Eric Rosa Real Estate

Dan Walters: New California Color Is Gray,

Not Gold, As Aging Tsunami Arrives

BY DAN WALTERS, Sacramento Bee

dwalters@sacbee.com

From the beach party movies of the 1960s to the hippies of the 1970s and Silicon Valley’s baby billionaires today, California has long projected a youthful ambiance.

That’s about to change in a big way. The aging of California’s huge post-World War II baby-boom generation, combined with plummeting birth and immigration rates, means the Golden State is quickly going gray.

A huge growth in the over-65 population, from about 4.5 million today to more than 11 million by 2050 – nearly a quarter of the state’s residents then – will disrupt labor markets as it imposes major new costs on taxpayers for health care and other services.

It could also alter the state’s politics as the elderly become a decisive voting bloc, not only because of rising numbers but because the propensity to vote increases with age.

First, the numbers.Roughly 11 percent of the nearly 40 million Californians today are 65-plus. The state Department of Finance estimates that by 2020, the over-65 cohort will rise to 15 percent, then to nearly 20 percent by 2030, when the youngest of the baby boomers will pass 65, and reach 22.3 percent by 2050, double the current proportion.

One state document puts it this way: “California will surpass the national average for age by 2040 even though it is currently the sixth youngest state in the nation with only 11 percent of its population 65 and older.

Over the next 15 years, those passing the 65-year-old threshold will be mostly white, but later will become a more ethnically mixed group. While the median age of Californians as a whole is about 35 years today, the white median is 44, much higher than that of Latinos (27), blacks (35) or Asians (38). The differentials will narrow over the next 35 years, but even in 2050, the median age of Latinos (38) is expected to be 11 years lower than whites (49).

The most visible effect of these trends will be in California’s workplaces.Baby boomers are roughly 40 percent of the 20 million Californians of working age – 25 to 64. Over the next 15 years the vast majority will leave the labor force, claiming their pensions and Social Security payments and tapping into their personal retirement accounts and home equity, if they have them.

Some will continue to work part-time, but retirements will leave big holes – especially in the ranks of workers with specialized education and skills.

The Public Policy Institute of California has repeatedly highlighted a growing shortage of college-educated workers due to the baby boomers’ exodus from the workforce, the increasing proportion of jobs demanding four-year or higher degrees and doubts about having enough Latinos to fill the jobs because “this group has relatively low levels of educational attainment.”

“In the coming decades,” PPIC says in one report, “slower growth in the supply of college-educated workers