American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
April 2009

Cliff Diving and Curb Jumping

1. Hot Trends:  CLIFF DIVING AND CURB JUMPING
2. Q & A:  WHY AREN’T MORE UPSET ABOUT HEALTH CARE COVERAGE?
3. COOL LINKS:  RETIREMENT CONFIDENCE IS PLUMMETING, COLLEGE PLANS ARE CHANGING
4. Reference Tools:  HOUSEHOLD SPENDING, WHO’S BUYING REPORTS, BEST CUSTOMERS, AMERICAN MEN, and AMERICAN WOMEN

1. Hot Trends

Cliff Diving and Curb Jumping

Take a look at any economic indicator lately, and you’re likely to swoon as the trend line veers into a vertical plunge. This is called cliff diving. It is a common sport in economics, but rare in demographics. Demographic change is slow and steady. Demographic trends rarely dive off cliffs, but they occasionally jump off curbs. Case in point: the latest geographic mobility statistics.

Last week the Census Bureau reported that only 11.9 percent of the population moved from one house to another between 2007 and 2008–the lowest proportion ever recorded in data that has been collected since the late 1940s. The number of people who moved–35 million–was the smallest since 1959-60.

Given the dire situation in the housing market, these numbers are not surprising. Homeowners are stuck and even renters aren’t moving around as much as they once did. In 2007-08, only 5.4 percent of homeowners moved, down from 6.6 percent the year before and 7.4 percent in 2000-01. Among renters, 27.7 moved between 2007-08, down from 29.3 percent a year earlier and 30.3 percent in 2000-01.

State-to-state migration has been severely curtailed. The number of people moving from one state to another fell by 39 percent between 2000-01 and 2007-08, shrinking by 3 million.

By age, the largest proportionate drop in mobility has occurred among people aged 60 to 61–an age group once filled with retirees. In 2007-08, only 4.7 percent of 60-to-61-year-olds moved, down from 7.6 percent in 2000-01.

If you really want to know how the priorities of Americans are changing, then take a look at their reasons for moving and how those have changed over the past few years.

  • Not buying: The number of people who moved because they wanted to buy a home fell by 48 percent, from 3.9 million in 2000-01 to just 2.0 million in 2007-08–the largest decline among all reasons for moving. While there probably is some pent up demand for buying a home, it is possible that many Americans are reconsidering the importance of ownership now that they know the risks.
  • Moving closer to work: The number of people who moved to shorten their commute increased by 80 percent between 2000-01 and 2007-08, rising from 1.2 to 2.2 million–an 80 percent rise and the largest increase among all reasons for moving. This is bad news for the far-flung suburbs, which will be last in line for any economic recovery.
  • Delaying retirement: The sharp drop in the mobility of 60-to-61-year-olds is reflected in the 38 percent decline in the percentage of people who moved because of retirement between 2000-01 and 2007-08. Retirement savings have been decimated and the age of retirement is rising, which is why state-to-state migration has plunged. This trend could gut destination retirement areas.
  • Staying closer to home: The data show an ominous decline in the number of young adults who moved to attend or leave college, with the figure falling by 26 percent between 2000-01 and 2007-08. This decline is occurring as a growing proportion of students opt for less-expensive in-state public schools and is yet another warning sign for the nation’s overpriced private colleges.
  • Downscaling expectations: The percentage of people who moved because they wanted cheaper housing climbed by 35 percent between 2000-01 and 2007-08. At the same time, the percentage who moved because they wanted a better home or apartment fell by 29 percent.

Americans are dropping out of the housing market, delaying retirement, and downscaling their expectations for college and home. These trends may be temporary, but the best way to survive them is to assume they are permanent.

By Cheryl Russell, editorial director, New Strategist Publications
For more about the Census Bureau’s geographic mobility data, click here. If you have questions or comments about the above editorial, e-mail New Strategist at demographics@newstrategist.com.

 

BET YOU DIDN’T KNOW

Biggest spenders on moving costs: householders aged 55 to 64.

2. Q & A

Why Aren’t More People Upset about Shoddy Health Care Coverage?

