Labor shortage coming, Taxpayers Alliance says Last Updated: Aug. 31, 2002 Amy Rinard E-MAIL | ARCHIVE Anew report on the changing demographics of Wisconsin shows that in 10 or 20 years there will be far fewer people in the state celebrating Labor Day with a welcome day off work. That's because there will be far fewer people working. The baby boomers will be retired. And, because of lower birth rates in recent decades, there will be fewer people taking their place in the work force, according to the statistics compiled by the non-profit, non-partisan tax watchdog group Wisconsin Taxpayers Alliance. This phenomenon will have a huge impact on the state's economy and on state revenue in the near future. There will be a labor shortage. Growth in state income and sales tax revenue, which fuel state spending, will slow. And the state will have to spend more on programs, including Medicaid and the new prescription drug plan SeniorCare, as the ranks of Wisconsin senior citizens grow. It all adds up to yet another reason the next Legislature and the next governor must act to resolve Wisconsin's budget mess and get state finances on track to meet the challenges that are surely coming. Some say the future doesn't look that good. "These numbers aren't going away," said Todd Berry, Taxpayers Alliance president, of the demographic projections and their consequences. In 2000, the state population was 5.36 million, of which 703,000 were age 65 or older. In the next 10 years, the number of Wisconsinites over 65 is expected to rise 8.4%. Between 2010 and 2020, it will rise 33.3% and in the following decade increase another 30.8%. According to state estimates, by 2030 there will be 1.33 million Wisconsin residents age 65 or older. That's an increase of 88.9% from 2000. In 2000, 13.1% of the state's population was age 65 or older. That percentage is expected to rise slightly to 13.4% by 2010. Then it is expected to increase rapidly, reaching 16.8% in 2020. In the suburban counties of southeastern Wisconsin, the percentage of seniors in 2000 was slightly below the statewide percentage, according to U.S. Census figures. In Waukesha County, 12% of the population was 65 or older; in Ozaukee County, 12.6%; Washington County, 11.2%; and Racine County, 12.3%. People now between the ages of 45 and 64 made up about a quarter of the population in each of those counties in 2000. The percentage of the counties' population between the ages of 25 and 44 was about 30% in each of the four suburban counties. But the percentage of those moving into the workplace in 2000 was in the single digits in each county: Waukesha County, 6.8%; Ozaukee County, 6.8%; Washington County, 7.2%; and Racine County, 8.3%. Asked whether the impending consequences of the aging of Wisconsin will be felt as hard in the state's economic engine of southeastern Wisconsin as in the state as a whole, Berry replied: "That's a good question." "In the suburbs, I suspect, it will depend on the area," he said. "Some neighborhoods are empty-nesting and some are turning over with younger families with young children moving in. It will be less of a problem where the average age of the population is lower." Even if southeastern Wisconsin can attract more young people to put down roots here than other parts of the state, its larger labor market will demand more workers and the area still could end up with a labor shortage. "There will be parts of the state that fare better or worse, but overall around the state we won't be replacing workers," Berry said. Wisconsin's birthrate has declined since 1980, falling to 14.8% in 1990 and 12.7% in 2000. In 2000, the number of births in Wisconsin was only slightly greater than it was in 1976. By contrast, births nationally increased 128% since 1976. Berry notes that this convergence of demographic trends - with more retirees moving out of the work force at the same time low birthrates mean fewer workers replacing them - is more pronounced in Wisconsin than in many other states, including Illinois. "Overall, looking across the country, we do have a problem compared with other states," he said. The increase in the number of retirees in Wisconsin will have a significant impact on the state's finances. The average household income for retirees is less than half that of the 25 to 64 age group, based on national statistics. Income tax revenue provides more than half of the state's general purpose revenue used to pay for the bulk of all spending in the state budget. "An increase in retirees will adversely affect income tax revenue, placing more of the tax burden on a proportionally smaller working population," said the Taxpayers Alliance report. As this year's campaign season progressed, Berry said his organization issued this report and others in an effort to raise the level of awareness of the real issues that will affect the state's future. "We felt there was a need to focus public discussion on six or seven major economic issues facing the state," he said. "So far, the focus is tending to be scandal and gotcha in the campaigns. But these are fundamental issues that aren't going to go away. Demographics is a perfect example of something no one is talking about." Appeared in the Milwaukee Journal Sentinel on Sept. 1, 2002. Amy Rinard Archive Talking trash: Has state had its fill? (9/24/05) Study shows it's true: State income taxes really are high (9/17/05) GOP hopefuls agree to agree on most issues (9/3/05) Doyle counting on community restraint (8/21/05) Waukesha County Democrats building bigger phone booth (8/13/05) Regrets won't make cultural district issue go away (8/6/05) Doyle, legislators collide on Zoo Interchange (7/30/05) Towns see turning village as way to go (7/23/05) Getting a bigger glass for out-of-state wines (7/16/05) Dueling over freeway studies has partisan undertones (6/25/05) More ... Contacting Amy Rinard Call Amy Rinard at 262-650-3184 or e-mail: arinard@onwis.com BACK TO TOP News | Business | Sports | Entertainment | Classifieds | Jobs | Wheels | Homes | Rentals XML/RSS News Feeds (What's this?) | JSO Wireless © 2005, Journal Sentinel Inc. All rights reserved. | Produced by Journal Interactive | Privacy Policy Journal Sentinel Inc. is a subsidiary of Journal Communications.