In this issue: Economic Outlook Quarterly Update October Selected Economic Indicators 7. Alabama s Changing Population, 2000 to

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1 CULVERHOUSE COLLEGE OF COMMERCE AND BUSINESS ADMINISTRATION CENTER FOR BUSINESS AND ECONOMIC RESEARCH Fall 1 / Volume 7, Number In this issue: Economic Outlook Quarterly Update October 1 3 Selected Economic Indicators 7 Alabama s Changing Population, to 5 8 Some Implications of an Alabama Telecommunications Industry Tax Reform 11 Age Makes a Difference 1 THE UNIVERSITY OF ALABAMA B U S I N E S S

2 This report is also available in PDF format on the Internet at The Center for Business and Economic Research has available at this site downloadable data on various topics including population, retail trade, and employment. Research briefs are also available. CENTER FOR BUSINESS AND ECONOMIC RESEARCH Alabama Business Associate Dean for Research and Technology Carl Ferguson Associate Director Samuel Addy Assistant Directors Deborah Hamilton Annette Jones Watters Authors Samuel Addy Ahmad Ijaz Carolyn Trent Annette Jones Watters Graphic Design Sherry O Brien The University of Alabama s Center for Business and Economic Research (CBER) will hold its Economic Outlook Conference on January 17, in Montgomery at the Embassy Suites Hotel. The Conference will feature Nariman Behravesh, Chief Economist with DRI-WEFA presenting the latest national forecast and Carl Ferguson, Director of CBER, giving the Alabama forecast. The luncheon speaker will be David Bronner, CEO of the Retirement Systems of Alabama. Conference participants will receive CBER s Alabama Economic Outlook, an award winning publication, that covers output and employment by sector. Current economic conditions and trends and their likely effects on the national and Alabama economies are also examined in the Outlook. For additional information: Phone: (5) uacber@cba.ua.edu Addtional Contributors Randall Minor Sunja Park Alabama Business is a quarterly publication of the Center for Business and Economic Research, Culverhouse College of Commerce and Business Administration, The University of Alabama. Articles reflect the opinions of the authors, but not necessarily those of the staff of the Center, the faculty of the Culverhouse College of Commerce, or the administrative officials of The University of Alabama. All correspondence should be addressed to: Editor, Alabama Business, Center for Business and Economic Research, The University of Alabama, Box 871, Tuscaloosa, Alabama For information on the Center for Business and Economic Research, the Culverhouse College of Commerce and Business Administration or The University of Alabama: CBER

3 Economic Outlook Quarterly Update October 5, 1 United States The U.S. economy took a turn for the worse after the tragic acts of terrorism on September 11th. Our last forecast (July 1) called for some sort of recovery by the fourth quarter of 1, but any chance of that now is gone. Furthermore, the current economic slowdown could extend well into the first half of. Although the manufacturing sector was already in a recession, there were signs that a manufacturing recovery could have been close. The inventory cycle was nearing an end, and there was optimism that lower interest rates could revive capital spending. Furthermore, the index of leading indicators had edged up four consecutive months prior to September. However, after the attack, everything was different. Uncertainty overtook both consumer and business sentiment, causing a sharp drop in both. The University of Michigan s Index of Consumer Sentiment had fallen to an eight year low even before the attack, mainly due to continuous warnings from businesses regarding profitability, declines in stock market valuations, and an acceleration in layoff announcements. At the first of September there was still a 5/5 chance that consumer spending would keep the economy from sliding into a full blown recession. However, after the terrorist attacks consumer sentiment plunged and the effects could last a long time. Housing markets, which were holding up remarkably well through the summer, have also softened since September 11th. Our current forecast calls for a mild recession that probably started at the end of the third quarter of 1 and will last through at least the first quarter of. Gross domestic product had been expected to increase by around 1.7 percent in 1, but currently the forecast for 1 is for 1. percent. Prior to the attacks, the forecast for GDP for was. percent, but now the increase is expected to be about 1.3 percent. Most growth in