American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
May 2012

Are Millennials a Lost Generation?


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

1. Hot Trends

Are Millennials a Lost Generation?   

It is an exaggeration to say Millennials are a lost generation. But there is a large segment of Millennials–perhaps even the majority–who missed out on something important when they were growing up. That something is programming literacy, now as critical for success in the job market as reading, writing, and arithmetic.


Millennials are the first generation to grow up with the Internet. Most are comfortable with Facebook, Twitter, texting, browsing, streaming videos, downloading audios, and shopping online. They are adept at consuming what the Internet has to offer. They are not skilled at producing for the Internet, which is what employers of all sorts now want. To be successful in today’s economy, young workers need to know how to build and maintain web sites, how to market products and services through social networks, how to write and edit code. They need to be literate in the theory and practice of programming.


Millennials know they lack these skills. In the American Freshman Survey, UCLA’s annual probe into the attitudes of college freshmen nationwide, only 38 percent of freshmen say their computer skills are above average. This is a surprisingly honest assessment from these young adults, 71 percent of whom think they are above average in academic ability and 73 percent of whom think they are above average in their drive to achieve.


How did Millennials miss out on acquiring literacy in programming while surrounded by computers and the Internet? They had the bad luck to be born at the wrong time, raised by parents and taught by teachers who at best knew little about computers and the Internet and at worst were dismissive and fearful of their capabilities. The computer illiterate older generation was incapable of instilling in today’s young adults a literacy in programming.


It doesn’t have to be this way. Millennials can acquire literacy, even at this late date. According to the  New York Times, when the organization Fix Young America held a summit recently to discuss solutions to high levels of unemployment among young adults, one of the proposals was a massive, nationwide effort to teach young adults JavaScript, a programming language.


The Problem with High Ceilings

Houses are larger than they used to be and this is a long-term problem for energy consumption, says the Energy Information Administration in its new report, The Impact of Increasing Home Size on Energy Demand.


Homes built in the 1970s and 1980s averaged less than 1,800 square feet. Homes built in the 2000s averaged 2,465 square feet. “Square footage typically stays fixed over the life of a home and it is a characteristic that is expensive, even impractical to alter to reduce energy consumption,” says EIA.


Even worse for energy consumption are the high ceilings in many newly built homes. The percentage of new homes with ceilings higher than the traditional 8 feet grew from 17 percent in the 1970s to the 52 percent majority in the 2000s.


More Young Asians and Blacks

After months of dribbling out, state-by-state, detailed race data from the 2010 census, the Census Bureau finally released Summary File 2 tables for the nation as a whole. What a difference they make in our understanding of the Asian and black populations.


31 Percent More Young Asians The 2010 census counted 15 million people who identify themselves as Asian alone. But there are 17 million people who identify themselves as Asian alone or Asian in combination with other races. And not until today did we know the age distribution of those additional 2 million people. Here’s why that’s important: the 54 percent majority of the additional Asians are under age 20 because so many parents identified their children as multiracial. By including multiracial Asians in the mix, the number of Asians under age 20 expands by 31 percent!


11 Percent More Young Blacks The black population also expands when multiracial blacks are added to the mix. The black alone population numbered 40 million in 2010. The black alone or black in combination population numbered 42 million. Seventy-nine percent of the additional blacks are under age 20. By including multiracial blacks in the mix, the number of blacks under age 20 grows by 11 percent. For marketers, these differences are huge.


No Credit Cards

More than one in four Americans aged 18 or older does not have a credit card, according to the AARP Survey on Budgeting and Credit Card Use. Younger adults are more than twice as likely to be without credit cards than adults aged 50 or older. Here are the percentages without a credit card by age…

  • Total adults: 26%
  • Aged 18-49: 34%
  • Aged 50-plus: 16%

College Enrollment Rates: 2011

The college enrollment rate of recent high school graduates is down slightly from the all-time high of 70.1 percent set in 2009, according to the Bureau of Labor Statistics. Among 2011 high school graduates, 68.3 percent were enrolled in college by October of that year. Sixty-two percent of those enrolled in college were attending a four-year school and 38 percent were at a two-year institution.


Career Women

Women are now more career-oriented than men, according to a Pew Research Center survey. Among 18-to-34-year-olds, 66 percent of women and a smaller 59 percent of men say being successful in a high paying career is very or one of the most important things in their life.


2010 Census: Households and Families

Every ten years the census asks the residents of every household in the country about their living arrangements. The Census Bureau recently released a 2010 census brief analyzing those results (See Cool Links below for more about this). Surprisingly, despite the economic dislocations of the Great Recession, household size fell during the decade and multigenerational households still account for only a tiny fraction of the total. These are some of the most important findings…

  • Married couples account for fewer than half of households (48 percent).
  • The number of nuclear families (married couples with children under age 18) fell by 1.2 million between 2000 and 2010, to 23.6 million households (20 percent of total households).
  • People living alone are a larger share of households (27 percent) than nuclear families. They are the second most common household type after married couples without children under age 18 at home (28 percent).
  • Unmarried partner households grew by 41 percent to 7.7 million (7 percent of total households). Of these, 646,000 are same-sex unmarried partners.
  • Ten percent of married couples have partners of a different race or Hispanic origin.
  • Average household size fell slightly, from 2.59 people in 2000 to 2.58 people in 2010.
  • Multigenerational households (defined as households with three or more generations of relatives) grew from 3.9 million to 5.1 million between 2000 and 2010 and account for 4 percent of households.

