Social Policy
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Census Bureau Projections Suggest Ethnic Shift
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The U.S. population will increase by 50 percent between 1995 and
the year 2050, according to a report being released by the Census
Department. And the increase will be greatest among Hispanic
peoples, due to immigration and higher birth rates.
Among the Bureau's projections:
- By 2050, only 53 percent of the U.S. population will be non-Hispanic
whites -- down from 74 percent today.
- Hispanic people will make up 24.5 percent of the population,
up from the current 10.2 percent.
- Asians will make up 8.2 percent, and increase from the current
3.3 percent.
- The black population will rise to about 13.6 percent from
today's 12 percent.
- Overall, the entire population will rise to about 394 million
from the current 262 million.
Nevertheless, after 2025 the U.S. is expected to experience a
sharp decrease in population growth as birth rates decline and
there are an increasing number of deaths as the population ages.
The report raises a number of economic, political and social policy
issues. For example, by 2030 the non-Hispanic white population
will make up less than half the people under age 18, but three-fourths
of those over 65. Questions have been raised concerning the commitment
of somewhat poorer Hispanics to pay for benefits to relatively
well-off aging white baby boomers.
The report is also likely to sharpen the immigration debate.
The report's population growth projections are based on an annual
net increase of 820,000 legal and illegal immigrants. Democrats
and Republicans alike want to reduce legal immigration by one-third
and curtail illegal immigration. As the director of one private
immigration reform group asked, "Do we really want another
100 million people?"
Source: Steven A. Holmes, "Census Sees a Profound Ethnic
Shift in U.S." New York Times, March 14, 1996.
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U.S. Urban Areas Lose Population
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In the next several years, the world will pass a historic milestone: more
than half of its population -- or more than 3 billion people -- will live
in cities.
- At the turn of the century, only 14 percent of the Earth's population
called cities home -- and just 11 centers on the planet had more than one
million inhabitants.
- Now there are 400 cities with populations of at least one million,
and 20 megacities with populations exceeding 10 million.
While others are flocking to cities, Americans are making doughnut shapes
out of theirs: emptiness at the center and growth on the edges.
Though some cities are still thriving, of the 25 largest U. S. cities in
1950, 18 have lost population.
From 1950 to 1990:
- Baltimore lost 22 percent of its population.
- Philadelphia, 23 percent; Chicago 25 percent; Boston, 28 percent.
- Detroit and Cleveland fared even worse, losing 44 and 45 percent respectively.
During the same period, the suburbs gained more than 75 million people.
In 1990, our nation became the first in history to have more suburbanites
than city and rural dwellers combined.
Source: Kenneth T. Jackson {Columbia University), "America's Rush
to Suburbia," New York Times, June 9, 1996.
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Rural America Experiences Population Growth
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In a historic reversal, Americans are moving back to the country. New research
by two prominent rural demographers finds that most rural areas of the country
are growing at their fastest rate in more than two decades.
Kenneth M. Johnson of Loyola University and Calvin L. Beale of the U. S.
Department of Agriculture have found "widespread and substantial"
gains in rural population between 1990 and 1995.
- Some three-quarters of the United States' 2,304 rural counties are
growing -- up from 45 percent in the l980s.
- Rural areas have experienced a 5.1 percent population increase in
the past five years -- a sharp reversal from the 1980s.
- Although metropolitan areas have had a 5.8 percent increase over the
same period, the gap has shrunk considerably from the 1980s when metropolitan
areas were increasing four times faster than rural ones.
Using Census Bureau data, the researchers found the greatest growth in counties
that are attracting retirees and others in search of recreation such as
those in the Western mountains, Upper Great Lakes, the Ozarks and other
parts of the South.
Some rural migrants maintain their jobs in nearby cities by commuting and
telecommuting. Some 90 percent of counties with a large portion of commuters
are growing. Jobs are also growing in rural areas as manufacturers relocate
plants there -- citing an 'anti-business climate" in some cities.
But the migration is not without its conflicts: one Michigan rural area
is fighting the proposed expansion of a highway, and in Iowa "hog odor"
is a hot topic.
Source: Scott Kilman and Robert L. Rose, "Population of Rural America
is Swelling," Wall Street Journal, June 21, 1996.