consumer spending occurred during the first half of 1. Consumers seem to be more reluctant to buy durable goods than Gross Domestic Product Over Same Quarter Previous Year, 1996 Dollars /Q1 1/Q1 1/Q Source: U.S. Department of Commerce, DRI-WEFA, and Center for Business and Economic Research, The University of Alabama. Consumer Expenditures Over Same Quarter Previous Year, 1996 Dollars /Q1 1/Q1 1/Q Source: U.S. Department of Commerce, DRI-WEFA, and Center for Business and Economic Research, The University of Alabama. nondurable goods or services. The 1 increase in spending on durable goods is expected to average around 3. percent, significantly lower than the 9.5 percent increase experienced in. Softened consumer spending is taking its toll on the overbuilt retailing sector. Consumer spending will pick back up, albeit moderately, during the first half of. Manufacturing, as well as retailing, is facing a considerable slowdown. The industrial production index dropped almost 6.5 percent during the third quarter of 1, and manufacturing orders are still declining. With a lack of demand in both domestic and foreign markets, and worldwide excess capacity, we may not see any rebound in manufacturing until the second half of. However, there are still bright spots in the economy. Home owners are benefiting from the current 3

4 Industrial Production Index Over Same Quarter Previous Year, 199= /Q1 1/Q1 1/Q Source: U.S. Department of Commerce, DRI-WEFA, and Center for Business and Economic Research, The University of Alabama. refinancing boom, which is providing them with additional discretionary income. The aggressive monetary policy stance taken by the Fed will begin at some point to kindle capital and investment spending. Federal government spending is also expected to stimulate the economy. The $ billion fiscal stimulus in tax disbursements in 1 and almost $7 billion tax relief scheduled for should revive the U.S. economy. Payroll employment is not one of the bright spots. It is a lagging indicator that does not recover from a downturn as quickly as some other economic indicators. Payrolls will continue to decline at least through the third quarter of. Alabama Alabama Nonagricultural Employment Change in Number of Jobs September September 1999 to to September September 1 Total Nonagricultural 1, -6,1 Mining -6 Construction 3,8-3 Manufacturing -5,9-17, Durable Goods -3,7-9, Lumber Products -1,7-1,6 Primary Metals -, -1,6 Fabricated Metal 3-1, Industrial Machinery -1,7-1,6 Electrical Machinery 3-1,3 Transportation Equipment 6 - Stone, Clay & Glass -1-3 Nondurable Goods -, -8, Food Products -1 5 Textile Mill Products 1, -,9 Apparel -3, -,1 Paper & Pulp Products -3-9 Printing & Publishing 5-3 Chemicals -7-1, Rubber and Plastics -1, TCPU 6-1,8 Wholesale & Retail Trade 5,9-6,9 FIRE 5-3 Services 7,7 Total Government, Federal Government -1,3 - State Government 6 1,3 State Education 9 7 Local Government 3,1-1,1 Local Education, -,5 Source: Alabama Department of Industrial Relations. Employment. Alabama s economy had already slowed down significantly before the September 11th attacks. Although most of the layoffs and job losses were concentrated in the manufacturing sector, other sectors of the economy, particularly retailing and services-related businesses, were also feeling the effects. From September to September 1, the state lost 6,1 jobs. These losses were spread across the board. Except for jobs gained in services and 1,3 jobs in state government, every other sector of the economy lost jobs. Manufacturing, which accounts for almost 18 percent of the nonagricultural jobs in the state, lost 17, jobs. Although Alabama s manufacturing sector has been in a recession for over a year now, layoffs and job losses have increased significantly in recent months. Besides a significant slowdown in the U.S. domestic economy, a slump in the world economy is making matters worse for manufacturers who rely on international sales. During the last twelve-month period, the textiles and apparel industry lost approximately 5, jobs. But every manufacturing sector in the state has also lost employment. Almost 9, jobs were eliminated in durable goods industries, including,9 jobs at electrical and nonelectrical machinery and equipment manufacturers. Alabama s steel industry, like the rest of the nation s steel industries, has been overwhelmed by cheaper imports in recent

