Two weeks ago, we highlighted a statistic that reflects the rapid demographic shift taking place in America. Non-Hispanic whites, Bloomberg reported, citing the Census Bureau, are no longer the majority in Americans under 5 years old.
Why does this matter or, perhaps more to the point, why do we mention it here? Because demographic shifts often have far-reaching consequences for the economy. Here’s what we said [7] last month:
Shifting demographics are affecting everything from the labor market, to homeownership, to race relations in America.
In “The ‘Illegal Immigrant’ Recovery [8]” for instance, we documented the stunning fact that the US has added 2.3 million "foreign-born" workers, offset by just 727K "native-born" since December 2007. Because the "foreign-born" category includes both legal and illegal immigrants, it may well be that the surprise answer why America's labor productivity has plummeted in recent years and certainly months, and why wage growth has gone precisely nowhere, is because the vast majority of all jobs since December 2007, or 75% to be specific, have gone to foreign-born workers.
As for the housing market, we recently cited data from the Urban Institute which shows that because the vast majority of new households in the next decade will be formed by minorities, and because minority groups tend to have lower homeownership rates, the overall homeownership rate in America — which has already retraced twenty years' worth of gains — will likely slide further in the coming years.
These are but two examples of how much demographic shifts matter. Against this backdrop we present the following chart and brief commentary [9] from the LA Times with no further comment:
[10]
The shift shouldn't come as a surprise. State demographers had previously expected the change to occur sometime in 2013, but slow population growth pushed back projections. In January 2014, the state Department of Finance estimated the shift would take place at some point in March.
Either way, the moment has officially arrived.
"This is sort of the official statistical recognition of something that has been underway for almost an entire generation," said Roberto Suro, director of the Tomás Rivera Policy Institute at USC.
California is now the first large state and the third overall — after Hawaii and New Mexico — without a white plurality, according to state officials.
"Where L.A. goes is where the rest of the state goes and where the rest of the country goes," he said. "We announce, demographically speaking, the future for the rest of the country."