Where are the pitchforks? Where are the “tea parties” to protest the broken health insurance system? A look at the demographics of health insurance coverage reveals the answer. The percentage of Americans who are at the mercy of the overly expensive and inadequate private health insurance system is not large enough to make reform a political necessity.

Of the 225 million adults in the United States in 2007 (the latest data available), 69 percent are covered by private health insurance. That seems like a lot, but subtract from that number all those aged 65 or older who are also covered by Medicare and the figure falls to 59 percent who are one divorce, one job loss, or one medical condition away from no insurance at all. The figure is even lower–probably well below 50 percent–if you also subtract the unknown number who have a top-quality private health plan, such as teachers, firefighters, and our own elected representatives. Little known fact: each member of Congress receives health insurance for life after serving only five years in office–even after they lose an election. This fact goes a long way toward explaining the “What, me worry?” attitude on Capital Hill.

To top it off, the people most likely to vote (those aged 65 or older) are also the ones least likely to think the government should help out with health care. This is the age group, by the way, that is so generously covered by government-provided Medicare. According to the 2008 General Social Survey, only 41 percent of Americans aged 65 or older think government should help people with health care.

By Cheryl Russell, editorial director, New Strategist Publications. If you have any questions or comments about the above Q & A, e-mail New Strategist at demographics@newstrategist.com.

BET YOU DIDN’T KNOW

Health insurance as a share of annual out-of-pocket spending on health care by the average household: 53 percent.

3. Cool Research Links

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful links.

Retirement Confidence Survey
The Retirement Confidence Survey has been fielded every year since 1996, and never has confidence been as low as in 2009. According to the Employee Benefit Research Institute, the percentage of workers who are very confident in being able to afford a comfortable retirement fell to 13 percent in 2009, down from a high of 27 percent in 2007–right before the economic meltdown. The expected age of retirement is climbing, and the largest share of workers–36 percent–say the poor economy is the reason. Another 28 percent say losses in the stock market will delay their retirement. Find out more about America’s changing retirement expectations by clicking on this link.

Survey of College Plans
College plans are also changing because of the weak economy. A survey of students likely to enroll in college in the fall of 2009 shows families downscaling their expectations and worried about costs. The survey, available at the above link, was conducted by Longmire and Company and 20 public and private institutions of higher education. It found 46 percent of families saying their college plans have changed somewhat or dramatically. Fifty-three percent say they are planning to enroll their child in a less expensive school. Among families with household incomes below $80,000, the 77 percent majority say their out-of-pocket expenses for college must be under $10,000. Among families with household incomes of $80,000 or more, the 70 percent majority say the limit is $20,000.

 

BET YOU DIDN’T KNOW

Percentage of women who shop for groceries on an average day: 15.

 

4. Find Out How American Consumers Spend Their Money

Consumers are slashing their spending, making it vital to get the answers to Who buys? What do they buy? How much do they spend? And, most important, what will they cut as expenses rise?

Now you can get accurate and reliable answers to these questions from the following just-published resources from New Strategist, which are based on data from the Bureau of Labor Statistics that you cannot get anywhere else–including online!

  • The new 13th edition of the annually updated Household Spending: Who Spends How Much on What, is your exclusive guide to dollar-for-dollar answers to who is buying hundreds of products and services ranging from laundry detergent and phone cards to big-ticket items like homes and cars.
  • Best Customers: Demographics of Consumer Demand, 5th ed., is your one-stop resource for finding out who spends the most and who controls market share–often surprisingly different–for over 300 products and services.
  • The 14 volumes in the Who’s Buying Series, which can be purchased individually or as a set, give you the big picture about consumer spending by age, income, household type, race, Hispanic origin, region of residence, and education. Each volume focuses on an individual product category, ranging from apparel and beverages to restaurants, transportation, and travel.

Also new from New Strategist are two volumes that examine the many dimensions of men’s and women’s lives as the first decade of the 21st century comes to a close:

For your convenience, all New Strategist titles are available as searchable single- and multiple-user pdfs that are linked to spreadsheets of all the data tables in the book so you can do your own analysis and PowerPoint presentations.

BET YOU DIDN’T KNOW

Percentage of men who shop for groceries on an average day: 10.