Minnesota Demographic Trends In A Changing World

Tom Gillaspy, State Demographer

Mn Dept of Administration

August 2008

Minnesota Has Been Very Successful

(Especially For A Cold Weather State at the End of the Road)

• Our economic growth rate has exceeded the national average

• Our population growth rate leads the frost belt

• We rank with the leaders on many social and economic indicators

• Education has been a key contributor to the state’s success

2007 Minnesota Per Capita GDP Is 8.8% Above The National Average

BEA

Minnesota Per Capita Income Has Grown Faster Than The Nation’s

85%

90%

95%

100%

105%

110%

1930 1940 1950 1960 1970 1980 1990 2000 2007p

Per Capita Income

Per Capita DisposableIncome

Minnesota & New Hampshire Have Long Led The Frost Belt In Population Growth

0.97%

0.23%

0.06%

0.34%

0.86%

1.60%

0.67%

1.21%

0.75%

0.29%

-0.03%

0.75%

0.59%

0.85%

0.37%

0.96%

-0.5% 0.0% 0.5% 1.0% 1.5% 2.0%

Minnesota

Iowa

North Dakota

South Dakota

Wisconsin

New Hampshire

Frost Belt

U.S.

Annual Average Change

2000-07

1950-07

Minnesota Ranks Highly in Many Social/Economic Indicators

• 2nd percent of 16-64 employed (76.9%)

• 2nd cost of living adjusted per capita income (OK DOC)

• 8th lowest poverty rate

• 1st percent with health insurance 2004-06 ave

• 9th median family income in 2006

• 2nd Kids Count 2007

• 4th most livable state (Morgan Quinto Press)

• 4th lowest rate of disability among people age 16-64

• 1st with at least high school degree (90.7%)

• 12th with at least a bachelor’s degree

• 1st home ownership

• 2nd United Health Foundation ranking of state healthiness 2007

Updated July 2008

Past PerformanceDoes Not EnsureFuture Results

From 2004 to 2007 Minnesota Underperformed the US Averages

• Personal income growthUS 6.2% MN 4.4%

• Per capita personal income growth US 16.6% MN 13.5%

• GDP growthUS 8.4% MN 4.8%

• GDP per capita growthUS 5.4% MN 2.6%

Four Mega-Forces Will Shape Minnesota’s Economy

• Globalization

• Technology

• Energy prices

• Demography

Population Change

Loss

Gain Under 1,000

Gain 5,000 to 1,000

Gain More Than 5,000

Population Change 2000-04Census Bureau Estimate

Upper Midwest Becoming More Diverse But Still Less Than The Nation

4%

6%

6%

9%

9%

24%

9%

14%

9%

13%

14%

33%

0% 5% 10% 15% 20% 25% 30% 35%

Iowa

Minnesota

North Dakota

South Dakota

Wisconsin

United States

Percent Population of Color

2005

1990

Note: Population except white alone, not Hispanic, 2005 Census Bureau estimate

Minnesota’s Children Are More Diverse Than Older People

20%

16%17%

12%

8%6%

5%3%

0%

5%

10%

15%

20%

25%

Under 1

0

10 to

19

20 to

29

30 to

39

40 to

49

50 to

59

60 to

69

70+

Age Group

Pe

rce

nt

Min

ori

ty

2000 Census

Students Of Color Are Increasing While White Students Are Declining

4585,923

19,533 19,515

-59,202

-13,773

-70,000

-60,000

-50,000

-40,000

-30,000

-20,000

-10,000

0

10,000

20,000

30,000

Am Indian Asian Hispanic Black White Total

Ch

an

ge

En

roll

me

nt

20

00

-01

to

20

06

-07

Mn Dept of Education data

Students Speaking Non-English Language At Home: Much Of The Growth In ESL Enrollment Is Directly Related To Growth In

Local Employment

27.6%30.5%30.6%

31.6%32.8%

36.6%37.3%37.5%

43.4%18.7%

11.0%9.8%

3.0%

0% 10% 20% 30% 40% 50%

Westbrook-Walnut GroveSleepy Eye

MinneapolisColumbia Heights

Pelican RapidsBrooklyn Center

RichfieldWorthington

St. PaulNational 03State 06-07State 04-05State 93-94

Percent of Students in 2006-07

Source: Mn Dept of Education data, Districts of more than 100 enrollment.

From 2005 to 2015, Largest Growth in Minnesota Will Be in Ages 55 to 69

16,2003,9006,700

44,50098,000

119,400107,200

55,500-43,400

-64,100-700

67,20051,800

-9,600-29,200

7,40049,100

37,600

85+80-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Source: Minnesota State Demographic CenterNumbers are rounded

Minnesota Will See a 30 Percent Jump in Workers Turning Age 62 Beginning 2008

0

10,000

20,000

30,000

40,000

50,000

60,000

7/05 to7/06

7/06 to7/07

7/07 to7/08

7/08 to7/09

7/09 to7/10

7/10 to7/11

7/11 to7/12

Year Turning Age 62

Wo

rke

d W

ith

in P

as

t 5

ye

ars

2005 ACS

Competition For The Future Workforce Will Increase

6.8%

4.5%

-1.6%-2.2%

13.0%

-1.2%

-3.5% -3.0%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2000-05 2005-10 2010-15 2015-20

Per

cen

t C

han

ge

18-2

4 US

Mn

Census Bureau US Proj, Mn State Demographer revised 2007

Projected Openings In Minnesota Occupations 2006-16

0%5%

10%15%20%25%30%35%40%45%50%

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Replacement

Growth

DEED projections. Percent of 2006 level

Migration Will Become the Largest Source of New Workers in Minnesota

-100,000

0

100,000

200,000

300,000

400,000

500,000

2000-10 2010-20 2020-30

Total Natural Partic. Rate Migration

Net Labor Force Growth

Percent of Mn Labor Force Born In Another Country

3.3%

8.5%

12.6%

3.1%3.6%

4.8%

0%

2%

4%

6%

8%

10%

12%

14%

1990 2000 2006

25-34

55-64

PUMS microdata from 1990 & 2000 Census & 2006 ACS

Thoughts On Economic Theory

Economic growth depends on

Growth in the workforce

Growth in productivity per worker

Productivity per worker depends on

Technology and machines

Public infrastructure

Knowledge, skills, training and education

High School Graduation Rates In Minnesota Have Drifted Downward And Are Lower For

Males And Minorities

89%92%

67%

78%

87%

92%

62%

72%

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

White Male White Female Minority Male MinorityFemale

1990-93

2003-06

Three year averages of 10th grade graduation rate.

Median Earnings For Minnesota Workers By Education & Age

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

25-29 30-34 35-39 40-44 45-49

<High SchoolHigh SchoolSome CollegeBachelors+

2006 ACS

And, In Conclusion

• Minnesota has been very successful

• We are in a period of rapid and critical change

• Demographic forces will shape our future for the next quarter century

• Aging and slower labor force growth encourages migration and immigration

• Slower labor force growth heightens importance of productivity growth