The personal income of Islanders comes from a variety of sources and pays a lot of bills. One important and (let’s hope) reliable segment of the Vineyard’s total income comes from transfer payments to elderly Islanders and others who receive checks from the Social Security Administration.
The drumbeat of days passing naturally leads one to begin new explorations that earlier had not seemed so compelling. For instance, I recently found myself wondering about the Social Security benefit recipients among us and the contribution their monthly benefit checks make to the overall Martha’s Vineyard economy. It turns out that the contribution is great, although not as great as you may have casually thought.
With the help of the good folks at the Census Bureau, the Social Security Administration, and the Bureau of Economic Analysis, one can satisfy one’s curiosity.
For instance, the personal income of Martha’s Vineyard residents — and here, for this informal inquiry, I’m including Gosnold, the seventh town in Dukes County — added up to about $942 million in 2009. For discussion purposes and the ego boost it may supply, let’s call it nearly a billion, or maybe more than a billion, counting the goings-on in the part of the economy that is innocent of involvement with the IRS.
That income comes from several sources — salaries, pensions, interest, dividends, wages, and transfer payments such as Social Security benefits. About 3,300 or 21 percent of Islanders receive Social Security benefits, including payments to survivors of beneficiaries and to the disabled, but 80 percent of all Vineyard recipients are retired.
The $47 million in Social Security benefits imported to the Island economy represents about five percent of total personal income that at least begins its spending life locally. Statewide, Social Security benefits represent a smaller share of personal income, about 4.5 percent. Fewer retirees and a bigger, more varied, less seasonal economy probably accounts for the difference. Nationally, Social Security’s contribution is about 5.5 percent, and it may grow as baby boomers retire and the working economy continues its slump.
The size of the contribution made by Social Security payments to the Vineyard’s total personal income has varied over time, from as little as 4.6 percent to as much as 6.9 percent, depending on such variables as the overall health of the broad economy, the changing size of the retiree population, and the changes in the dollar value of Social Security benefits, which are indexed for inflation.
For comparison purposes and, I suppose, to plump up the sense of Vineyard self we all hold so dear, residents of Nantucket county have total personal income of about $723 million, of which roughly three percent comes from Social Security transfers. About 12.4 percent of the total Nantucket population, approximately 1,400 people or roughly half the comparable number on the Vineyard, receive Social Security benefits.
In his Martha’s Vineyard Economic Profile, John J. Ryan discussed what’s been happening to us, economically and demographically, over time. His review was done in 2008 for the Martha’s Vineyard Commission and its Island Plan, the magnitude of whose accumulating irrelevance is astounding.
“The era of high economic growth rates is over,” Mr. Ryan warned then, without bothering to add even a smidgen of boosterish glazing. “Population, housing starts, seasonal residents, and day visitors all went through an extended period of rapid growth starting around 1970. All of these growth rates have slowed in this decade. The next 20 years will likely be marked by much slower job and housing growth.”
Mr. Ryan’s analysis was completed in January 2008, when the pit of the Great Recession had not been reached and the glimmers of recovery — called “green shoots” by some of the more imbecilic commentators during those ghastly times — had not yet become apparent. Consequently, his report does not warn that we ought to add, as it might have, a deflating multiplier to all his estimates.
Note that, dull as he expects our prospects to be, he still imagines “housing growth.” In fact, although housing has not collapsed as it has elsewhere between 2008 and 2011, median house values, $640,000 in 2006, a figure more than double the median value for Massachusetts as a whole, has declined to $565,000 in 2011, a drop of 12 percent since 2006.
“The ability of residents to expand income enough to remain on the Island will be more a function of the diversification of employment than of growth in the existing resort/tourism base,” Mr. Ryan forecast.
And, as to the gifts and demands attached to the Island’s Social Security beneficiaries — the five percent that giveth and taketh away — Mr. Ryan writes, “As in all areas of Massachusetts, the Vineyard population is aging. The percentage of the Island’s seniors is rising faster, and the concentration of children is declining faster than elsewhere in the state.
“High housing costs have virtually stopped domestic in-migration and reduced the number of young working families. Finding workers to serve the rapidly growing senior population will be a major consideration for Martha’s Vineyard over the next two decades.”
The share of Island personal income contributed by retirees is likely to grow over the next few years, especially as the share contributed by young workers needed to help the elderly with their chores declines.
It’s a recipe for a community rather different from the one we enjoy today.