American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
April 2006

A Tale of Two Age Groups


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

1. Hot Trends 

A Tale of Two Age Groups

Or Why the Rising Fortunes of 55-to-64-Year-Olds May Not Be Good News

This is a tale of two age groups, the one overcome by a wave of economic change and the other triumphantly riding the wave–or so it may seem.

Tumbling in the wave of economic change are the 35-to-44-year-olds, the age group now filled with the youngest baby boomers and the oldest generation Xers. (This year boomers span the ages from 42 to 60 and Xers are aged 30 to 41). Those riding the wave are the 55-to-64-year-olds, the age group filling with the oldest boomers.

The socioeconomic trends among 35-to-44-year-olds are grim:

  1. Men’s incomes are shrinking: The median income of men aged 35 to 44 not only was lower in 2004 than in 2000, it also was 3 percent below the level of 1990, after adjusting for inflation. In contrast, the median income of the average man rose 7 percent between 1990 and 2004, according to the Census Bureau’s Current Population Survey.
  2. Household net worth is declining: The net worth of households headed by 35-to-44-year-olds fell 16 percent between 2001 and 2004, after adjusting for inflation–the only age group to lose ground during these years, according to the Federal Reserve Board’s Survey of Consumer Finances.

In contrast, take a look at the trends among 55-to-64-year-olds:

  1. Men’s incomes are growing: The median income of men aged 55 to 64 grew nearly twice as fast as the average between 1990 and 2004 (up 13 percent) and even grew 5 percent between 2000 and 2004.
  2. Household net worth is rising: The net worth of households headed by 55-to-64-year-olds increased by an impressive 29 percent between 2001 and 2004, after adjusting for inflation–the greatest gain among age groups and far above the paltry 1.5 percent gain for the average household during those years.

But 55-to-64-year-olds may be riding a wave into a rocky shore. Behind their growing incomes and net worth is greater labor force participation as pension benefits shrink and retirement recedes. The labor force participation rate of men in the age group rose 2 percentage points (from 67 to 69 percent) between 2000 and 2005. Among women aged 55 to 64, the labor force participation rate rose even more (from 52 to 57 percent) as career-oriented boomers filled the age group.

Working more because retirement benefits are shrinking (a de facto pay cut) is not good news for the millions without substantial retirement savings, although it will delay by a few years the rocky landing that lies ahead.

By Cheryl Russell, editorial director, New Strategist Publications
If you have any questions or comments about the above editorial, e-mail New Strategist at


Hispanics accounted for only 6 percent of voters in the 2004 presidential election.

2. Q & A

Why Worry about Health Insurance?

At first glance, the latest estimates of health insurance coverage appear reassuring (see According to ongoing surveys by the National Center for Health Statistics, between 1997 and 2005 the percentage of Americans without health insurance at the time of the survey declined from 15 to 14 percent. The percentage of adults aged 18 to 64 without insurance stood at 19 percent in both these years, while the percentage of children under age 18 without insurance fell from 14 to 9 percent. (Medicare covers nearly everyone aged 65 or older.)

But if you dig more deeply into the latest numbers, the alarms start to go off. The health insurance coverage rate has remained stable only because a growing share of people are getting their insurance through public rather than private (mostly employer-provided) plans. The percentage of children covered by public health insurance climbed steeply between 1997 and 2005, rising from 21 to 30 percent. The percentage of working-age adults covered by public insurance rose from 10 to 12 percent.

Dig even deeper and you arrive at the crux of the problem. Adults with incomes near the poverty level are flooding the public health insurance system as the cost of employer-provided and other private health plans spirals beyond their reach. The percentage of near-poor adults aged 18 to 64 with private health insurance coverage plummeted from 53 to 44 percent between 1997 and 2005. (The near poor are defined as those with incomes between 100 and 200 percent of the poverty level.) The percentage of near poor with public health insurance climbed from 15 to 21 percent during those years. (Among their poor counterparts, the percentage with public health insurance grew more slowly, rising from 34 to 37 percent).

Among the nonpoor (those with incomes more than twice the poverty level), the private health insurance coverage rate fell only slightly, from 87 to 85 percent between 1997 and 2005. But how long will it be before even the solidly middle class cannot afford private health insurance? With the federal government threatening to pare back spending on public insurance, millions of Americans may soon join the ranks of the uninsured. The near poor may be the canary in the coal mine, signaling the imminent breakdown of our health insurance system.

If you have any questions or comments about the above Q & A, e-mail New Strategist at


Fifty-eight percent of husbands earn at least $5,000 more than their wives.

