 20100%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mining

Wholesale And Retail Trade

Government

Services

Health Services

Professional and Technical ServicesFarm Earnings and Agriculture

Manufacturing

Construction

Transportation and Utilities

Finance and Real Es-tate

Leisure Activities

Other Services

Source: Bureau of Economic Analysis, Personal Income from 1930, SICs to NAICS conversion compiled by the Montana Department of Labor and Industry Research and Analysis Bureau.

1930-1939 1940-1949 1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-20120

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Real Personal Income in Montana by Industry by Decade(2005 Dollars, Decade Average)

Government Health Care

Leisure Activities

Trade

TransportationManufacturing

Construction

Farm Earnings and AgMining

Finance/Real Estate

Source: Bureau of Economic Analysis, Personal Income from 1930, SICs to NAICS conversion compiled by the Montana Department of Labor and Industry Research and Analysis Bureau.

Why this matters?Health Care and Trade Providing Growth in Real Income

Utilities

Agriculture

Mining

Transportation

Manufacturing

Admin and Waste Services

Professional Services

Finance and Real Estate

Construction

Other

Public Affairs

Education

Leisure Activities

Health Care

Trade

0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Comparative Industry Employment

Source: Quarterly Census of Employment and Wages, 2012.

Federal – 3%State – 5%

Local – 11%Private – 81%

Ten Growing Occupations with Unmet Demand for Workers

Occupation

Projected Annual Growth

Minimum Training Required

Home Health Aides 96 Short OJT

Registered Nurses 72 Associate

Personal and Home Care Aides 54 Short OJT

Elementary School Teachers 52 Bachelor's

Nursing Aides, Orderlies, and Attendants 46Vocational

training

Medical Secretaries 31 Moderate OJTNetwork Systems and Data Communications Analysts 22 Bachelor's

Medical Assistants 22 Moderate OJT

Child Care Workers 22 Short OJTOJT: On-the-Job Training

Fact or Myth?Retirees Contribute Retirement Income to

Montana’s Economy.

Components of Personal Income

Growth Comes from All Areas of Income:Highest Growth in Transfers

Percent Wage Growth By Sector

Total Private Government Federal State Local

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

3.6%

4.2%

1.9%

0.9%

2.1%

2.5%2.7%

3.0%

1.5%1.9%

-0.2%

2.3%

1.1%1.4%

-0.1% 0.2%

-1.7%

0.7%

2011 to 2012 Growth2008 to 2012 Growth

2008 to 2012 Real Growth

Second Fastest Growth in Nation

Montana private workers are doing pretty well for wage and income growth right now.

Source: Quarterly Census of Employment and Wages, 2012.

Montana Ranks 35th in Per Capita Income (Improved from 47th in 2002)

Why this matters?Measure of Standard of Living

Real Per Capita Income Over Time2005 Dollars

19291932

19351938

19411944

19471950

19531956

19591962

19651968

19711974

19771980

19831986

19891992

19951998

20012004

20072010

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Real

200

5 Pe

r Cap

ita

Inco

me

U.S.

MT

Source: Bureau of Economic Analysis, 2012.

Age Impacts our Economy

• Population growth slowing

• Worker shortages with more retirees

• Pressure on workers to care for young/old

• Changes in components of personal income

• Industry demand shifts towards services

• Need healthcare worker training

QUESTIONS???

CONTACT INFORMATION

Montana Department of LaborWWW.LMI.MT.GOV

Montana Department of CommerceCensus & Economic Information Center

WWW.CEIC.MT.GOV

Everything You’ve Seen Here Today and More is Available At:

HTTP://BUSINESSRESOURCES.MT.GOV/EDAC/MEETINGINFORMATION.MCPX