5 5 Alabama Total Wholesale and Retail Trade Employment Over Same Quarter Previous Year Alabama Total Nonagricultural Employment Over Same Quarter Previous Year /Q1 1/Q1 1/Q Source: Estimates based on Alabama Department of Industrial Relations data. /Q1 1/Q1 1/Q Source: Estimates based on Alabama Department of Industrial Relations data. years. During the last year Alabama s steel manufacturers lost,6 jobs. The services sector in recent years had added as many as 1, to 11, jobs a year, but now this sector is also showing considerable weakness. During the most recent twelve-month period, services-related businesses added new jobs, compared to 7,7 jobs added during the same period last year. Hotels and lodging places, which mainly depend on tourism and convention business, lost jobs, while health care-related concerns lost 3 net jobs during the last 1 months. Retailing, together with services, had been one of the fastest growing segments of the state s economy. But the last year has not been kind to retailing. Retailers lost 6, jobs during this time. Wholesalers haven t fared well either. They lost 7 jobs over the last year. During the same period the year before (September 1999 to September ), the trade sector in the state had added almost 6, jobs. These recent job losses can be attributed to the significant slowdown in consumer spending, an increase in manufacturing layoffs, and the lack of growth in consumer incomes. In the last decade, the growth in retail and wholesale trade had mostly been concentrated in metropolitan areas of the state. Not surprisingly, most of this year s job losses have also been in these areas. For example, the Birmingham metropolitan area, the largest retailing center in the state, lost 3,7 trade jobs between September of and September of Alabama Total Manufacturing Employment Over Same Quarter Previous Year /Q1 1/Q1 Source: Estimates based on Alabama Department of Industrial Relations data Alabama Total Services Employment Over Same Quarter Previous Year /Q1 1/Q1 1/Q 1/Q Source: Estimates based on Alabama Department of Industrial Relations data. 5

6 this year and about 1.1 percent in. Employment conditions are not expected to improve significantly until the second half of. Total state nonagricultural employment is expected to decline by 1. percent. At the end of this year, 8, jobs throughout the state will have been lost. For, job growth will rebound a bit; the state could add approximately 1, jobs. These job losses in metro areas run counter to our expectations. Alabama had been accustomed in recent years to a trend where most job losses occurred in non-metro counties of the state. The metro areas grew; the non-metro areas did not. However, during last 1 months, 6 percent of the jobs lost in this state were jobs inside our metro areas. Of the 6,1 total jobs lost, 15,7 were in metropolitan counties. Tax Revenues. The slowing economy that has been the focus of this essay is also causing a shortfall in tax revenues. During FY-1, ending in September, state tax receipts dropped by.73 percent over the previous fiscal year, a decline of $3.9 million. In the last fiscal year total receipts were up by almost $9 million. While individual income tax revenues increased 1. percent, sales tax receipts fell 1.1 percent and corporate income tax fell 3. percent. Total individual income tax revenues were up $8 million, while corporate income tax receipts dropped by almost $78 million. Sales tax receipts, which are heavily dependent on economic conditions, declined by almost $17 million. With the state s economy expected to remain weak at least through the first three quarters of the current fiscal year, the forecast for tax revenues is not optimistic. Appropriations made to the Alabama Education Trust Fund totaled $,113 million, a shortfall of $11.8 million dollars in FY-1 over the previous fiscal year. Appropriations to the state s General Fund were up by $3.9 million, for a total of $1,136 million. Outlook. The state s economy is expected to remain weak at least through the first half of. Gross state product is expected to increase only.6 percent Employment in the manufacturing sector is expected to remain weak throughout the forecast period. Unless there is a major turnaround in both domestic and international economies, we do not expect any net new jobs in manufacturing industries in the state. Although the construction sector is expected to add some jobs in, most job growth in is expected to be in services-related businesses, and even this growth will be modest. Barring any other major shocks to the economy, the aggressive monetary and fiscal policy stimulus currently underway will help pull the economy out of its current state. We could see a clear turnaround in the economy by the second half of. Ahmad Ijaz ALABAMA ECONOMIC OUTLOOK TAKES TOP AWARD FOR 3 RD TIME The 1 edition of the Alabama Economic Outlook, designed and published by the Center for Economic and Business Research in the Culverhouse College of Commerce and Business Administration, has won the Award for Excellence in Publications presented by the Association for University Business and Economic Research (AUBER). The Alabama Economic Outlook won in the category of economic outlooks, special studies, technical or contract reports. This is the third time the publication has won the award. The award was presented at the annual AUBER meeting in Gulfport, MS. AUBER is the professional association of business and economic research organizations in public and private universities. 6

