Remember the adage that a rising economy raises all boats. Today’s economy is showing that’s not always the case. While there’s ample evidence the Tri-Cities economy is seeing gains, demographics show the population picture is soft – very soft in some areas. In fact, some counties are losing population and the end result of a declining population is a softer economy.
The most current Census data illustrates the situation.
The number of deaths in each of the region’s counties outnumbers the number of births. That means attracting new residents is the only vehicle for population growth. And – as the chart illustrates – growth is not evenly distributed.
So far, it has been good news for Washington County and not-so-good news for the other counties. It’s also why you’re seeing some local governments – like Kingsport – in a flurry to attract new residents.
In a couple of months reports on city-level demographics will afford the opportunity for a drill down on the numbers.
Population is a big deal because in a consumer-driven economy a declining population means fewer people have to spend more to sustain the status quo of sales tax collections – a prime revenue stream of local schools and government.
And a declining population – combined with the rapid aging of the Baby Boomers – means fewer people are in the labor force. There’s good and bad with that. The good is it tends to prod employers to increase wages – an important gain in an area with chronic underemployment and wage stagnation. On the downside, it means businesses won’t have an adequate labor force to keep up with the business cycle opportunities. A great example is what new home builders are now facing. They’re having a problem keeping up with demand and a labor shortage is a big driver of that situation.