Report: An aging Florida ushers in ‘new regime,’ and new opportunities, for investors
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It could lead to more government borrowing at a time when rising interest rates are already pinching the economy.

A new report released by one of the world’s largest asset managers affirms that the markets are in a new regime — meaning new factors and focuses within the market.

Generally, aging populations earn less, affecting consumer spending and public finances. Given that Florida’s median age skews older — 42.2 years — BlackRock Investment Institute’s 2023 Midyear Outlook’s observations on the aging population are particularly relevant.

“The global labor force is growing more slowly than it has since the Second World War. Reduced labor supply limits how much an economy can produce and grow — and leaves fewer workers to support a larger non-working population,” the report reads.

“That impacts government spending and debt: per capita revenue from income tax falls, as spending on retirement-related benefits like pensions and healthcare rises. That could lead to more government borrowing, at a time when rising interest rates are already increasing debt burdens.”

Population aging is already a binding constraint on the U.S. labor supply, and it’s a particularly prescient concern in Florida, which ranks No.2 for residents over the age of 65, who account for 21.3% of the state population.

Based on the information in the Midyear Outlook, an aging population in the state could prove inflationary. Not because older populations consume less, but because demands shift toward other categories, such as a higher demand for health care.

Therefore, lower production capacity would not necessarily result in a commensurate drop in spending. That’s why aging contributes to the “new regime” and creates more difficult policy choices for central banks.

The Midyear Outlook provides insights into upcoming opportunities in health care, real estate, leisure and companies with products and services for seniors. It also offers a textbook example of what an aging population could portend for the state and national economy.

“Japan offers an interesting case study: Its working-age population has been shrinking since 1994. Japan didn’t see higher inflation because economic activity was hurt by the bursting of its asset price bubble in the early 1990s. Yet it does give a glimpse of the growth effect: Since 1990, government data show that hours worked in Japan fell as the working-age population peaked and started to shrink. Japan offset some of the fall in working-age population by growing the share of women in the workforce. Other (developing markets) might struggle to do the same since female participation is already higher,” the report states.

Notably, workforce participation among U.S. women of prime working age (25 to 54) hit at an all-time high of 77.5% this year.

The report continues, “Other options: increase immigration or raise the retirement age, each of which has political considerations. Or it can be partially offset by higher productivity, perhaps helped by AI.”

Peter Schorsch

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including Florida Politics and Sunburn, the morning read of what’s hot in Florida politics. Schorsch is also the publisher of INFLUENCE Magazine. For several years, Peter's blog was ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.


  • Dont Say FLA

    July 25, 2023 at 7:22 am

    Florida has the highest rate of inflation of any US state due to its population of elderlies? Or do outdated, disproven political and economic policies that create inflation also attract elderlies who want to See America Through The Lens Of Their Childhood Again Because Their Parent(s) Shielded Them From The Real World That Was Not As Great As They Think It Was (MAGA for short)?

  • People flee blue states for Florida

    July 25, 2023 at 7:39 am

    Ron DeSantis likes to brag how people flee blue states for Florida.

    What he doesn’t say is that folks in Florida, they choose not to have children because they’ve learned how much Florida sucks.

    Hence Ron’s 6 weeks to forced birthing scheme, trying to force babies out of Floridans who know better than to introduce a baby into Florida.

    If the GOP wants more babies, maybe stop making places and people so terrible to the point that young folks of baby making age aren’t thinking “ain’t no way I’m putting a baby in this mess, and I can’t afford one anyways”

Comments are closed.


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