Regional Insights: The impact of seniors' spending
Share with others:
The next time you see a senior citizen, thank him or her for being one of the primary forces supporting our economy through the recent recession. Had it not been for our seniors, unemployment rates in the Pittsburgh region would likely be much higher today than they are.
How have seniors played such a key economic role? More than one of every six residents (17.3 percent) of the Pittsburgh region is over 65 years old, the largest proportion of any major region in the country. Social Security payments for retired seniors were increased in 2009 while salaries for workers were being reduced or eliminated, and seniors retained generous health benefits through Medicare while many private businesses were reducing health insurance coverage for workers. When our seniors spend their retirement income in stores, in restaurants, on entertainment, etc., they support thousands of jobs in our region, and providing health and personal care services to seniors creates jobs for thousands of additional workers here.
Spending by and for seniors is a big part of our economy. More than one out of every five dollars (21.2 percent) of personal income in the Pittsburgh region now comes from "transfer payments," two-thirds of which are Social Security and Medicare. (Other transfer payments include private pensions, veterans' benefits, Medicaid payments and unemployment compensation.)
Due largely to the many seniors who live here, the Pittsburgh region derives more of its income from transfer payments than any other major region in the country. That made a big difference during the recession -- while total personal income in most large regions dropped by at least $1 billion from 2008 to 2009, Pittsburgh was one of only five major regions that actually saw a small increase in personal income in 2009. Workplace earnings and investment income in the Pittsburgh region decreased in 2009, so if it hadn't been for our high and growing level of senior-driven transfer payments, there would likely have been even more job losses here.
First Published December 5, 2010 12:00 am
