June 23, 2013

Charles Lawton: A demographic meteorite is aimed at Maine

The not-yet-finished legislative session in Augusta promises to be but the opening scene of a drama that we will see played out for years to come. From the rush to use drinking to pay for health care to the now-you-see-it, now-you-don't status of revenue sharing; from the quiet, bipartisan efforts to restructure our tax system to the crude obscenities shouted at pep rallies outside the governor's office, we have seen but an introduction to the characters and themes that will strut and fret on our stage for the foreseeable future.

Maine has crossed a turning point, a threshold, a demographic and geographic divide whose implications we are only now beginning to understand but whose fingerprints are all over the characters and scripts we have seen and heard so loudly in Augusta.

Consider one simple measure, what demographers and economists call the dependency ratio:

Add the population under the age of 18 to the population over the age of 65. Take that figure -- about 485,000 people, according to the last census -- and divide by the number of people between 18 and 65 -- about 843,000 people. That gives you the dependency ratio -- 58 percent in 2010 for Maine as a whole. We had 58 "young" and "old" people for every 100 "working age" people.

Now think about how that ratio has changed in the recent past and is likely to change in the future, both for Maine as a whole and for various places in Maine. The chart nearby illustrates the not-so-pretty picture.

This chart shows clearly that 2010 marks a turning point, for Maine and, even more clearly, for the rural and small town areas of the state.

Between 2000 and 2010, the dependency ratio fell because the number of people passing the 18-year-old threshold to enter the "working age" category more than offset the number passing the 65-plus threshold to leave the "working age" category.

But that "pressure relief valve" has now been exhausted. Looking forward to 2030, the number of people passing the 65-plus threshold will rise inexorably, pulling the dependency ratio with it -- to 69 percent in 2020 and to 83 percent in 2030.

The fiscal (not to mention drinking, shopping and income earning) challenge to the 100 "working" people, daunting enough today to "support" 58 people, will be even greater tomorrow to support 83.

And, using Piscataquis County and Greenville as examples of Maine's rural areas, it is obvious that the generational divide is creating an equally stark geographic divide.

Just a decade ago, there were 20 percent more "young" people in Greenville than "old" people. If current trends continue, by 2030, "old" people will outnumber "young" people by more than 3 to 1.

Other than moving basketball games to the Senior Center and Zumba classes to the high school gym, the policy response to these trends is unclear. And it is precisely this lack of clarity that makes the three-ring melodrama now playing in Augusta so disheartening.

Yes, life may be good here now. But life goes on. And what is coming toward us down the road looks anything but good.

Charles Lawton is chief economist for Planning Decisions Inc. He can be reached at:

clawton@planningdecisions.com

 

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