1. Minnesota and the New Normal
Tom Gillaspy, State Demographer
March 2012

2. Minnesota Population Growth
• Minnesota added 384,446 people or 7.8% from 2000 to 2010
• Minnesota’s 2010 population is 5,303,925
• Minnesota and South Dakota (7.9%) led the frost belt in
percent population growth
• Minnesota ranked 26th in percent change and 21st in number
change
• Texas added 4.3 million and Nevada 35.1% to lead the
nation
• Minority population growth accounted for two thirds of
total growth 2000-10. Percent minority population
increased from 11.7% in 2000 to 17% in 2010

3. Population Change 2000-10 Of
Minnesota Metropolitan Areas
2010 Census, Minnesota portions of metro areas only

5. Change In Households Adjusted to 2010 Census
And 2011 Building Permits
Census reported building permits times occupancy and PPH at 2010 level yields 8500 in 2011

6. Suburban And Exurban Growth Has
Slowed Dramatically
Census estimate adjusted to 2010 Census

7. Is Exurbanization Over?
• An aging population may want a smaller
house more conveniently located
• The Millennial Generation may have a
dramatically different housing preference
• Rising fuel prices may change housing location
and characteristics

8. Percent Of Americans Preferring To Live In a City
(versus suburbs or rural/small town) By Age
National Association Of Realtors, 2011 Community Preference Survey

9. We Are Headed to a New Normal
• The Great Recession Is over, but we will not
return to where we were
• We are moving to a New Normal
• Minnesota is not alone—this a global
phenomenon
• Those who recognize this and adapt first will
be most successful
• The next four years will be critical to
Minnesota’s future

10. Unemployment Rate—Minnesota Is
Recovering Faster Than The Nation
5.7% v 8.5% in December 2011
Mn DEED

11. Increases in Minnesota’s 65+ Population
A Major Contributor To the Fiscal Trap
400,000
350,000
300,000
e
g
n
a
h
C
250,000
200,000
150,000
100,000
50,000
0
70s 80s 90s 00s 10s 20s 30s
Decade

12. Most Minnesota Household Growth 2010-20 Will Be
Older Empty Nesters And Older Living Alone
By 2020, empty nesters will be the largest type of family
Minnesota State Demographic Center projection

13. Projected Average Annual Growth 2010-20 In
Selected Disabilities--Minnesota
2.0%
1.8%
1.6%
1.4%
1.2%
1.0%
0.8%
0.6%
0.4%
0.2%
0.0%
Total Self Care Dis Hearing Dis Vision Dis Ambulatory Cognative
Population

14. Health Care Spending Jumps After 55
U.S. Health Care Spending By Age, 2004
$12,000
$9,914
$10,000 $9,017
$8,000
$6,694
$6,000
$4,000 $3,496 $3,571
$2,747
$1,855 $2,165
$2,000 $1,074 $1,445
$0
<5
14
+
4
4
4
4
4
4
ge
75
-3
-4
-5
-6
-7
-2
5-
ra
15
25
35
45
55
65
e
Source: Agency for HealthCare Research and Quality, Medical Expenditure Panel Survey,
Av
data for per capita spending by age group in the Midwest. Excludes spending for long-term care
institutions.

15. Annual Percent Change Minnesota
Total Labor Force
Revised January 2012

16. Some Other Considerations In The Labor
Market
• More retirees and fewer younger workers should
improve opportunities for job seekers
• But employers may respond in other ways
1. Increase focus on productivity gains, filling jobs on
less than a one-for-one basis
2. Relocate jobs to other, more favorable labor
markets
3. Recruit workers from other markets
• Alternative responses may be heightened with a
growing skills mismatch.

17. There Are Only Two Ways An
Economy Grows
1. Increase the number of people making
stuff (and services)—labor force
growth
2. Increase the amount of stuff (and
services) each person makes—Per
worker productivity
With slowing labor force growth,
productivity will need to increase
rapidly to maintain economic growth

18. Overall US Economic Growth Slows As
Labor Force Growth Slows
US BEA, McKinsey Global Institute, We will need a 2.3% annual increase in productivity just to reach
our 20 year average growth of 2.8%

19. Total Fertility Rate Of Selected
Countries 2009
United Nations Population Division, 2.1 is the critical rate below which aging begins

20. The “New Normal” Probably Means
• Slower economic growth
• Labor and talent will be the scarce resources
• A single-minded focus on productivity
• Chronic government deficits & cuts in service
• Worries about how to pay for past promises
• Disruptive events/innovations more frequent
• A whole new set of opportunities

21. Three Possible Government
Responses To The “New Normal”
1. Cut government programs—not just
“theirs” but also “yours”
2. Increase taxes--not just “theirs” but
also “yours”
3. Increase productivity in both the
private and public sectors

22. Productivity Is Not Just Making Things
Cheaper
• Productivity is also
– Making things better—Quality
Examples; Increased high school graduation rate,
reduced recidivism rates
– Making better things—Innovation
Examples; new approaches to volunteerism, adapting
new technologies for service delivery
The pressure for disruptive innovation is
increasing

23. 3 R’s of Opportunity
• Restructure government costs
• Replace retiring government workers wisely
• Re-engage the growing retiree population

24. The Fiscal Catch-22
If we don’t make the necessary public
investments in human capital, research and
infrastructure, then we won’t have the
productivity gains needed to provide the
resources to make those investments in the
future and pay for the promises we have
made.

25. “I skate to where the puck will be,
not to where it has been.”
Wayne Gretzky
Famous Canadian Philosopher