Report shows positive economic contribution from state’s 50+ relative to their share of the population.
AARP Montana is putting a spotlight on the $19.6 billion of annual economic activity generated by Montanans age 50-plus known as the Longevity Economy. Montanans over 50 contribute to the economy in a positive, outsize proportion to their share of the population.
Despite being 39% of Montana’s population in 2017 (expected to be 40% in 2040), the total economic contribution of the Longevity Economy accounted for 42% of Montana’s GDP ($19.6 billion). This supported 50% of Montana’s jobs (325,000), 45% of labor income ($12.7 billion), and 35% of state and local taxes ($1.6 billion). The greatest number of jobs supported by the Longevity Economy were in education & health services (73,000), trade, transportation & utilities (67,000), and leisure & hospitality (55,000).
“The economic power of Montanans age 50-plus is clear,” said Tim Summers, AARP Montana State Director. “The 50-plus across Montana are making a substantial and positive contribution to our economy—far more than people realize. Policymakers need to recognize the value of the contributions made by older Montanans. Likewise, business leaders would be wise to have a 50+ strategy because the market opportunities are just too important to ignore.”
This $19.6 billion impact of the Longevity Economy was driven by $19.8 billion in consumer spending by 50-plus households in Montana, or 58% of total comparable consumer spending. The categories where Longevity Economy spending accounted for the largest share of total consumer spending were health care (68%), entertainment (59%), and utilities (58%).
The Longevity Economy is the sum of all economic activity in Montana that is supported by the consumer spending of households headed by someone age 50 or older—both in Montana, as well as spending on exports from Montana to other states and DC. This includes the direct, indirect (supply chain), and induced economic effects of this spending. The induced impact involves the ripple effects from the spending of those employed either directly or indirectly.
People over 50 also make a significant contribution to Montana’s workforce, with 68% of people 50-64 employed, compared to 81% of people 25-49. Overall, people over 50 represent 37% of Montana’s workforce. Among employed people, 21% of those 50-64 are self-employed entrepreneurs, compared with 12% of those 25-49. Additionally, 43% of those 50-64 work in professional occupations, compared to 47% of those 25-49.
AARP recently released the Longevity Economy report, an in-depth look at how our nation’s population of 111 million 50-plus consumers impacts the economy. According to the report, nationwide the 50-plus cohort makes up 35% of the U.S. population. This cohort generates $7.6 trillion in economic activity -- if the Longevity Economy were a country, it would be the world’s third largest economy.
As a group, the 50-plus hold 83% of U.S. household wealth and their spending supports 89 million jobs. They are also in the workforce – earning wages and generating tax revenue. They also tend to stay employed longer and spend more. One in three business was started by someone 50 or older. Their desire to maintain independence and stay engaged drives innovation like smartphone apps, remote monitoring and ambient computing.
Additional key findings from the report include:
America’s Longevity Economy is Becoming More Diverse: By 2050, Black, Hispanic, Asian, and other non-white groups will make up 45 percent of the 50-plus population, compared with 26 percent in 2015. This will influence the types of goods and services that the 50-plus population consumes and invests in.
50-plus Workers are a Contributing Force in the Workplace and Have High Rates of Entrepreneurship: People 50-plus are staying employed for longer, earning wages, spending more money, generating tax revenue, and producing economic value for an extended period of time. Those aged 55-64 have had the highest rate of entrepreneurial activity in the US over the last 10 years and one in three businesses in the US in that timeframe was started by an entrepreneur aged 50 or older.
Compelling findings regarding 50-plus Workers and Productivity: There’s a long-held myth about increasing age and decreasing productivity— that perhaps older workers are not as quick, agile or capable as their younger counterparts. While this may hold true in a few specific occupations, data suggest that the worker productivity does not diminish with age. In many cases, productivity may actually increase—even at advanced ages. The reason: Older workers tend to be active in industries that are more knowledge-intensive and less physically demanding. Workers who remain in the labor force in such roles and sectors therefore tend to be more highly educated and productive than their younger counterparts.
The Longevity Economy Supports Job Sustainability: In 2015 alone, spending by people aged 50 and over in the U.S. supported more than 89.4 million jobs and more than $4.7 trillion in the nation’s labor income — 61 percent of all U.S. jobs and 43 percent of labor income was related to this groups’ spending, affecting health services, education and other industries.
Motivation of the 50-plus Influences Business Technology: The 50-plus population has a strong desire to maintain independence and stay active while aging, resulting in businesses developing new technologies – such as remote monitoring, smartphone apps and ambient computing – that cater to them.
50-plus Population is Philanthropic and Charitable: Baby Boomers are found to donate at a larger rate than younger generations, with 80 percent of those 65-plus giving to charity in 2015. Boomers also spend more time volunteering – individuals 55-64 spend 128 hours per year while those 65-plus spend 133 hours per year. In addition, 83 percent of US household wealth is held by those over 50 years old.
The report highlights the fact that the Longevity Economy is redefining economic lines in successfully changing the face of the workforce, helping advance technology and breaking through the traditional perceptions of what it means to age.
For more information about The Longevity Economy and state reports and infographics visit: www.aarp.org/longevityeconomy