Conversations with @adamcarstens, @BurghDiaspora, @petesaunders3, and others in recent weeks have crystallized a lot of the demographics thoughts that have been jumbling around in my head and have made their way sporadically into tweets. Here’s my dump of these thoughts:
1940’s-mid 2000’s: Entering the 1940’s, America was a country on the verge of a huge demographic transformation. While the country was urbanizing, much of that change had been put on hold by the Great Depression and World War II. The South was still largely agrarian. The North was industrial, with its cities anchored by manufacturing. Blacks and whites lived apart. The country’s infrastructure had not yet been shaped for cars like it would be in the decades to come. Here’s what happened:
As the Greatest Generation returned from the war, it kicked off the baby boom. Crowding in cities brought blacks in closer proximity to whites, creating tensions that other macro factors — the movement of manufacturing to the suburbs, then overseas, plus the growth of cars and highways — led to the growth of suburbia. Air conditioning facilitated the growth of the Sunbelt. College education became a mainstream good, which led some cities (Boston, New York, Chicago, San Francisco) to transition from manufacturing to information-based economies. The busting of American urban manufacturing created hardship for the Rust Belt and other cities that previously relied on that industry for employment. In general, it was a period of geographic expansion [the post-1990 Sunbelt, financed by Wall Street, built by Hispanics], with highways, cheap oil, and a labor glut from the Baby Boomer generation powering growth. Manufacturing-based cities and urban blacks were the big losers while the educated, those employed in finance and tech, and suburban and Sunbelt whites were the big winners.
Post-2010: The epicenter of the 2006-09 housing bust was in the subprime, Sunbelt exurb. The areas that have roared back the strongest are tied to high tech, the most-educated Millennials, and the global super-rich. We hear a lot about walkability, transit, and mixed-use too. But what are the huge demographic trends that will shape the next several decades and are different from what have come before?
-White stagnation: If your model relies on young [non-Mormon] whites or white households you’re in trouble. These are no-growth areas for as far as the eye can see. It doesn’t mean you can’t survive, but you’ll have to adapt. I’m looking at you, New England, higher education, and the Republican Party.
-Lack of transportation infrastructure growth, and hence lack of geographic footprint expansion: some cities will do some things here and there, but it’ll be at least another decade until liberal, transit/infrastructure-supportive Millennials are in electoral positions of power to do things here. For at least the next 10 years, it’s unlikely that we’ll be expanding the boundaries of our major metro areas beyond where they already are.
-The new cultural Baby Boomers — educated Hispanics: Forget the ’60s culture war part of the Baby Boomers. What characterizes Baby Boomers? They got an education where their parents didn’t. They had a lot fewer kids than their parents did. They had much higher incomes than their parents did. And there are a lot of them. This is a good description of current Hispanic kids. If your growth relied on young, educated, materialistic whites, this is your best hope to plug your demographic gap. Again, I’m looking at you New England, higher education, and the Republican Party.
-Labor scarcity: I wish you could see this the way I see it. I don’t think any of us fully appreciate how big of a deal this is going to be. Birthrates are plummeting around the globe. By the time we need to build 1.5-2 million houses again it’s not clear where we’re going to find the workers to build the houses. The Hispanic-American and Mexican birthrates have plummeted. Educational attainment is surging. Can we find Asians to build houses? Africans? Both continents may be doing their own major building projects over the next few decades. The loss of the Baby Boomers from the workforce will impact some geographies and sectors more than others. Large corporations in particular appear to be at risk. AT&T has 250,000 employees. Say the average employee tenure is 8 years. That means that every year they have to replace 30,000 employees. In a talent-starved economy that’s a liability. If you’re a company, smaller and younger is better, but we’ll have to think about tactics to encourage either employee stability or business models that remain robust if key employees leave.
Anyway, that’s what I’ve got for now.