UM economist says Montana getting older, richer, more conservative

Every time Paul Polzin looks around his neighborhood, it seems there’s a new face looking back at him.

By MICHAEL JAMISON of the Missoulian

"It sometimes feels like we’re being overwhelmed by newcomers," said the director of the Bureau of Business and Economic Research, the research arm of the University of Montana’s School of Business Administration. "And it’s true. There are a lot of newcomers out there."

And as they continue to arrive, he said, Montana neighborhoods are becoming older, richer and more politically conservative.

That’s certainly the case in Flathead County, where Polzin spoke to about 150 business leaders Tuesday, offering his version of an economic outlook projecting Montana’s fortunes for 2003.

In Flathead County, Polzin said, the neighborhood gained 2,500 people between 1995 and 2000, according to U.S. Census data. Statewide, the neighborhood grew by 6,900 people.

Those growth numbers, however, do not even begin to tell the story of our changing neighborhoods, Polzin said.

"When you try to identify the impact of newcomers," Polzin said, "don’t spend a lot of time on the net figure. Rather, focus on the population replacement."

An example: In 2000, about 74,500 people lived in Flathead County. About 32,800 had moved into a new home between 1995 and 2000. Of those, about 15,000 moved in from somewhere outside the Flathead. About 4,300 arrived from other Montana towns. A whopping 11,000 came from out of state.

Meanwhile, as those 15,000 newcomers arrived from their former hometowns, nearly 13,000 former Flathead residents moved out.

When people say the area grew by 2,500 folks in five years, Polzin said, they fail to take into account the fact that there was a complete replacement of about 20 percent of the population.

Likewise, while the state as a whole picked up 6,900 people between 1995 and 2000, the real impact came by the departure of 104,600 people and the arrival of 111,530 to take their place.

"So what is the impact when in-migration and out-migration are about equal?" Polzin asks. After all, community services such as police and human services wouldn’t necessarily be stressed by such relatively small net gains.

"But what if the characteristics of the people moving in are very different than the characteristics of the people moving out?" he asks. "Well, that’s exactly what’s going on. These two groups of people are very different."

Polzin admits the limitations associated with the necessary generalizations that must be made when discussing demographics, but, he says, three things remain clear. The folks moving in are older than those moving out, richer than those moving out and more politically conservative than those moving out.

What’s the impact of these old, rich Republicans?

For one, large western Montana counties have shifted from Democratic bastions to become GOP strongholds.

In addition, places like Ravalli County – the state’s fastest-growing county – are seeing decreases in grade-school enrollment. Families with fewer kids are part of the cause, he said, but so are those older newcomers, whose kids are well beyond grade school.

Also, the demographic shift has resulted in what Polzin calls "a disproportionate number of high-end homes" being built. Those homes, in turn, crank up the value of the average home, which cranks up the neighborhood’s property tax bills.

In addition, the turnover in population is mirrored in employee turnover, resulting in higher training and recruiting costs and, in some areas, labor shortages, Polzin said.

"It all goes back to population replacement," he said. "The people moving in are different than the people moving out, and this changes the composition of the population."

Some populations are seeing a greater change in composition than others. For instance, urban areas and western counties tend to have more mobility, he said, and so a greater population replacement. Western states in general have higher mobility than other parts of the country, and the Rocky Mountain region has the highest mobility in the nation.

The same observations can be made of businesses as can be made of individuals, Polzin said, but the trends, patterns and impacts are less clear.

In 1998, about 650 firms were added to Montana’s total. But in that same year, 5,100 new companies opened while 4,500 closed.

"The net change," Polzin said, "really understates the amount of business turnover."

But unlike residential population change, little data is available about the characteristics of new businesses compared to old. The types of businesses tends to remain about the same, but beyond that, little is known.

Also, because business turnover is so great, no one has a handle on how "old" those old, closing businesses are. Perhaps they are family outfits in business for generations. Perhaps they are last year’s newcomers. Likely they are a blend of both.

If that’s the case, then the characteristics of the businesses are changing at a far slower rate than the characteristics of residents, as incoming businesses often are replacing other newcomers.

"If we can identify the characteristics of the closing businesses compared to the new businesses," Polzin said, "then we can start to identify the impact of our business newcomers."

Reporter Michael Jamison can be reached at 1-800-366-7186 or at [email protected].

http://missoulian.com/display/inn_news/news02.txt