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Peak Affluence, Housing Values, and More

10/19/11

 

October 19, 2011

American Consumers Newsletter
by Cheryl Russell, 
Editorial Director, New Strategist Publications
 


IN THIS ISSUE:

1. Hot Trends: PEAK AFFLUENCE, HOUSING VALUES, SELF-EMPLOYMENT, VOTING, CELL PHONES, AND MORE
2. 
Q & A:  WHAT DOES IT TAKE TO BE MIDDLE CLASS? 
3. 
Cool Links:  
HOUSEHOLD INCOME INDEX; DEMOGRAPHIC CHARTBOOK; 2010 CENSUS REPORTS: BLACKS AND WHITES
4. Reference Tools:  AMERICAN HOMES, AMERICAN MARKETPLACE, WHO WE ARE: ASIANS, BLACKS, and HISPANICS


To see Cheryl Russell's Demo Memo blog, click here.

  
1. Hot Trends  

Peak Affluence    

In the 1980s, when I was the editor-in-chief of American Demographics magazine, I wrote an editorial called "The Affluent Nineties." In the editorial, I predicted a spike in affluence during the 1990s because the baby-boom generation would be in its peak earning years.  

Was I right or what? We are well past the peak now, and in hindsight we can look back and see the moment of "peak affluence," when household income reached its maximum. This concept is similar to "peak oil," a term used to describe the moment when global oil production reaches a maximum. The timing of peak oil is hotly debated, but not so the timing of peak affluence. The moment arrived in 1999. In that year, median household income reached $53,252 (in 2010 dollars)--a peak we may not see again in our lifetime.

 

Housing Values in 2010

The median value of the nation's owned homes was $179,900 in 2010, according to the American Community Survey. This was down from the high of $197,600 reported to the ACS in 2008. Housing value is self-reported, and the fact that median self-reported value increased through 2008 as prices fell suggests that owners overestimate the value of their home.

 

Dual Income Couples Decline

The number of married couples in which both husband and wife work full-time fell by more than 2.5 million between the start of the Great Recession and today, according to the Current Population Survey. In 2010, there were 16.3 million dual-income couples, down from 18.9 million in 2007.

 

What Happened in the 2010 Election

If you thought the election of 2010 was a fluke you might be right, according to voting data released by the Census Bureau. Voters in 2010 were older and whiter than voters in 2008, as is usually the case in congressional election years. In the presidential election of 2008, only 47 percent of voters were non-Hispanic whites aged 45 or older. In the congressional election of 2010, that percentage swelled to the 54 percent majority. In 2012, older non-Hispanic whites are likely to be less than half of voters once again. 

 

Unemployment Tops Self Employment

American men are now more likely to receive unemployment checks than income from non-farm self-employment. According to the Current Population Survey, 7.2 million men (6.9 percent) made money from non-farm self-employment in 2010 versus a larger 7.5 million (7.1 percent) who received unemployment compensation. In 2007, men who made money from non-farm self-employment outnumbered those who received unemployment by more than two to one.

 

The Year of the Cell Phone

Year in which household spending on cell phones exceeded spending on landline phones, by age of householder...

Under age 25: 2003

Aged 25 to 34: 2005

Aged 35 to 44: 2006

Aged 45 to 54: 2006

Aged 55 to 64: 2009

Aged 65-plus: Still waiting

 

The "Coveted" Demographic

With the new television season underway, we are being subjected yet again to copy-and-paste reporting about which shows are drawing the biggest ratings from the "coveted 18-to-49 demographic." My question is, why coveted? The income and spending statistics show 18-to-49-year-olds not only making and spending less money than they did before the Great Recession, but making and spending less money than they did a full decade ago. Meanwhile, the spurned 50-and-older demographic is making more, spending more, and growing like gangbusters. Go figure.

 

Mixed Race Population Is Mostly Kids

The median age of the 8 million mixed-race Americans was just 19.2 years, according to the 2010 American Community Survey. Most are not even out of their teens. In contrast, the median age of the U.S. population as a whole was a much older 37.2 years. For the past decade, government surveys have shown that the two-or-more races population is much younger than everyone else. Parents explain the gap. When responding to a census or government survey, parents are responsible for identifying the characteristics of their children under age 18. Many parents of mixed-race children identify their children as being of more than one race. When those children become adults, many opt for a single race identity.

