One of the most important trends to emerge from the 2020 Census didn't get much attention last week, but it reveals more about how both the U.S. economy and its politics will look in the coming years than most other details focused on by the news media.
Americans' vision of their city of the future typically involves skyscrapers populated by large new technology companies. Yet the 2020 Census didn't point to San Francisco or New York as the fastest-growing city, or even one of the dozens of smaller metros that emulate them. The fastest growing metro area in the U.S. is the Villages, a retirement community in central Florida.
And that's indicative of an economy that's older, less dynamic and more reliant on government benefits. It also points to a growing concentration of political and economic power in the south. This shouldn't be surprising, as Americans are getting older.
The median age is estimated to be about 38.5 in 2020, up from 37.2 in 2010, which was higher than the 35.3 median age in 2000. This reflects the long running trend of aging baby boomers and lower birth rates.
An aging population has consequences for the economy. It could mean lower interest rates, at least for a few decades, because older people tend to hold more assets after a lifetime of saving and they shift some of their assets into bonds to reduce risk in their portfolios.
America will need those low interest rates because the country will be spending a lot: an older population means more people in the economy collecting benefits and fewer working. And that puts a strain on growth, which means less money will be available to invest in younger Americans and infrastructure.
The fact that a retirement community is the fastest-growing city is significant. Cities in Florida, Arizona, and Texas saw some of the biggest growth in their populations.
These states are attractive for their warm climates and low taxes, and that's especially compelling for retirees. Retirees generally make up a very small fraction of American movers each year — up until the last few years less than 0.5% of moves were retirement related.