7 Selected Economic Indicators United States /Q1 /Q /Q3 /Q 1/Q1 1/Q Gross Domestic Product (billions) 9,1.5 9,9. 9,6.1 9,33.9 9,33.5 9,338. Percent Change Year Treasury Bond Rate Month Treasury Bill Rate Consumer Price Index Inflation Rate Housing Starts (millions) Percent Change Total Employment (millions) Percent Change Unemployment Rate Alabama /Q1 /Q /Q3 /Q 1/Q1 1/Q Total Nonagricultural Employment (thousands) 1,91.1 1, ,93.3 1,98.6 1,96.3 1,98.1 Percent Change Total Manufacturing Employment (thousands) Percent Change Durable Goods Manufacturing Employment (thousands) Percent Change Nondurable Goods Manufacturing Employment (thousands) Percent Change Total Wholesale and Retail Trade Employment (thousands) Percent Change Total Services Employment (thousands) Percent Change Alabama Unemployment Rate Initial Benefit Claims (thousands) Manufacturing Weekly Hours Total Tax Revenues (millions) 1, ,683. 1,1.1 1, ,71. 1,73.5 Percent Change Total Income Tax Revenues (millions) Percent Change Total Sales Tax Revenues (millions) Percent Change Note: All percent changes indicate change over same period of the previous year. Source: U.S. Bureau of Labor Statistics, U.S. Department of Commerce, Alabama Department of Industrial Relations, Alabama Department of Revenue, and Center for Business and Economic Research, The University of Alabama. 7

8 Alabama s Changing Population, to 5 Alabama s population totaled,7,1 on April 1,, an increase of 1.1 percent since the 199 census. Population gains are expected to continue during the 5 years from to 5, although the rate of growth will be gradually slowing. Projections by the Center for Business and Economic Research at The University of Alabama indicate that Alabama will be home to almost.8 million residents in 1, a gain of 8.8 percent since. By 5, Alabama s population is expected to approach 5.39 million, an increase of 11.3 percent during the 15 years after 1. Altogether, there should be about 939, more Alabamians in 5 than there were in. Population growth is driven by the age structure of the state s residents, which affects births and deaths, and by the pull exerted to attract new residents through economic opportunity, retirement living options, etc. The aging of the baby boom generation (the oldest boomers turn 65 in 11) will push up the state s death rate and slow the rate of natural increase, despite a gradual rise in the number of women of childbearing age and a resulting increase in births. Statewide, migration is expected to contribute approximately the same number of new residents over each five-year period from to 5 as it did on average during the five-year intervals between 199 and. The projection series covers the state and its 67 counties. Detail is available by five-year age groups and sex for racial categories white and nonwhite. Projections are generated by a cohort-component methodology that 8 Age Groups is driven by measured demographic change population growth between 199 and, birth and death rates, and residual migration. Although assumptions have been made for the state and each county concerning migration patterns, these projections are closely tied to population trends between 199 and. Future economic-based changes that alter the rate of population growth cannot always be anticipated. Age Distribution Alabama Total Population and In individuals from the post-world War II baby boom ranged from 36 to 5 years old. The age structure of Alabama s population will change slightly through 1, with the number of residents aged 55 to 6 increasing most rapidly. From 11 forward, however, strongest population growth will be in the 65 and over age group. This aging swell will impact all aspects of the Alabama economy, from housing to consumer spending to health care needs, as a large Percent by Age Group Source: Center for Business and Economic Research, Culverhouse College of Commerce, The University of Alabama

