Pennsylvania Demographic Outlook report released last week by Pennsylvania’s Independent Fiscal Office – “Over time, there will be relatively fewer working-age residents to support the needs of rapidly expanding retiree and elderly populations. Stated differently, the burden of support will fall on a smaller group of taxpayers.”

That is not good news for the future of Pennsylvania and it create some real challenges for policymakers and taxpayers alike.

Matthew Knittel, the director of Pennsylvania’s Independent Fiscal Office told Thursday's Smart Talk,"These are really very long term trends that have been occurring and have become much more noticeable due to COVID in part. And two trends are really at work here. One is a large wave of retirements from baby boomers, so moving out of the working age cohort to the retiree cohort. And the second one is declining fertility rates. And that's not true just for Pennsylvania, but nationwide as well. So both of these combined. Moreover, when you have folks who are exiting the workforce for various reasons and we're getting results that are concerning, as you noted, our taxpaying population is shrinking, whereas the folks on the upper end of the age distribution who require services are expanding rapidly."

Knittel said the demographics will impact Pennsylvania's economic growth,"It really affects everything. And in particular, the the underlying economy. You can't see it because it's always there. And it just takes a long time to show up. And I do think we we saw it this last year or two when COVID hit. And we have folks who are departing the labor force that reinforce the underlying demographic trends that are always operating in the background. And of course, we care about that, not only for the number of taxpayers and those who require services, but this ties directly into economic growth. And economic growth is simply the number of folks working times how productive they are. And, of course, economic growth is what drives standards of living."

The IFO produces population trend reports every year.

Some of the other findings include the 0-19 age cohort is expected to decline by almost 1% in the near and long term, while the working age cohort ages 20-64 will decline by half a percent or 200,000 workers.

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