Master Project summary and article published by PM Magazine

1. Does Age Matter?
Local Governments in the
Post–Baby Boom Era
by Todd Tucker
I
n the United States today, approximately 12 percent of the population is over
the age of 65. By 2010, 10,000 Americans will turn 65 every day. U.S. Census
Bureau mid-range estimates for the year 203 percent of the U.S. population will
be 65 years of age or older. This projection is likely underestimated, however,
because of the population’s increased longevity.
1
This ballooning population of eligible retirees will result in service changes
across the nation. Although it is generally understood that demographic changes
will create an increased demand for aging services, there is greater uncertainty
about how an aging population might affect local governments. This article, which
reflects the results of a research project conducted at the University of Colorado
in 2006 titled Local Government in the Post-Baby Boom Era, presents the potential
effects of an aging population on county governments along the Front Range of
Colorado.
Variables of aging
Five indicators were measured to determine the potential impact of the aging
population: (1) the percentage of elderly individuals as part of the population pro-
jected to the year 2030, (2) the percentage of the county government workforce
eligible for retirement, (3) the anticipated service demand by county department
or division, (4) the anticipated level of attrition for the county government work-
force by department or division, and (5) employee training, development, and re-
cruitment programs and priorities.
18 Public Management  May 2007

2. After assessment of these indica-
Figure 1. Percentage of Population Age 65 and Older for
tors, it was determined that rural
Selected Populations, 2002, 2010, 2020, and 2030
counties will experience the greatest
change in age distribution and, con-
sequently, the greatest challenges in
meeting service and labor demands
(see Figure 1). These projections are
due to the expected percentage of
elderly, a low or negative rate of popu-
lation growth, increased longevity, a
limited population pool to draw from,
and a trend for the aging and elderly
to remain in their existing homes as
long as possible. Also, rural counties
do not always provide their employ-
ees with adequate development op-
portunities to prepare them for the
challenges of the future. These rural
counties, however, are not alone.
The Colorado example
Currently, most counties in Colorado
have an elderly population that con-
stitutes less than 10 percent of the Source: U.S. Census Bureau, 2005.
population. By 2030, however, the Note: Projections 2010 through 2030 assume the 2001–2004 rate of population
average percentage of elderly within change remains constant and mortality at 85 yeas of age.
the 10 counties along the Front Range
that were studied will be nearly dou-
ble the U.S. census national estimate could well be low. Similar projections starting to affect other labor sectors
of 20 percent. In some instances, as also indicate that the census mortality across the nation.
much as 55 percent of the county estimates for those aged 65 and older Labor shortages and increased ser-
population will be age 65 or older. are high. vice demands are expected in five and
The implication of a change from While there are advantages to 10 years by several Colorado counties
10 percent to 30 to 55 percent of a continued growth and an increasing in a variety of service sectors, includ-
county population over the age of population of retirees, there will also ing aging services, social services,
65 is significant, particularly in rural be challenges for local governments law enforcement, public works, and
counties with small and dispersed and businesses, including potential fire (see Figure 2). The study (Clark,
populations, such as Clear Creek increases in demands for services for 2004) prepared for NACo also found
County, Colorado. For counties that the elderly, shortages of skilled la- that 50 percent of the local govern-
are experiencing a high rate of popu- bor, and reductions in revenues and ment workforce is potentially eligible
lation growth, such as in parts of Weld federal funding assistance for local for retirement. Furthermore, few lo-
County, Colorado, the impacts of an governments. cal governments indicated that they
aging constituency and nation may be Projections of increased demand provide any training, development,
less dramatic because younger people and a shortage of labor have already retention, or recruitment programs
have been the primary driver of con- begun to appear in the United States. for their more junior employees.
tinued growth, but even fast-growing While working on a 2004 research Although not the focus of this
counties will experience challenges project for the National Association Colorado case study, it was observed
related to service increases for the el- of Counties (NACo), a study team that global shifts in demographics
derly and worker shortages. found that several counties anticipate will also affect the revenue stream for
Furthermore, high rates of popu- increased demand as a result of an the federal government in the United
lation growth may not result in a aging constituency and increased States, which will result in funding
balance in the age distribution in attrition caused by an aging work- reductions for local governments. In
Colorado counties because Colorado force. Local governments are al-
3
other words, as the global population
is a destination for mobile retirees. 2
ready experiencing labor shortages ages, particularly in the industrialized
Thus, projections for the percentage in health care, education, and law nations of North America, Europe,
of elderly for all counties in Colorado enforcement, and these shortages are and much of Asia, global production
ICMA.org/pm Public Management  May 2007
19

3. to meet historic productivity levels.