3. Cool Research Links

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful web sites:
This is a cool study, but one you with which you might disagree. Research from the Federal Reserve Bank of Boston shows that men and women are working less than they once did. Mark Agular, a senior economist at the Boston bank, and Erik Hurst of the University of Chicago examined time use over five decades and found that men and women work less and play more. Their study, “Measuring Trends in Leisure: The Allocation of Time over Five Decades,” documents the decline in hours spent working by nonretired men and women aged 21 to 65 between 1965 and 2003. Although women in 2003 worked more than those in 1965, the authors show the increase in women’s work hours has been more than offset by the decline in the time they spend doing housework. During the same period, men’s work hours declined, although the drop was offset somewhat by an increase in the amount of time they spent doing housework. Overall, the amount of time men and women spend in market (paid) work has dropped from 34.24 to 33.01 hours per week, a decline of 1.23 hours. The amount of time men and women spend doing household chores has dropped from 23.52 to 18.00 hours, a decline of 5.52 hours since 1965. Total hours of work per week, then, have fallen (and leisure increased) by an average of 7.60 hours among men and 6.44 hours among women.
This site is the federal government’s central repository of data on the demographics of the labor force. Here you can access just about everything you would want to know about the labor force topics that are making headlines, such as working mothers, the decline in long-term employment, the characteristics of minimum wage workers, and a comparison of the unemployment rates of native- and foreign-born workers. The site also provides access to the Bureau of Labor Statistics’ annual average employment tables (also published in Employment and Earnings). One interesting nugget from the site: The unemployment rate of blacks born in the United States (10.7 percent) is nearly double the unemployment rate of the foreign-born (5.5 percent). Even the foreign-born without a high school diploma have a lower unemployment rate (7.0 percent) than blacks.


Two percent of households purchased a new car or truck during an average quarter of 2003, spending $25,402.


Books and reports from New Strategist are here to help you with your research on American consumers. Order online at, call toll free at 800/848-0842, or fax your order to 607/277-5009. The books and reports can be downloaded or ordered in hardcopy.

The U.S. population is growing more diverse much faster than many had predicted. To help you keep up, the new, fifth edition of Racial and Ethnic Diversity: Asians, Blacks, Hispanics, Native Americans, and Whites includes, in addition to detailed estimates and projections of the U.S. population by race and Hispanic origin, the latest socioeconomic data on blacks and Hispanics and more comprehensive information on Asians and American Indians. (Racial and Ethnic Diversity, 5th ed.; 1-885070-71-3; hardcover; 696 pgs.; $94.95)

Updated editions of American Men: Who They Are and How They Live and American Women: Who They Are and How They Live record the many dimensions of men’s and women’s lives as the twenty-first century unfolds. New in these editions are more details on the characteristics of Asians, the latest labor force projections from the Bureau of Labor Statistics, and up-to-date population projections from the Census Bureau. (American Men, 2nd ed.; 1-885070-72-1; hardcover; 344 pgs.; $89.95; American Women, 3rd ed.; 1-885070-73-X; hardcover; 360 pgs.; $89.95)

Knowing how consumers spend their dollars is the key to understanding where our economy is headed. The tenth edition of Household Spending: Who Spends How Much on What is for those who want to know the who, what, and why of household spending. New to this edition are detailed spending tables for Asian households. Also new are detailed spending tables for households with incomes of $100,000 or more–up to $150,000 or more. (Household Spending, 10th ed.; 1-885070-87-X; hardcover; 656 pgs.; $94.95)

Finally, be sure to check out the popular Who’s Buying series, which has been updated and expanded. New to the series is Who’s Buying by Race and Hispanic Origin, which includes the first available spending data for Asian households. Also new is Who’s Buying: Executive Summary of Household Spending, a good choice for researchers who want to understand the big picture of where the money goes and how demographics affect spending.

Go to to see detailed tables of contents, download books, or order hardcopies.


Among homeowners with a mortgage, the outstanding balance is $82,010.


The Who’s Buying series of reports, which are based on the tenth edition of Household Spending: Who Spends How Much on What, bring you even more detail about how much Americans spend by the demographics that count–age, income, household type, race and Hispanic origin, region of residence, and education. To round out the picture, each report also presents who-are-the-best-customers analyses of the data, showing at a glance the demographics of household spending product by product.

The Who’s Buying series includes:

  • Who’s Buying Alcoholic and Nonalcoholic Beverages, 2nd ed.
  • Who’s Buying Apparel
  • Who’s Buying at Restaurants and Carry-Outs, 3rd ed.
  • Who’s Buying by Race and Hispanic Origin
  • Who’s Buying Entertainment, 2nd ed.
  • Who’s Buying: Executive Summary of Household Spending
  • Who’s Buying for Pets, 2nd ed.
  • Who’s Buying for Travel, 2nd ed.
  • Who’s Buying Groceries, 3rd ed.
  • Who’s Buying Health Care, 2nd ed.
  • Who’s Buying Household Furnishings, Services, and Supplies, 3rd ed.
  • Who’s Buying Information Products and Services, 2nd ed.
  • Who’s Buying Transportation, 2nd ed.

If you need the big picture for items ranging from wine to cell phones, from pet food to sofas, go to to see detailed tables of contents and to order downloads or hardcopy.



Only 53 percent of the cost of dental care is covered by insurance.