 

Biggest Decline in Homeownership  

since the Great Depression

The nation's homeownership rate fell 1.1 percentage point between 2000 (66.2 percent) and 2010 (65.1 percent), according to the Census Bureau (see Housing Characteristics, 2010). This was the largest drop since the 4.2 percentage point decline that occurred between 1930 and 1940 (the Great Depression). Despite the decline, the 2010 census found the rate of homeownership to be the second highest on record, behind only the rate of 2000. Here's the thing, however: The homeownership rate in 2010 should have been the highest on record, given the demographics. Homeownership peaks among older Americans, and the population has never been older. The decline in homeownership despite the aging of the population shows just how far we have fallen off track.

 

Who's Not Online?

Nearly 24 million households in the United States--or one in five--do not use the Internet, according to the National Telecommunications and Information Administration (see Internet Use 2010). Among those who do not use the Internet, the 58 percent majority say they do not need it. Two-thirds of these householders are aged 55 or older, 64 percent are not in the labor force, and 85 percent do not have children at home.

    

Note: These are a sampling of posts that were published in the past few weeks on Cheryl Russell's Demo Memo Blog. Questions or comments, please contactdemographics@newstrategist.com

BET YOU DIDN'T KNOW

Average age of women having their first baby: 25.1.
Average age of women marrying for the first time: 26.1. 
   
2. Q & A

What Does it Take to be Middle Class?   

 

A lot more than poverty-level income, which the Census Bureau defines as an annual income of $11,344 for one person and $22,113 for a family of four with two children.  

 

For one worker who lives alone, a middle-class lifestyle requires an annual income of at least $30,012 (or earnings of $14.21 per hour), according to the Basic Economic Security Tables (BEST) Index--and that's only if your job provides employment-based health insurance and a retirement plan. If you are a family of four with two workers and two children, you need to earn at least $67,920 ($16.08/hour per worker), assuming employment-based benefits. These estimates are bare bones and do not include eating out, vacations, or other discretionary spending. They do include modest savings toward a rainy day fund and retirement, but no savings for homeownership or college. Among full-time workers in 2010, one-fourth of men and one-third of women earned less than $30,000 per year.   

 

The BEST estimates of what it takes to be middle class were produced in a joint effort by Wider Opportunities for Women and the Center for Social Development at Washington University in St. Louis. They were created to help policymakers and workers evaluate economic security in the United States. The BEST estimates show how much is needed for economic security for 400 family types, from single to double earners with up to six children. The estimates are calculated for workers with or without employer-provided health insurance and retirement benefits.  

 

Perhaps the most interesting aspect of the BEST estimates is the requirement that savings are necessary for economic stability. Emergency and retirement saving, notes the report, "promotes lifelong and intergenerational economic security." A single worker needs to save $75 per month for emergencies. A family of four with two workers and two children needs to save $170 per month to help them weather hard times. To download the study, visit The Basic Economic Security Tables Initiative on the Wider Opportunities for Women web site. 

 

By Cheryl Russell, editorial director, New Strategist Publications. Questions or comments, please contact

demographics@newstrategist.com 

BET YOU DIDN'T KNOW

Among the 206,000 homeowners in the United States who do not have heating equipment, 89 percent live in the West.

Source: Americans and Their Homes
     

 3. Cool Research Links

 

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

 

New Household Income Index      

It's about time. We finally have a monthly, household-level economic indicator. Sentier Research (a venture run by former Census Bureau officials) recently announced that it has developed the Household Income Index indicator. This new indicator is a welcome addition to the woefully inadequate macroeconomic statistics on which most business forecasters depend. Sentier's Household Income Index will track monthly changes in real median household income, based on data from the Current Population Survey. The starting point for the index is January 2000, with median household income in that month set at 100.0.  In June 2011 (the latest data available), the index value had fallen to a much lower 89.4.

 

Demographic Chartbook

If you are yearning for beautiful and insightful graphic representations of long-term demographic trends in the United States, visit this site created by Campbell Gibson. Gibson has a resume packed with three decades of work for the Census Bureau, and it shows. His visualizations of census data from 1790 through 2000 give you an instant feel for trends in demographic topics ranging  from age distributions to metropolitan populations, households, homeownership, fertility rates, educational attainment, language spoken, and more. An Appendix provides data by state. You can examine the Chartbook online or, after registering, download chapters or the entire labor of love onto your computer. This is a great resource for historians and educators.  

 

New 2010 Census Reports    

Last month the Census Bureau released two new 2010 CensusBriefs: The Black Population: 2010, and The White Population: 2010. Each report examines the size and growth of the population since 2000, including those who identify themselves as the race alone and those who identify themselves as the race in combination with other races.  

Blacks: The black alone or in combination population numbered 42 million in 2010 and accounts for 14 percent of the U.S. population. The number of people who identify themselves as black and white more than doubled between 2000 and 2010 (as reported in Demo Memo blog in March, see The Obama Effect on Racial Identification).