8
Figure 2. Percentage of County Departments in the Front Consequently, the burden of wel-
Range of Colorado That Expect Workforce Shortages and fare programs will increase for these
Increased Service Demand in Five and 10 Years future workers; and unless the pro-
ductivity of the average worker can
Workforce shortages Increase in service demand increase significantly over the next 20
In five years In 10 years In five years In 10 years years, the overall productivity output
Department (%) (%) (%) (%) in the United States and other indus-
trialized nations will decline as there
Sheriff 43 29 43 43 will not be enough qualified labor to
meet the demand.
Social services 43 14 86 43 The effects of a decline in pro-
Public works 43 43 29 0 ductivity will include reductions in
revenues, which in turn create fiscal
Fire 14 43 43 14 challenges for local governments.
These fiscal challenges could lead
Revenue and taxation 14 43 14 14
to significant social implications,
Court system 14 43 14 14 including potential cuts to Medicare
and Medicaid. Although the National
Transportation 14 14 57 29 Governors Association is working
to limit federal cuts to Medicare and
Utilities 14 29 29 14
Medicaid, expert testimony before
9
Aging services 14 14 100 57 Congress indicates that the financial
burden for these programs combined
with debt service payments will un-
will decline. This trend will impact
4
of productivity are also in doubt, duly constrain the federal budget over
the global economy adversely. exacerbating the labor and revenue the next 10 to 20 years.10
The demand for qualified workers deficit. Furthermore, although 76
7
As a result of these growing bud-
also will increase as nations struggle million young people will be moving getary constraints, funding for these
to maintain historic productivity into the U.S. workforce over the next programs will likely shift from the
levels and provide services for their 20 years, the longevity of earlier gen- federal government to state and local
populations. If this observation is re- erations with a combined population governments, stretching already thin
alized, revenue allocations and reduc- of 191 million will increase the el- budgets.
tions will dilute government resources derly dependency ratio (the number
around the globe. of working-age individuals compared Challenges
Another study prepared for NACo with the number of retirees) from the Local governments will confront gen-
shows that a shortage of skilled la- current level of 5 to 1 to a level in erational and fiscal challenges as the
bor in the United States has affected 2030 of 2.6 to 1. global and national populations age.
efforts to promote new economic In other words, by 2030, there will These challenges will increase over
development and the expansion of an be 2.6 people between 15 and 64 for time and across the nation. For Colo-
existing economic base in the private every person over the age of 65; and rado, the challenge may be greater
sector. Reductions in the economic
5
in some industrialized nations this than in other parts of the country
base can result in a leveling or reduc- ratio will be reduced to nearly 1 to 1. because of the projected increase of
tion in revenues for local govern- This level has changed significantly elderly residents, which is expected
ments by affecting sales tax returns since the 1960s, when the number of to be nearly double the projected
and property valuations. Studies also workers to retirees was 7 to 1 in the national average of elderly for 2030.
suggest that to maintain historic lev- United States. What’s more, this figure So, despite improved health and lon-
els of economic productivity and do- does not include the child depen- gevity, labor and funding resources
mestic output, the U.S. workforce will dency ratio that further reduces the will be diluted as the population con-
have to increase by 58 million during number of workers to nonworkers. As tinues to mature locally, nationally,
the next 30 years. 6
a result of the changing demographics and globally. Therefore, to maintain
These studies further indicate caused by increased health and lon- historic levels of domestic productiv-
that the number of available workers gevity and the increased cost of health ity, the competition for skilled labor
will increase by less than half that care, it is expected that there will not will be even greater, with an ever-
amount. In addition to the short sup- be enough workers in the generations dwindling pool of qualified applicants
ply of labor, the education and skills succeeding the baby boomers to ad- to draw from in Colorado and across
necessary to maintain historic levels equately fund and provide services or the country.
20 Public Management  May 2007

4. In the short term, some labor sup- loCal goVernmenT skills deficits, and increases in service
ply and economic impacts may be aCTion demands. Some local governments,
softened by delayed retirement and In addition to the challenges described for example, are crossing political
a greater participation in the work- above, most local governments do not boundaries to form partnerships and
force by women and immigrants or appear to be addressing or adapting aggregate services for the elderly; one
by increased use of aging employees to generational differences in work example is Adams County, Colorado,
as volunteers or as part-time or out- values and service expectations or which also services portions of Arapa-
sourced employees. However, the size implementing competitive programs hoe County through its Senior Hub
and projected longevity of those aged equally among the generations for program. Still other governments,
65 and older will result in service employee retention, job satisfaction, such as Ajo, Arizona, with its arts and
demands that stretch the country’s and employee development. Should culture program, are combining com-
ability to meet the need, which, in the predictions of slower economic patible services between the elderly
turn, will affect local government in growth come to pass, local govern- and youth. Yet more must be done.
