Demographics may not quite be destiny, but there’s no doubt that demographic trends create opportunities and challenges for business, communities, and governments. The 65 million children born in the United States during the 1944-1961 “Baby Boom” spurred investments in housing, education, and services that reverberated through the economy for decades. The current and impending retirement of this generation is creating opportunities for younger workers across the economy while increasing the stress on the Social Security and Medicaid programs. At the same time, younger workers aren’t having enough children of their own to ensure that social safety programs have enough payees to support program recipients. This phenomenon is occurring across the developed and developing worlds. China, which famously maintained a one-child per family population policy is now feverishly trying to encourage couples to have two children as the country realizes that work force which had been growing rapidly isnow close to peak size and that it may not have enough workers to support its aging population.
Here in Alaska we’re lucky to have a state demographer, Eddie Hunsinger, located within the Alaska Department of Labor and Workforce Development’s Research and Analysis Section. Eddie’s office is located right next the bow-tied institution that is Neal Fried; the section’s go to spokesman for all things related to labor and the economy. I sat down with Eddie and Neal in August to talk about the departments’ recently completed population projections for Alaska and the associated Alaska Economic Trends article. Here are some of my takeaways from that conversation and subsequent research.
Our Expectations for Future Populations are Shrinking
Alaska’s projected population for 2030 is the smallest projection that the department has made since the state started making regular population projections in 2007. In the 2007 population projection, the state expected that in 2030 there would be nearly 837,000 Alaskans. In 2010, high oil prices and tough economic conditions in the Lower 48 lowered outmigration rates and helped juice the projection for 2030 to nearly 887,000 Alaskans. Now, with just 12 years to go to 2030 (let that sink in for a moment) the state predicts we will have 794,500 Alaskans. That’s a shift of -5.5 percent from the 2007 projection and -11.6 percent from 2010 projection. The 2017 state population was 737,000. In order to reach 794,500 by 2030 we need to add 4,800 Alaskans a year. We’re naturally adding roughly 6,000 to 7,000 Alaskans a year with the difference between births and deaths. However…
We are amid the State’s Longest Period of Outmigration, Ever
…We need Alaskans to stop migrating out to the Lower 48. In each year since 2012-2013 more people left Alaska than have moved to Alaska. Last year the number of deaths and the number of residents who emigrated totaled more than the number of birth, so we lost 2,600 residents. In fact, the last year that we added close to 4,800 Alaskans we need to make the 2030 projection was 2012-2013 when we added 4,734 residents. Since then we’ve added less than required. In the ten years prior to 2012-2013 we added an average of 8,931 residents per year. While negative net migration might seem to be the story here, we note that…
We’re Just Not Making Children Like We Used to Make Them
…our birth rate has fallen by 55 percent since 1959-1960 from 3.21 per 100 Alaskans to 1.46 per 100 Alaskans in 2016-2017. The trend of fewer births has showed no signs of slowing down; between 2007-2008 and 2016-2017 the birthrate fell by 12 percent. The recession accounts for about 40 percent of that drop with the rest being the natural trend that has existed for decades. As shown at left, we have thousands fewer Alaskans under the age of 19 now than we expected we would have in 2007 (Anywhere the blue exceeds the dark outline indicates fewer residents in 2017 than expected in 2007). On the flip side, we have more young seniors than expected, particularly those in the 55-59 age group. If we see the same decline in the next decade (big if) that we saw in the last decade, we’ll have close to a thousand fewer births per year in ten years’ time. Of course, we could get a migration influx or the big slug of millennials currently heading through their prime reproductive years could get busy having kids. Regardless, of these events…
Community Expectations: Some Will Grow and Some will Shrink
…population growth in Alaska is going to be unevenly distributed. ADOLWD currently projects about half of Alaska’s boroughs and census areas to grow and half to shrink. Regionally, 80 percent of population growth is going to occur in Southcentral Alaska with Southeast Alaska losing population. On the community level, the big growers will be the Mat-Su Borough, where growth is being driven by proximity to Anchorage, lower relative building costs, and quality of life factors, and rural areas with higher than average birth rates such as the Kusilvak and Bethel census areas. If we look at the locations expected to lose population many are coastal fishing communities. The common thread of fishing leads this economist’s gut to say that the expense and challenge of buying into Alaska’s fisheries is deterring young folks from the pursuing traditional economic opportunities associated with these communities. The state and these communities have recognized the challenges posed by the “greying of the fleet” for over a decade, but these communities still aren’t attracting enough young people (yet) to shift the long-term projections from decline to growth.
Jonathan’s Takeaway: Our expectations for population growth in Alaska are more modest than they’ve been in years and negative net migration should continue into 2017-2018 and possibly 2018-2019. Over the next 12 years, population and political power will continue to concentrate along the road system (included the roaded interior) with Southeast populations continuing to age and shrink. The youngest areas of the state will be around Bethel where the state struggles the most with educational attainment and high-levels of poverty. Jonathan wants to thank Mr. Hunsinger and Mr. Friend for their time, thoughts, and patience; thoughts and errors here belong to Jonathan alone.
Jonathan King is a consulting economist and Certified Professional Coach. His firm, Halcyon Consulting, is dedicated to helping clients reach their goals through accountability, integrity, and personal growth. Jonathan has 21 years of social science consulting experience including 15 years in Alaska. The comments in this blog do not necessarily represent the view of employers and clients past or present and are Jonathan’s alone. Suggested blog topics, constructive feedback, and comments are desired at email@example.com.