Whites: The white alone or in combination population numbered 231 million in 2010, a count that includes 27 million white Hispanics--who may be of any race. The white population also includes Arabs, Palestinians, and North Africans. The non-Hispanic white alone population numbered 197 million in 2010 and accounts for 64 percent of the population.

 

BET YOU DIDN'T KNOW

Percentage who think the American Dream still exists...
Total adults: 58%
Black adults: 76%
 
      
4. Meet Your Customers  

Here are five all new and expanded, one-stop resources for understanding American consumers--vital, cost-effective information in these economically uncertain times. All are available as hold-in-your-hand books or pdf downloads with links to Excel spreadsheets.  

 

· The American Marketplace: Demographics and Spending Patterns, 10th ed. Quick and easy access is the goal of the new 10th edition of The American Marketplace: Demographics and Spending Patterns, your reliable alternative to the threatenedStatistical Abstract. Designed for convenience, The American Marketplace draws on scores of government sources to give you a population profile of the United States in one handy volume. Its hundreds of tables are organized into 11 chapters covering attitudes, education, health, housing, income, labor force, living arrangements, population, spending, time use, and wealth. This edition of The American Marketplace contains the latest 2010 census data by age and sex, as well as population totals for states and metropolitan areas. The book includes attitudinal data from the recently released 2010 General Social Survey. Plus, you get the latest numbers on the changing housing market. Also included are 2010 labor force statistics, and the latest income data. The wealth chapters includes newly released information on what the Great Recession did to net worth, assets, and debts. The spending chapter reveals how spending patterns are changing.

ISBN 978-1-935775-27-0 (hardcover);  

ISBN 978-1-935775-28-7 (paper); 642 pages; June 2011

 

· Americans and Their Homes: Demographics of Homeownership, 3rd ed. The all-new third edition of Americans and Their Homes: Demographics of Homeownership--the first update since 2005--is already creating a buzz in the real estate industry with its look at homeownership and the housing market through 2010. In Americans and Their Homes, which contains 50 percent more information than the previous edition, you get the latest demographic data profiling the nation's homeowners and renters--their age, income, household type, race, Hispanic origin and region of residence. You will also learn about their homes--heating, cooling, kitchen and laundry equipment, purchase price and value, housing costs, and much, much more. New to this edition of Americans and Their Homes is much more data on the demographics of renters and the characteristics of their homes and apartments. As it becomes more difficult to buy and sell houses, renting has become a viable alternative for millions of Americans--especially young adults. Americans and Their Homes shows you who rents and what they rent. Despite the turmoil of the Great Recession, most homeowners still have plenty of equity in their home. But a growing number are underwater. Americans and Their Homesgives you the facts and reveals the trends.

ISBN 978-1-935775-29-4 (hardcover);  

ISBN 978-1-935775-30-0 (paper); 624 pages; June 2011

 

· The Who We Are Series brings you, in three accessible volumes, which can be purchased singly or as a set, the facts you need about the size and characteristics of the country's Asians, blacks, and Hispanics--the most rapidly growing segments of the consumer marketplace. In each volume,chapters examine attitudes, education, health, housing, income, labor force status, living arrangements, population, spending, time use, and wealth (in Blacks and Hispanics only).

New to the second edition of the Who We Are Series is a chapter on the attitudes of Asians, blacks, and Hispanics on issues ranging from happiness and trust in others to religious beliefs, political identification, and support for gay marriage. The population chapter includes 2010 census data showing numbers nationally and by state and metropolitan area. The spending chapter examines how Asians, blacks, and Hispanics prioritize their money, and the time use chapter shows how they prioritize their time. Also included in these volumes is the most recent information on the incomes, labor force participation, educational attainment, college enrollment, and living arrangements of Asians, blacks, and Hispanics. 

· Who We Are Three-Volume Series  

ISBN 978-1-935775-37-9 (hardcover);  

ISBN 978-1-935775-38-6 (paper); June 2011

 

ISBN 978-1-935775-31-7 (hardcover);

ISBN 978-1-935775-32-4 (paper); 290 pages; June 2011

 

· Who We Are: Blacks 

ISBN 978-1-935775-33-1 (hardcover);

ISBN 978-1-935775-34-8 (paper); 312 pages; June 2011

 

· Who We Are: Hispanics 

ISBN 978-1-935775-37-9 (hardcover);

ISBN 978-1-935775-38-6 (paper); 326 pages; June 2011

 

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

BET YOU DIDN'T KNOW

Among Asian workers, 57 percent have a bachelor's degree. 

Source: Who We Are: Asians    


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