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Michigan is becoming a gray state

By Ted Roelofs, 04/25/2005, The Grand Rapids Press

At 91, Eleanor Cole considers herself lucky to be alive -- not to mention having such a nice place to call home.

"It's heaven-sent," Cole says of Breton Manor nursing home in Kentwood. "They are so nice to me here."

Cole is grateful Medicaid helps pay her bills. But she worries the same safety net might not be there for her three sons, ages 51, 59 and 65.

"I tell you I really don't know. They are going to have to get up some other kind of program," Cole says.

Cole isn't the only one concerned about the graying of Michigan. The U.S. census projects that the number of residents over age 65 will grow by 860,000 from 2000 to 2030 -- a 71 percent increase. At the same time, the overall population is projected to grow by just under 8 percent, which means the state will likely lose another two congressional seats by 2030.

It's a demographic shift Michigan shares with other states of the industrial North and Northeast. As jobs and people migrate south and west, rust belt populations are projected to remain stagnant -- and older.

One economic analyst says it's not yet clear how we will pay for all this.

"It is going to be an increasing burden," said George Erickcek, senior research analyst for the Upjohn Institute. "There are too many of us 40- and 50-year-olds who have not been able to properly save for retirement.

"If I were 14, I wouldn't be thinking about this -- but I should, because I would think this is going to be a pretty big burden on me."

At the same time, Michigan's traditional economic base is growing increasingly shaky. Big Three automakers -- especially General Motors -- are going to have to address the crushing burden of retiree health and pension costs if they are going to be around 10 or 20 years from now, he believes. GM just posted a $1.1 billion first-quarter loss, as the company presses union workers to reopen its labor contract to cut medical costs.

"I don't know how they can stay in business" without cutting those costs, Erickcek said.
The same factors are squeezing public employers. This week, Grand Rapids Public Schools finalized plans to privatize busing to save on health care and retirement costs.

In the city of Grand Rapids, almost 25 cents of every city dollar will be spent for health care and retirement costs by 2010, City Manager Kurt Kimball estimates. In 2000, those costs consumed slightly more than 10 cents of every dollar spent.

On top of that, the state is already struggling to pay its Medicaid bills, a point hammered home earlier this week by Gov. Granholm in Washington, D.C. Last year, Michigan spent roughly $7.5 billion on its Medicaid program, which paid for 70 percent of all nursing home care in the state.

Granholm said the rising cost of the program is forcing the state to make cuts somewhere else. "It is forcing the states to choose between serving their parents, serving poor children, or serving public education. These are terrible choices that states are facing," Granholm said. Despite these woes, Erickcek doesn't think this demographic trend spells doom and gloom for Michigan. While manufacturing jobs will continue to dry up, he foresees considerable growth in the health-care and housing industries that cater to the elderly.

Erickcek said there is another way to look at the elderly -- not as a burden but as community assets.

That's the view of the Area Agency on Aging of Western Michigan, where officials point to a 2004 survey of 500 Kent County senior citizens. The survey found 42 percent say they volunteer in the community, while nine of 10 said they were satisfied with their neighborhoods.

"It's a huge heterogeneous population," said Tom Czerwinski, Agency on Aging executive director. "There will be many adults who will continue to contribute to the community," he said. "Many will want to continue to work. They are active. They volunteer. They contribute to our community in a variety of ways."

2005 Grand Rapids Press.