Understanding and Preparing for Big Things to Come

The Greek philosopher Heraclitus famously said, “The only constant is change.” This is true in all aspects of life but especially true when considering population change, which can have a profound impact in many areas. Population change is a fundamental component of any society, but the nature of change is often difficult to understand.

By Robert Spendlove

Zions Bank’s Economic and Public Policy Officer

 

The Fundamentals of Population Change

Changes in an area’s population are caused by natural increase and migration. Natural increase occurs when births outnumber deaths during a time period. Natural increase tends to change gradually, although growth often happens in waves. The most famous wave recently was the large “baby boom” from 1946 to 1964. Migration occurs when people move in or out of an area and is much more volatile than natural increase. If more people move into an area than out of the area, it will experience net in-migration. However, if more people move out than move in, the area will experience net out-migration.

 

Strong Population Growth in the US and the West

While many areas in the world are enduring stagnant population growth and out-migration, the United States continues to grow consistently through both natural increase and net migration. The U.S. population is now around 325 million and is projected to grow to 417 million by 2060. This reflects a continued, albeit moderate, natural increase combined with continued international migration. America has always attracted people who want the opportunities and freedom available in our country, and this is expected to continue in the future.

Within the United States, the West continues to be one of the fastest growing regions in our country. The center population has consistently moved west and south since the founding of the U.S. and is now located near Plato, Missouri.

 

Strong Population Growth Related to Strong Economic Growth

The Western U.S. continues to experience strong population growth as more people seek quality of life and access to outdoor recreation. The Intermountain West has the strongest economic environment in America and is seeing the highest job growth in the country. For the past several years, states such as Utah, Idaho, Washington and Oregon have competed for the distinction as the state with the highest job growth in the country. As people learn about the strong job growth and healthy economic environments in the West, they are increasingly moving to these states. This is causing the net in-migration into these states to skyrocket. In Utah, in-migration jumped from 6,000 in 2014 to nearly 18,000 in 2015. Idaho has seen similar jumps in net migration in recent years, with around 9,000 moving into the state in 2015.

 

Growth Brings Challenges

While population growth brings opportunity and benefits to communities, it also presents challenges. Extreme growth can limit access to much needed resources such as land, water, infrastructure and public services. Communities often struggle to keep up with population growth and plan accordingly. It can also be very expensive to plan for and accommodate high growth. For instance, in Utah, public schools consistently see enrollment growth of more than 10,000 students per year. The State of Utah must commit around $100 million per year just to keep up with this growth.

 

Preparing for Growth

It is essential for communities to anticipate and prepare for population growth — and especially in cities and states experiencing high growth. The better prepared they are, the better able they will be to meet the challenges.

 

To read more economic news compiled monthly, please view our Economic Snapshot report on www.zionsbank.com/economy.

ABCs of Population Growth