9 Alabama Population by Age Group and Projected 1 and Age Group Number Percent Number Percent Number Percent - years 95, , , years 96, ,839. 1,, years,611, ,89,7 59.7,999, years 579, , ,53, years 67, , ,65.3 Total,7,1 1.,838, ,385, Note: 85+ population is also counted in 65+ group. Source: Center for Business and Economic Research, The University of Alabama. segment of the population shifts from work to retirement. Alabama counted 579,798 residents 65 and over in. By 1, this number is expected to reach 67,5, a 15.6 percent gain. During the 15 years from 1 to 5, the number of Alabamians aged 65 and above is expected to increase by over 383,, a 57. percent gain. More than a million residents will be 65 and over in 5 and the age group s share of total population will approach percent. The number of very old Alabamians will increase steadily, reaching almost 13, in 5. The oldest boomers will not enter the 85 and over group until 31. While the original baby boom lasted 19 years, the echo boom that occurred from 1977 to 199, when many of the baby boomers had children, lasted 18 years and produced almost as many offspring. Members of this generation will be having their own children during the projection period. Consequently, while the number of women of childbearing age will drop slightly between and 1, it will increase steadily from 1 to 5. Coupled with a gradual increase in birthrates in line with national projections, the number of births in Alabama is expected to rise through 5. The number of preschool children in Alabama should increase steadily, with the gain more rapid after 1. While the state counted 95,99 children aged to in, there should be almost 33,7 in 5, a gain of 1. percent. Alabama s school-aged population, broadly defined as ages 5 to 19 due to the limitations of the cohort-component methodology, is expected to grow very slowly through 1, adding about 7,7. A modest decline from 1 to 15 will result from a drop in 15,5 more 15 to 19 year olds. the 15 to 19 year-old group. After 15, the school-aged population will grow more rapidly, increasing by about 36,6, or 3.8 percent between 15 and 5. For 5 compared to, there will be over 1, more Alabamians aged 5 to 9, about 1, more 1 to 1 year olds, and over Although the number of Alabama residents aged to 6 will increase through 5, the rate of increase will fall rapidly between 1 and 5. This trend, coupled with the surge in the state s elderly population and a modest increase in the number of children, will push up the dependency ratio. The dependency ratio measures the number of children and elderly for every 1 persons of working age, defined here as to 6 year olds. This ratio, which stood at 7. in, will fall to 67.1 in 1. From 68.6 in 15 it will rise rapidly, reaching 7.7 in and 77.8 in 5. A rising dependency ratio indicates heavier demands on social security, health care, and other services that must be supported by working people. Also, slower growth in the working-aged population and an aging workforce will create increased demands for retraining, on-the-job education and training, and retirement benefits. Individuals aged 5 to 6 comprised 38.9 percent of Alabama s working age population in ; they will account for.3 percent in 5. Racial Composition Race reporting became more complex in the census, with individuals allowed to mark more than one race. There were,179 Alabamians who chose this option. For the purpose of the population projections, these individuals were grouped in the nonwhite category. Population projections by race were further affected by the apparent confusion among Hispanics over Hispanic origin being regarded by the census as an ethnicity, not a race. Responses to the race question suggest that many 9

10 Hispanics do not know what to choose for race 6,375, or 3.8 percent of Alabama s Hispanic residents selected the category some other race; 8.8 percent chose white; and the remainder primarily selected black or two or more races. Alabama s nonwhite population category now reflects the state s increasing diversity, with 1 percent of residents in this group making a race selection other than black alone. If we categorize all who did not mark white alone as being nonwhite, Alabama s population was 71.1 percent white and 8.9 percent nonwhite in. From 199 to, the state s nonwhite population increased 1. percent compared to a white population gain of 6.1 percent. A number of factors contributed to the differential growth rates: a larger percentage of nonwhite women are of childbearing age and birth rates are higher; a larger share of the white population is 65 and over, resulting in more deaths; and