Colorado. ments will contend with reductions Local governments can also reduce
Effects will be felt in the form of in revenues from sales tax and other service and contact demands as they
slower economic growth; a lower funding sources, including reductions create or expand on self-service sys-
standard of living and persistent in assistance from the federal govern- tems to include online bill payments
structural unemployment for the ment as the demand for services in- or payment assistance, service sched-
elderly, the unskilled, and minor- creases. Thus, local governments will uling for such elder care assistance
ity groups; income redistribution be required to do more with much as meals-on-wheels, and more online
caused by the purchase of foreign less, and it is critical that local govern- resources and information, like ap-
goods and services; further ero- ments partner with their employees to plying for government assistance or
sion of the industrial base caused ensure adequate service provision and unemployment insurance. They can
by a limited pool of skilled labor; retain or develop critical skills. even expand on such remote moni-
wage-push inflation for the avail- Fortunately, a few county govern- toring systems as photo radar, site
able skilled labor; and reductions in ments in Colorado and in other areas security, and computerized systems
federal funding assistance for local have begun to implement measures for acquiring building permits. In
governments. 11
to address attrition, labor shortages, addition, new partnerships with sur-
ICMA.org/pm Public Management  May 2007
21

5. rounding jurisdictions, agencies, and set the impacts of an aging population advancement and critical skills devel-
nonprofit organizations or even the by providing current employees with opment, and, as a result, may exhibit
privatization of some services may be the skill sets, resources, and knowl- withdrawal behaviors leading to de-
useful for meeting service demands edge necessary to fill the gaps. 12
creased productivity and commitment
and cutting aggregate costs. Current literature focuses primar- as well as the desire to seek fulfillment
Perhaps local governments can ily on programs to retain retiring and opportunity elsewhere. 14
also borrow concepts from the pri- employees and to enhance youth de- Consequently, as the pool of quali-
vate sector for employee retention velopment. It is rare to find articles or fied candidates shrinks, leadership
and morale and create programs studies of government employers that voids may result when vacancies oc-
such as flextime, job sharing, or place equal emphasis on providing cur. This may result in more outsourc-
hiring retirees back part time or as senior, junior, and sophomore work- ing, the recruitment of employees
consultants in order to retain aging ers with training, retention, develop- who need specialized training, and
workers. It also will be increasingly ment, and quality-of-life opportuni- the retention of employees with less
important to provide opportunities ties. Current literature suggests that experience than may be desired.
for junior workers to participate in younger workers have commitment The wide array of challenges that
decision making and mentoring and levels, work values, and career goals face the nation over the next 20 years
development programs. different from their predecessors, pos- or so may cause local governments
Boulder County, Colorado, for sibly caused by divergent generational in particular to work closely with
example, has developed a year-long values. 13
younger workers to develop their
employee leadership program called Career goals could have as much abilities and learn to become suc-
the Public Service Institute to provide to do with opportunity as they have cessors with the requisite values to
training in self-efficacy and organiza- with divergent generational values. manage greater diversity, the ethics
tional awareness. Encouraging, retain- As older government employees de- to make balanced decisions, and the
ing, developing, and training existing lay retirement, younger employees skills to meet the eminent challenges
employees in such a manner may off- may find limited opportunities for of tomorrow. PM
If only this was
your toughest decision.
Smart growth, Pandemic flu, Brownfields,
Inter-jurisdictional cooperation...the list only
grows. Continuing your education is critical
for addressing these complex issues. And AMU
has online master’s degree programs in
Emergency and Disaster Management
and Public Administration that give you the
skills you need to lead in these challenging times.
That is a choice you won’t second guess. Take the lead.
American Military University Serving more than 20,000 civilian and military students.
