Editor’s Note: This column is sponsored by the AARP Public Policy Institute. Thought Leadership drives the creation of a marketplace for new ideas by advancing emerging issues, challenges the status quo and inspires new solutions that empower people around the world to make the most of a longer and healthier life.
We are all weathering three major crises. A global pandemic has infected more than 6.5 million Americans and caused more than 200,000 deaths, and those numbers continue to rise. In recent months, we’ve also experienced a major economic shock, with GDP falling at a 31.7 percent annualized rate—the steepest decline since 1947, when record-keeping on this measure began. To make matters worse, we have borne witness, and continue to do so, to the chronic and systemic issues of racial injustice in this country.
Those of us who remain employed throughout the pandemic will be among the fortunate, particularly in the absence of a robust national response, and with the country suffering through the starts and stops of piecemeal state reopenings that are sometimes followed by partial pullbacks on those attempts. Certain industries and sectors have been gutted to the point where some companies and jobs may never return.
Yet against the backdrop of a sobering year, there is some encouraging news. The source of that news may come as a surprise, as states face immediate and unprecedented economic challenges due to the coronavirus pandemic, but the growing aging population will serve as a powerful driver of economic growth in the recovery.
A new AARP research report makes clear that the power of the ages 50 and older population to drive economic growth and make other positive contributions to society is immense. “Longevity Economy State Profile,” part of AARP’s Longevity Economy outlook series, examines the economic and societal contributions of people ages 50 and older across 50 states and the District of Colombia.
Numbers Tell the Story
A key objective of the report is to provide the most up-to-date picture of the role that the ages 50 and older population will play in driving economic growth and recovery in the decades ahead. Accordingly, the Longevity Economy State Profile accounts for the effects of COVID-19 on U.S. demographic and economic projections. The analysis was informed by data from the Centers for Disease Control and Prevention, Bureau of Economic Analysis, Bureau of Labor Statistics and the Economist Intelligence Unit’s macroeconomic forecasts.
Here are five insights from the new research of which we should all be aware—particularly anyone who might overlook the economic value of those ages 50 and older:
An economically powerful demographic is growing: the population is aging and living longer. By 2050, 41 states will have populations where at least 40 percent of their residents are ages 50 and older, compared to just five states in 2018. The ages 50 and older population is a powerful driver of economic and societal activities, and its impact will increase as its share of the population grows.
States with the oldest populations will experience the largest economic growth. In 2050, the impact of the ages 50 and older demographic will account for more than 50 percent of state-level GDP in Florida and Maine.
The ages 50 and older cohort plays a central role in supporting families and communities. Beyond their economic contributions, people ages 50 and older devotes vast numbers of hours to vital unpaid activities, such as volunteering and caregiving for children and adults. In 2018, people ages 50 and older spent, on average, about 488 hours on unpaid activities—that’s roughly 9 hours per week per person. The average value of that time in 2018, per person, was about $6,440.
The ages 50 and older population contributes a significant share of state and local tax revenue. In 2018, people ages 50 and older supported more than 40 percent of state and local taxes in 12 states (Maine, Vermont, Florida, New Hampshire, West Virginia, Hawaii, Delaware, Connecticut, Montana, Rhode Island, Pennsylvania and Massachusetts). And by 2050 that number will increase to 46 states.
The ages 50 and older population is driving a disproportionately high share of total consumer spending. People ages 50 and older in coastal regions—including the Pacific, the mid-Atlantic and New England—spent the most on housing and utilities, while ages 50 and older individuals living in central-region states led spending on healthcare. Technology spending by people ages 50 and older is set to rise from $140 billion in 2018 to $645 billion by 2050.
Benefits Await, Action Required
People ages 50 and older are consumers, taxpayers, workers, business owners, volunteers and family caregivers. Their contributions, already massive, only stand to grow. But to maximize the longevity dividend and create opportunity for all, we must act now. Policymakers, private industry leaders, elected officials and those interested in working in the longevity marketplace must play important roles in helping to harness this high-potential economic engine.
We must all work together to assess and advance new approaches to learning, earning, living and connecting with one another as we live longer lives. Older adults will continue to be a key driver of economic growth and recovery in this country for decades to come. By leveraging the asset that is the aging population in this era of unprecedented change and uncertainty, we can create economic growth and societal benefits—now and for the future.
Jean C. Accius, PhD, is senior vice president of Global Thought Leadership at AARP, in Washington, D.C., and serves on ASA’s Board of Directors. Joo Yeoun Suh, PhD, is director, Thought Leadership-Longevity Economy, at AARP.