nonwhites migrated into Alabama at higher net rates during this time. All of these trends are expected to continue throughout the projection period. In 1, Alabama s population is expected to be 68. percent white and 31.6 percent nonwhite. By 5, the state should be home to over 3,63, whites, an increase of 9.5 percent since, and almost 1,93, nonwhites, a gain of 9.7 percent during the 5 years. Population gains will be particularly affected by the age structure of the two racial groups. In 5,. percent of the state s white residents will be 65 and over compared to 1. percent of nonwhite Alabamians. And while.6 percent of whites will be under, 8.6 percent of nonwhites are expected to fall into this age group. Alabama s population should be about 6.3 percent white and 35.7 percent nonwhite in 5. Carolyn Trent Alabama Population Projections, -5 The Center for Business and Economic Research has just completed detailed population projections for Alabama and its 67 counties for five-year intervals from 5 to 5 and for Center for Business and Economic Research Culverhouse College of Commerce The University of Alabama single years from 1 to. Data from the 199 and censuses drive the forecasts. Projections are available on CD-ROM only. The CD-ROM contains an Excel workbook for the state and for each county. Each workbook has 11 sheets including census data for 199 and and projections for 1-5, 1, 15,, and 5. The projections are detailed by five-year age groups broken down by race (white, nonwhite) and sex. Sheets are conveniently tabbed and the entire CD-ROM is menu-driven and easy to install. A summary file of total population and a description of the methodology are also included. Cost of the CD-ROM is $55. To order: Make check payable to The University of Alabama and send with name, complete mailing address, and telephone number to: Center for Business and Economic Research The University of Alabama Box 871 Tuscaloosa, Alabama (5) , FAX (5) Alabama Population Change by Race 199 to and Projected to 5 Total White Nonwhite Year Number Change Number Change Number Change 199,,389,98,89 1,59,9,7,1 1.1% 3,16,88 6.1% 1,8,9 1.% 5,6,53.% 3,,51.5% 1,3, % 1,838,81.% 3,39,58.1% 1,59,8 8.9% 15 5,8,5 3.9% 3,369, % 1,658,73 8.5% 5,11,8 3.6% 3,, % 1,79,8 7.9% 5 5,385,997 3.% 3,63,368 1.% 1,9,69 7.% Note: Nonwhite category includes all races except white alone. Source: Center for Business and Economic Research, The University of Alabama. 1

11 Some Implications of an Alabama Telecommunications Industry Tax Reform Is there a need for a telecommunications industry tax reform in Alabama? Currently, wireless and wired local services are taxed at. and 6.7 percent, respectively. Wireless local services refer to local or intrastate cellular or mobile telephone services. Wired local services are the local or intrastate landline telephone services. The Alabama telecommunications tax structure provides an effectively lower tax for large consumers of telecommunications services. Wireless providers alone are exempted from Class I utility classification, enabling them to pay lower Class II property taxes. Class I property is assessed at 3 percent and Class II at percent for property tax purposes. Interstate telecommunications services are not taxed in Alabama. Thirty-five states currently have sales/excise tax on interstate telecommunications services, up from only five in 198. Proponents of a telecom industry tax reform in the state will point out the unfairness of the current tax treatment and note that it hinders competition. Opponents might raise the need to support an infant industry argument, in response to which proponents might question the infancy of cellular and interstate telephone. In any case, inequitable advantages and disadvantages within any industry adversely impact the state economy. An industry-wide classification for property taxes and a uniform tax rate on telecommunications services seem more equitable. Such treatment will inevitably result in revenue losses and gains for taxing jurisdictions, as well as revenue distribution requirements. Thus, mechanisms for maintaining revenue neutrality for taxing jurisdictions and Funds must be considered in any tax reform. For example, collecting interstate services tax as gross utility taxes would benefit the Education Trust Fund. Some implications of an industry-wide Class II property tax classification and a uniform 5 percent tax rate on local, intrastate, and interstate telecommunications services for the past five years are shown in the chart below. Net revenues increase over the period, since taxable telecommunications revenue