As Pennsylvania’s retirees grow in the future, the working- and school-age population that supports them will shrink.
These are the forecasts in a new report from the Independent Fiscal Office, which finds population growth in the state flat in the short term and a slight decline (-0.1% annually) in the long term.
After modest population growth since 2010 (0.2% annually), long-term projections appear to wipe out some of this growth. The declining population among young people is worrying.
“The school age cohort (0 to 19 years old) has declined at 0.4% per year from 2010 to 2020 and is projected to decline at 0.9% per year in the short and long term.” the report noted.
While growth and decline have not been equal, and changes have favored the Southeast and suburbs near major cities, The Center Square previously reported, state emergency services have faced funding struggles.
The loss of population has also meant the loss of wealth, resulting in a higher tax burden for the remaining Pennsylvanians.
The IFO report offers little hope that the nationwide pattern will change, even as some counties grow. The state will continue to lose working-age residents. These trends are being driven by deaths exceeding births in the state and net migration into the state declining compared to previous years.
“The working-age cohort (20-64 years) remained flat from 2010 to 2020 and is projected to shrink by 0.6% per year in the short-term and by 0.5% per year in the long-term.” the report noted. “Unless the labor force participation rate increases, this trend will stunt future economic and income growth.”
Economic stagnation is a serious problem for government agencies to provide services and maintain existing infrastructure, but it’s also a problem for catering to booming retirees.
“The retiree cohort (ages 65 to 79) has grown at 3.2% per year from 2010 to 2020 and is projected to grow at 2.8% per year in the short term and 0.9% per year in the long term.” the report noted. “The increase in this age cohort and the next age cohort implies strong demand for health and long-term care services moving into the future.”
Pennsylvania has lost residents in every age cohort from 0 to 24 in absolute terms since 2010.
The average US state faces a similar problem of declining youth and aging residents, but the situation in Pennsylvania is a little worse. In 2010, the state had 3.9 working-age residents versus retirees, compared to the national average of 4.6. By 2030, Pennsylvania is projected to have 2.4 working-age residents versus retirees, compared to the national average of 2.7.
Barring dramatic changes, Pennsylvania political leaders will face stagnation and population decline that could limit economic growth. The youth may have to settle for less as budgets struggle to provide healthcare and services to the aging population.
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