Could Demographics Be Destiny?

Member Group : Jerry Shenk

In September, 2013, the Washington Post published an article entitled "The Northeast is getting older…" detailing state-by-state median age data.

In 1990, Pennsylvania’s median age was 34.9 years, third behind Florida (36.2) and West Virginia (35.3). In 2010, Pennsylvania’s median age increased to 40.1. Only Maine, West Virginia, Florida and Vermont are older.

As Pennsylvania aged, its growth lagged much of America’s. Allocated by population, in 1990 Pennsylvania held 21 of 435 seats in the US House of Representatives. After 2010, Pennsylvania’s seat count fell to 18.

The Post reported that the elderly "are less likely to move … than younger Americans, who, affected by the recession and the drop in economic opportunities in the Northeast and the Rust Belt, have moved…to Southern and Western states. Those factors have sent the median age of Northeastern states soaring."

Among the main findings of a Mercatus Center study on personal and economic freedom was that people follow jobs and jobs follow freedom, especially economic freedom.

Union-controlled rustbelt states, Pennsylvania included, perpetuate job-limiting, market-distorting policies which make them unattractive to job producers — soaring education spending, closed shops, uncompetitive business taxes and prevailing wage "protections." Right-to-work, less-regulated Southern and Southwestern states are more appealing.

Economist Veronique de Rugy synopsized the Mercatus study: "[E]conomists…created a ranking of the freest to the least-free states in the country based on three public policy dimensions affecting economic, social and personal freedoms. …[W]hen controlling for climate and other variables, all three dimensions of freedom are positively correlated to migration, but the results are exceptionally strong for economic (fiscal and regulatory) freedom."

In other words, employers and people move to more economically-free states, because economic freedom is a reliable indicator of prosperity.

The Census Bureau projects longer life expectancies, too: By 2020, as many as 72 million Americans will be over the age of 65, more than twice as many as in 2000. The Bureau estimates that the number of Americans living more than 85 years will increase from 5.5 million in 2010 to 19 million by 2050.

At the same time aging Northeastern states such as Pennsylvania are forced to commit more of their budgets to social services, their tax bases are dwindling.

The study poses a conundrum for Pennsylvania which just elected a governor whose policies, with one notable exception, appear limited to preserving the status quo.

Pennsylvania’s new governor has proposed increasing education spending. But additional spending means more taxes, a poor strategy to keep people from emigrating to economically freer areas. If the governor wishes to attract more people to and keep our kids in Pennsylvania, he must focus on job creation.

Pennsylvania’s demographics contain dire warnings: Unless Harrisburg acts to solve Pennsylvania’s pension crisis, rationalize and reduce taxes, including business taxes, minimize regulatory burdens, promote free markets, pass right-to-work legislation and repeal prevailing wage laws, all to attract new private-sector jobs, Pennsylvania’s aging demographics will be Pennsylvania’s destiny.

Without lots of new jobs, Pennsylvania’s aging demographic spiral will become a doom loop.