What will Wisconsin look like in 2040? That is a question state demographers ask as they help the state prepare for changes that may come as the population of Wisconsin changes.
To prepare for the future, we need to ask questions about how the aging baby boom generation will impact state revenue and expenses and what factors influence why and when people move in and out of the state. Additional questions about the available workforce and school enrollment help shape our plans.
One of the first things that analysts look at is population growth. During the 1950s, at the height of the baby boom, Wisconsin’s population increased about 1.4 percent each year. This growth did not last. By the 1980s, population growth averaged 0.4 percent each year.
Fast forward to the first decade of the new millennium and the growth rate was still fairly low, coming in at 0.6 percent each year. Looking ahead, demographers predict more of the same.
In fact, between 2035 and 2040, the state’s population is only expected to increase 0.2 percent or 0.05 percent annually.
In total, the state’s population is expected to grow 14 percent in the 30 years prior to 2040. To put that growth in perspective, the state’s population grew by that same amount in the 18 years prior to 2010.
In addition to the natural population changes caused by comparing the number of births to the number of deaths, demographers also look at migration patterns. Who moves out of the state and why? Who moves into the state? Why do they come?
People tend to leave the state when there are not enough jobs. This happened in the 1980s and again during the most recent recession. Conversely, they come to the state when there are available jobs, as happened in the 1990s.
Jobs are not the only reason people move. Evidence shows that more people in their 60s and 70s move out of the state than move in. We do not know the exact reason they leave, but I bet that most of us have friends or relatives of that age who have left to escape the cold weather or because of taxes.
We also know that the state loses more young adults than we bring in. On the other hand, more people in their 30s and 40s with children move to Wisconsin than leave the state because of the quality of the schools and access to family-friendly public spaces.
Wisconsin also attracts people in their 80s, possibly because they want to be closer to their families or because of quality health care that is available here.
The next thing to look at is the expected age of the population in the future. In 2030, the state expects 28 percent of the population to be over the age of 60. The working age population, those people between 20 and 64 is expected to decline very slightly between 2010 and 2040.
This is an important figure because it will be difficult to increase economic output, or create new jobs, if there are not workers. Of course, a higher percentage of working-age people could enter the workforce, older workers could continue to work or workers could move to Wisconsin for jobs.
In addition to concerns about what an aging population means for the workforce and job creation, there is also a potential impact on state and local finances. The state’s population of senior citizens is expected to nearly double by 2040.
In 2010, there were 23 seniors for every 100 working-age adults. In 30 years, there will be 45 senior citizens for every 100 working-age adults. Senior citizens tend to purchase fewer taxable goods, while a greater percentage of their spending goes to food, drugs and services, which are often not taxable. That means less sales tax revenue. Since Wisconsin does not tax Social Security income, as the population ages, the state could expect to see less income-tax revenue.
These demographic predictions provide a road map of what we need to do to make Wisconsin’s economy strong. As the population ages, we will need to focus on ways to encourage people and businesses to locate in Wisconsin.