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MN2020 - Minnesota 2020 Journal: No longer “that” Minnesota
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Minnesota 2020 Journal: No longer “that” Minnesota

July 12, 2013 By John R. Van Hecke, Executive Director & Fellow

Minnesota is changing. Whether your family arrived in 1853, 1883 or 1903, we’re no longer that Minnesota. In fact, if you arrived just five years ago, we’re not that Minnesota either. We’ve changed and we’re going to continue changing. This isn’t ideological posturing; the data bear it out. But to prosper, Minnesota’s public policy framework must change, matching demographic shifts.

Minnesota’s future hangs on two demographic phenomena: the birth/death rate and immigration. Immigration, in this context, means people moving to Minnesota regardless of birthplace. Generally, people move here for economic reasons. They’re seeking better jobs and Minnesota is creating better jobs at all wage levels. Minnesota will likely create jobs faster than birthrate can supply the workforce. Consequently, Minnesota is counting on people moving here from other states and nations.

Sustainable economic growth requires the right mix of people and opportunity. Minnesota is growing slowly but steadily. Despite the recent economic crisis, Minnesota’s population grew by about 75,000 in the past two years or by 1.4%. But, Minnesota is not growing uniformly. Twin Cities’ suburbs have the fastest projected growth while rural counties are losing population. Significantly, Minnesota is aging unevenly. Broadly speaking, rural Minnesota is aging faster than Minneapolis-Saint Paul. Rural areas will disproportionately feel the effects of growing age.

According to the Minnesota State Demographer’s Office, by 2030, 69 of Minnesota’s 87 counties’ population will have at least one of every five people age 65 or older. That’s going to mean a greater demand for social and healthcare services. Simultaneously, the number of school age children, ages 5-17, will be eclipsed by 65+ aged adults. 2020 is the tipping point where Minnesota will have more older adults than we’ll have school-aged kids. Projections suggest that, by 2060, Minnesota’s school-aged population will be about 1.1 million while 65+ aged adults will constitute 1.5 million.

The post-World War II baby boom created a demographic bulge. That generation, born between 1946 and 1965, were themselves a generational reaction to the war years and, particularly, to the Great Depression’s economic privations. Post-war economic prosperity is reflected in higher standards of living, increased wages, birthrates and family size. Greater life expectancy, however, means greater pressure on healthcare services, insurance and human services.

There’s a temptation, however, to view increased demand on social and healthcare services as a negative thing. Conservatives want us to see community and family services as cost centers. In this view, kids and old people are costs, not assets. Nothing could be further from the truth. People are always a strength.

Demographically, the baby boom population bulge evens out and disappears within the next 30 years. Current population projections anticipate uniform age clustering with one notable change; everyone is living safer and longer. That’s why 65+ aged adults are a growing population segment. Fewer people are dying from the standard workplace, home and travel accidents than ever before. Plus, improved healthcare means that a whole host of life-ending diseases no longer have the same strangle hold on mortality.

Minnesota’s changing demographics creates great opportunity. It also creates the risk of missing that opportunity, falling into a downward spiral of declining family stability, wages and growth. The first step requires reversing the rapid wealth concentration trend. Minnesota’s median household income, adjusted for inflation, was the same in 2009 as it was in 1989. That means most Minnesota families are losing ground economically while Minnesota’s highest income earners are becoming wealthier, faster. This is an unhealthy, unsustainable trend that inhibits rather than facilitates future state economic growth.

Increasing Minnesota’s minimum wage will create upward pressure on stalled wage growth at all levels. But, the greatest impact will be felt by lower and middle income earners. Expanding wages, even by ten percent, creates growth in the housing, services and retail economies. Several million people experiencing modest wage growth will have a greater state and local economic impact than a few people earning several million dollars more annually.

Minnesota’s present public policy framework, created during a period of ascending conservative policy priorities, will not be able to address the demographic changes that we’re experiencing. The clear, obvious path forward is changing Minnesota’s public policy direction. Investing in people through better schools, affordable healthcare and job growth is smart public policy.

Tomorrow’s Minnesota will be rooted in today’s and yesterday’s Minnesota. Our state’s tradition of innovation and infrastructure investment has created economic growth and expansion even as surrounding states experience contraction and population loss. The lesson is clear. When we focus on what really matters—schools, healthcare and jobs—Minnesota moves forward. The data don’t lie.

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