Educating Those Who Serve
111 W. Congress St. | Charles Town, WV 25414 | 1-877-468-6268, option 2 Visit us at www.amuonline.com to learn more
22 Public Management  May 2007

7. referenCes “Future Labor and Skills Shortage Jeopar- Dimensions of Demographic Change,”
1
Laurence J. Kotlikoff and Scott Burns, dize American Prosperity” (Washington, Brookings Discussion Papers in Interna-
The Coming Generational Storm: What You D.C.: Employment Policy Foundation, tional Economics, no. 141 (Washington,
Need to Know About America’s Economic 2001), http://www.epf.org/research/news- D.C.: Brookings Institution Press, De-
Future (Cambridge, Mass.: MIT Press, cember 1998), www.brook.edu/views/
2004), 1–72. papers/bryant/141.pdf.
2
J. Westkott (Colorado state demog- The demand for Kathleen Hunter, “Bush Budget
9
rapher), interview on “Local Matters,” Short on State Aid,” Stateline.org, Feb-
National Public Radio, Boulder, Colo.,
September 2005.
qualified workers ruary 6, 2006, www.stateline.org/live/
printable/story?contentId=86488.
Richard L. Clark, “Counties Face David M. Walker, “21st Century:
10
also will increase
3
the Senior Boom: A Survey of the Ef- Addressing Long-Term Fiscal Chal-
fect of an Aging Population and an Ag- lenges Must Include a Re-Examination
ing County Workforce on County Ser- as nations struggle of Mandatory Spending; Testimony
vices,” prepared for the National before the Budget Committee, House
Association of Counties (Athens: Uni- to maintain historic of Representatives,” Report no. GAO-
versity of Georgia, Carl Vinson Insti- 06-456T (Washington, D.C.: U.S.
tute of Government, February 2004), productivity levels Government Accountability Office,
www.naco.org/contentmanagement/ February 15, 2006), www.gao.gov/new.
ContentDisplay.cfm?ContentID=13923.
4
Stanley Kurtz, “Demographics and
and provide services items/d06456t.pdf; and David M.
Walker, “Medicare: Program Reform
and Modernization Are Needed but
the Culture War: The Implications of
Population Decline,” Policy Review
for their populations. Entail Considerable Challenges; Tes-
(Hoover Institution), no. 129 (Febru- timony before the Special Committee
ary–March 2005), www.hoover.org/ If this observation on Aging, U.S. Senate,” Report No.
publications/policyreview/3431156. GAO/T-HEHS/AIMD-00-77 (Washing-
html. is realized, revenue ton, D.C.: U.S. General Accounting
5
City Policy Associates, “Urban Office, February 8, 2000), www.gao.gov/
Worker Survey” (Washington, D.C., allocations and archive/2000/h100077t.pdf.
National Association of Counties, Walker, “21st Century: Addressing
11
2001), www.naco.org/Content/Content reductions will dilute Long-Term Fiscal Challenges Must In-
Groups/Publications1/Surveys1/Urban/ clude a Re-Examination of Mandatory
UrbanWorkerSurvey.pdf.
6
Donald M. Atwater and Aisha
government resources Spending.”
NACo recently described addition-
12
Jones, “Preparing for a Future Labor al efforts in a special supplement on
Shortage: How to Stay Ahead of the around the globe. succession planning; see “Hot Topics,
Curve,” Graziadio Business Report Searching for a local Succession Planning,” special supple-
(Pepperdine University) 7, no. 2
(2004), http://gbr.pepperdine.edu/042/
government job?
letters/2001/ef20011025.pdf (June 12,
ment to County News (NACo), Decem-
ber 11, 1006, www.naco.org/Template.
2005).
laborshortage.html. cfm?Section=Labor_and_Employment&
8
Ralph C. Bryant and Warwick J. McK-
Employment Policy Foundation,
The ICMA template=/Content Management/Content
7
ibbin, “Issues in Modeling the Global
Display.cfm&ContentID=21985.
JobCenter Lynne C. Lancaster and David Still-
13
man, When Generations Collide: Who They
can help. Are, Why They Clash, How to Solve the
Generational Puzzle at Work (New York:
HarperCollins, 2002).
Searching for a local Lakshmi Ramarajan and Sigal G.
14
Barsade, “What Makes the Job Tough?
government job? The Influence of Organizational Respect
on Burnout in the Human Services,” No-
The ICMA vember 2006, http://knowledge.wharton.
upenn.edu/papers/1327.pdf.
JobCenter Todd Tucker is town planner, Frederick,
Colorado (ttucker@frederickco.gov). Au-
http://jobs.icma.org
can help. thor retains the article copyright, and the
article can’t be cited or reproduced in
whole or in part without the written per-
06-007
mission of the author.
24 Public Management  May 2007