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Florida Faces a Demographic Vise Regardless of Whose Estimates You Use


• Dr. Matthew Ladner

Regular EdFly Blog readers will recall a series of blog posts concerning Florida’s Age Dependency Ratio. The short version: the Census Bureau projects a huge increase in both the elderly population and the youth population in Florida.

With a smaller percentage of the population working age and young and old putting increased demands on public dollars in the form of K-12 and Medicaid, respectively, the Census Bureau foretells a demographic vice will increasingly squeeze Florida. Economists have found that high age dependency ratios (calculated by adding the number of young and elderly people and dividing by the number of working-age people) negatively impact both tax revenue and economic growth. Basically when you have lots of people either retired or too young to work drawing upon major state spending programs like Medicaid and K-12 education, you put a huge squeeze on your working age population.

So there is good news and bad news. The good news is that Florida’s own Office of Economic and Demographic Research (EDR) has another set of estimates with fewer elderly and young people. The bad news is that it doesn’t matter much—even under the EDR projections, Florida still winds up with a squeezed working age population in 2030 and beyond.

So here are the Census Bureau apocalypse scenarios from the 2005 Interim Estimate:

Florida Faces a Demographic Vice Regardless of Whose Estimates You Use 4

 

Here are the EDR estimates for the same period:

Florida Faces a Demographic Vice Regardless of Whose Estimates You Use 2

 

The EDR uses different estimating techniques and shows more than 2 million fewer 65+ Floridians and about 800,000 fewer 5-17 year olds. So at least if EDR’s estimates prove more accurate than the Census Bureau, then Florida should be fine right?

In the immortal words of Lee Corso: not so fast my friend!

Lee Corso

The EDR projections do see fewer young and elderly people in the years ahead. They also however see a slower rate of growth in the working age population. Population growth slowed considerably in Florida during the great recession, and the fact that people had difficulty in selling their homes around the country led to fewer people moving to Florida. The EDR estimates forecast a decline in the annual rate of population growth in Florida from 3 percent per year to about 1.4 percent per year. Only time will tell for certain whether population growth returns to historical averages, but either way, trouble lies ahead.

The Census Bureau calculates the total age dependency ratio by adding the number of 0-17 year olds to the number of 65+ and dividing it by the number of 18-64 year olds. So let’s do the math. The Census Bureau projects 7.7 million elderly and 5.7 million 18 and younger, against 15.1 million people between the ages of 19 and 64. Plug that into your calculator and you get a projected age dependency ratio of 89. The highest age dependency ratio in the country in 2010 was 69, so 89 is trouble.

Let’s take the EDR estimates: 4.7 million 17 and younger, 5.7 million 65+ with 13.2 million in the 19-64 bracket. Run the math and you get a total age dependency ration of 78—lower than the Census bracket, but still far higher than any state has today. The Census Bureau has a strong record on state age demography forecasts, but the EDR could be right. If you hedge your bets by splitting the difference between the two estimates (assuming that annual net population growth is higher than 1.4 percent but lower than the historical 3 percent) and you are back in the 80s.

It’s far above my pay grade to say which set of demographic estimates will prove more accurate. What I can say however is that Florida faces huge challenges under either scenario. People over the age of 85 are the biggest driver of Medicaid spending. The EDR foresees a 55 percent increase in the numbers of these Floridians between 2010 and 2030. Buckle up.

The middle aged taxpayers of 2030 (and beyond) sit in Florida classrooms today, creating an urgent need to secure still further improvements to the bang in every education buck. Note that the implicit assumption of the age dependency ratio has working age people actually, you know, working. The working age population needs to be working so that they will be paying the taxes necessary to sustain K-12 and universities for the kids and health care assistance for the elderly. Despite huge improvement since the late 1990s, Florida still has a worryingly large percentage of students who fall below grade level proficiency, especially when viewed through the lens of age demography. A mind has always been a terrible thing to waste and the price of this waste will grow catastrophically.

Surviving and thriving in the decades ahead will require substantial improvements in the quality and cost effectiveness of basic state services, most notably health care and education — the sooner the better. The status-quo does simply not represent a viable option if we want the next generation to live the American dream in Florida. Modernizing state functions for the 21st Century represents the central trial of this generation. We can and we must rise to the challenge.

Lee Corso photo credit


About the author


Dr. Matthew Ladner @MatthewLadner

Matthew@excelined.org

Dr. Matthew Ladner is the Senior Advisor of Policy and Research for the Foundation for Excellence in Education. He previously served as Vice President of Research and Goldwater Institute. Prior to joining Goldwater, Dr. Ladner was director of state projects at the Alliance for School Choice. Dr. Ladner has written numerous studies on school choice, charter schools and special education reform. Most recently, Dr. Ladner authored the groundbreaking, original research Turn and Face the Strain: Age Demographic Change and the Near Future of American Education, outlining the future funding crisis facing America’s K-12 public education funding. He also coauthors the American Legislative Exchange Council's annual Report Card on American Education: Ranking State K-12 Performance, Progress and Reform. Dr. Ladner has testified before Congress, the United States Commission of Civil Rights and numerous state legislative committees. He is a graduate of the University of Texas at Austin and received both a Masters and a Ph.D. in political science from the University of Houston. Dr. Ladner is a Senior Fellow with the Foundation for Educational Choice. He lives in Phoenix, Arizona.