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Implications of an Aging U.S. Citizenry
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We as a society are growing older and that fact has dramatic policy
implications -- not the least for the future of Medicare and Social
Security.
- In 1970, children under 18 outnumbered adults 50 and over
by 70 million to 50 million.
- By 2010, there are expected to be 96 million Americans 50
and above, versus 74 million youth.
- By 2030, 70.2 million Americans will be 65 or older -- one
out of every five of us.
Yet Medicare is projected to go bankrupt by 2001 unless it is
changed. And Social Security will start running deficits by 2013
and go bankrupt by 2029.
The fact that women live longer than men suggests other implications:
- Among those aged 85 or older, women outnumber men 5 to 2.
- Thus, elderly men are nearly twice as likely to be married
and living with their spouse.
- Elderly women are nearly three times as likely to be widowed
as male seniors.
Then there are demographic considerations:
- About half of all seniors live in just nine states -- California,
Florida, New York, Pennsylvania, Texas, Ohio, Illinois, Michigan
and New Jersey.
- California has the greatest number of seniors -- 3.3 million
-- and Florida the highest percentage 65 or older, one in five.
Lengthening life-spans also suggests societal changes:
- Only one percent of those 65 to 74 live in nursing homes.
- But 6 percent of those 75 to 84 do; and 25 percent over 85
do.
How financially well-off are seniors?
- The poverty rate for those under 65 has increased slightly
since 1966 from 10.5 percent to 11.9.
- But it has plunged for those 65 and up from 28.5 percent to
11.7 percent.
- Median household wealth for homes headed by seniors is about
$90,000 compared to $40,000 for the population as a whole.
Statistics show that the better educated a person is, the more
likely he is to be healthy and better-off financially. Today's
aged generally are not that well educated compared to younger
people. The elderly are less than half as likely as younger adults
to have a college degree.
So it is conceivable that as today's younger generations age,
they will be able to take greater responsibility for themselves
physically and financially.
Source: Charles Oliver, "More and More Senior Citizens,"
Investor's Business Daily, January 30, 1996.
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Consumers Reverse Investment Priorities
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In 1995, stock equity exceeded home equity for the first time
since the early 1970s, according to Federal Reserve data. To
the Clinton administration, this could be one more reason to tinker
around in the housing market and use government to boost homeownership.
But economists say that is unnecessary and would be counter-productive:
funds are being directed to their best use -- which recently
has been stocks.
- As recently as 1990, home equity -- home value minus mortgages
and other liabilities -- totaled $3.6 trillion, with stocks' value
well behind at $2.2 trillion.
- Housing prices have risen in recent years, but at lower rates
than during the 1970s and early 1980s, according to Harvard's
Joint Center for Housing Studies.
- Homeowners enjoyed an average after-tax appreciation of $2,177
in home value in 1994, compared to an increase of $7,400 during
the inflation-rampant years from 1977 to 1981.
- From 1976 to 1980, the median sales price of an existing home
rose from $38,100 to $62,200 -- a jump of 63.3 percent.
- This compares with the 1991-95 increase of $100,300 to $112,900
-- or 12.6 percent.
While home prices have been pacing inflation in recent years,
gains in the stock market have far outpaced inflation. From 1990
to the present, the Dow Jones industrial average has doubled;
whereas the consumer price index rose just 19 percent.
Some analysts believe the current boom in individual participation
in the stock market and phenomenal purchases of mutual fund shares
are a result of baby-boomers and even younger generations realizing
that Social Security is a weak reed to depend upon for retirement.
Many are taking responsibility for their old-age needs by flocking
to stocks.
Failing to understand this reversal of investment priorities,
some in government want to accelerate housing investment.
- The Secretary of Housing and Urban Development wants to boost
the urban homeownership rate.
- President Clinton has a goal of creating up to eight million
new homeowners by the end of the decade -- bringing the rate up
to 67.5 percent from the present 64 percent to 65 percent.
But others caution against using federal policy to direct distribution
of resources, whether to promote housing or any other asset.
Source: Carl Horowitz, "Do We Need to Boost Housing?"
Investor's Business Daily, May 10, 1996.
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