grows much faster than the industry s property tax payments. Focusing on, class II property tax classification for the entire telecommunications industry would have reduced property tax receipts by $1. million. Lowering the tax rate on wired local and intrastate services to 5 percent results in a loss of $3. million. However, $53.7 million in interstate tax revenue would have been generated for a net revenue gain of $16.3 million. The analysis in the preceding paragraph does not include the impact on cellular, since cellular telephone taxes are collected separately and not as utility gross receipts tax. Applying the proposed uniform 5 percent to cellular would have raised an extra $7. million in. Of course, higher uniform rates would raise even more revenue. The proposed changes create a fiscal atmosphere conducive to furthering competition in the industry with its attendant benefits of choice, improved quality, and lower prices for consumers. Uniform taxes are transparent and fair, simple, and cheap to administer. It is important to note that revenue generation implies a tax increase on consumers, although it may be negligible as is the case here. Telephone service expenditures constitute only about percent of household expenditures. The 5 percent tax rate proposed here will increase household telephone expenditures by only.1 percent of total household expenditures. This may be more than offset by the decreasing price effect of increased competition and the extra government services that the tax revenues could provide. Samuel Addy, Ph.D. 11

12 Age Makes a Difference Alabama s census results tell us many things about ourselves, and our ages are among the most interesting data. Baby-boomers represent 6 percent of Alabama s population that s more than a quarter of all the people in Alabama. These Alabamians were born between 196 and 196; in 1 they are between 37 and 55 years old. Baby-boomers have had an effect on society in every decade they have moved through. When they were small, local governments had to build new elementary schools to accommodate all of them. When they were young adults, they influenced the course of the war in Viet Nam. Now that they are middle-aged and approaching seniorhood, they are influencing corporate policymaking. Because baby-boomers are the actual policymakers in many companies, sometimes the needs of this age group get prominent corporate attention. Nowadays businesses are recognizing that more workers, especially among the boomer cohort, have to assume caretaking responsibilities for their aging parents. An increasing number of companies offer eldercare referral services or other benefits. Benefit trends also reflect boomers needs in the other direction as well; firms are pitching in to help with college tuition. Some offer scholarships for family members and even the middle-aged employees themselves. Larger businesses are more likely to participate in such programs. Flextime, telecommuting, compressed The University of Alabama Center for Business and Economic Research Box 871 Tusscaloosa, Alabama workweeks, and job sharing are other pioneering ways baby-boomers have affected the business world. But businesses are also paying attention to the needs of age groups other than baby-boomers. For example, children and teens are a big market. Not only do they command a portion of their parents incomes (pediatrician visits, particular brands of cereal, cookies, tennis shoes, or blue jeans), but many of them have access to money for which they control the purchases (CDs, videos, or hamburgers). Children through age 18 make up about 7 percent of Alabama s population roughly the same proportion as the baby-boomers. School-aged children account for roughly percent of Alabama s population and the infant and pre-schooler set comprises another 7 percent. In total Alabama has almost 1. million child citizens. Retailers, marketers, brand managers, and advertisers are attuned to the age structure of their target audiences. These professionals know the number and percent of people in different age groups by locality. They decide what products to carry, what brands will be successful, and what advertisements to run, based in part on data about the numbers and ages of people in their market areas. Census has begun to have important business implications for Alabama in policymaking, marketing, human resources management, and other areas. For more information about the age structure of Alabama, go to the CBER website at Annette Jones Watters Nonprofit Organization U.S. Postage Paid Permit Number 16 Tuscaloosa, AL 351 Address service requested.