Retirement: Expecting the Worst

Only 38 percent of Americans who are not yet retired expect to have enough money to live comfortably in retirement, according to a Gallup poll. Fully 55 percent say they will not have enough money for a comfortable retirement.


Homeownership Rates in 2012

Overall, 65.1 percent of households owned their home in the first quarter of 2012, according to the Census Bureau. The homeownership rate fell 1 percentage point between the first quarters of 2011 and 2012.

  • Between 2011 and 2012, the homeownership rate fell in all but one age group, the lone exception being householders aged 70 to 74. But the increase in homeownership among 70-to-74-year-olds was within the margin of error.
  • The biggest decline in the homeownership rate over the past four quarters has been among householders aged 35 to 39, their rate falling by 4.4 percentage points to 56.4 percent.
  • Fewer than half of householders aged 30 to 34 are homeowners (48.3 percent, down from an annual high of 57.4 percent in 2004), and their sharply lower homeownership rate is being carried into the next older age group as they enter their late thirties.
  • The only good news for the housing industry is the apparent stability in the homeownership rate of householders aged 25 to 29. At 34.2 percent in the first quarter of 2012, the homeownership rate of this age group has barely budged for the past three quarters. Historically (with data going back to 1982), the annual homeownership rate 25-to-29-year-olds bottomed out at 33.6 percent in 1992 and 1993 and peaked at 41.8 percent in 2006.

How Many Have Pre-Existing Conditions?

Most of us. Depending on how pre-existing conditions are defined, as many as 122 million adults aged 19 to 64 have a health condition that can limit their access to the private health insurance market, according to a GAO report. That’s 66 percent of the working-age population.


Today, in most states, private health insurers can deny coverage to those with pre-existing conditions. The Affordable Care Act will eliminate this problem beginning in 2014 by requiring health insurance companies to cover everyone regardless of health status. Only five states now offer this kind of protection to their residents: Maine, Massachusetts, New Jersey, New York, and Vermont. Everywhere else, you’re on your own.


Who is most at risk in this Wild West health insurance saloon? All of us. Among people aged 19 to 64, the GAO reports that pre-existing conditions can be found in as many as…

  • 72% of women
  • 59% of men
  • 84% of 55-to-64-year-olds, 74% of 45-to-54-year-olds, 65% of 35-to-44-year-olds, 55% of 25-to-34-year-olds, and 45% of 19-to-24-year-olds
  • 72% of non-Hispanic whites, 59% of blacks, and 51% of Hispanics

Entrepreneurship Declines

This isn’t rocket science. In a nation that seems hell bent on making it difficult if not impossible for individuals to buy health insurance, entrepreneurship is nearly extinct.

According to the Kauffman Index of Entrepreneurial Activity, only 0.32 percent of adults started a business in 2011, down 5.9 percent from the level of 2010. Demographically speaking, the entrepreneurs of today have nothing left to lose. By educational level, high school dropouts are most likely to start a business. Least likely: college graduates.


Brace Yourself

Let’s connect the dots between unemployment, retirement, and the future of consumer spending.


Unemployment In April, the unemployment rate fell slightly (to 8.1 percent), despite weak job growth (a gain of 115,000 jobs). Unemployment fell because hundreds of thousands of people dropped out of the labor force.


Retirement The labor force is shrinking in part because the large baby-boom generation is beginning to retire en masse. A MetLife survey reports that 45 percent of the oldest boomers (who turned 65 in 2011) are already fully retired. Yes, boomers say they are going to postpone retirement, but not for long according to a  University of Michigan study. The Michigan study examined how the Great Recession affected the retirement plans of Americans aged 50 or older. The results show that the average household headed by an older American lost 5 percent of its wealth between 2008 and 2009. This should result in an additional 3.7 to 5.0 additional years of work to make up for the loss. Instead, those postponing retirement are planning to work only for an additional 1.6 years, live on less, and leave less for their heirs.


Spending The baby-boom’s retirement will dampen consumer spending for years to come and will reduce the wealth of younger generations, who will inherit less.


These are a sampling of posts published in the past few weeks in Cheryl Russell’s Demo Memo blog. Please send questions or comments to


Average annual household spending on movie, theater, and amusement park tickets by age of householder…

Under age 25: $79.15
Aged 65-plus: $93.10


2. Q & A

Who Are the Plurals?   

The naming of generations is the sport of marketers. It is also serious business, not just for companies looking for customers but for the rest of us as well. A generation’s name is an attempt to identify the shared characteristics of a group of people. By naming the generations, we get a better sense of the chaotic jumble of 300-million-plus diverse and individualistic Americans.


The youngest Americans–the current crop of children–have been a generation looking for a name. There have been lazy attempts to name them, such as “Generation Z.” And there have been more serious attempts, such as the iGeneration, so dubbed by New Strategist Publications for the past few years. Now, the market research firm Magid Generational Strategies has added muscle to the naming business. Magid surveyed children and their parents, people ranging in age from 8 to 66, then pondered the findings. The result is a new name for the youngest Americans: The Pluralist Generation, but you can call them Plurals.


Plurals are today’s 67 million children aged 15 or younger in 2012–born in 1997 or later. Only 55 percent are non-Hispanic white, making them the last generation with a non-Hispanic white majority. “This unprecedented transition to a multicultural, pluralistic society will be a major aspect of their lives,” says Magid. The pluralistic features of the society in which today’s children are growing up extend from race and ethnicity to sex roles, sexual orientation, religion, family life, communication, politics, and media. The Plurals, says Magid, are the children of Gen Xers and reflect Gen X’s different parenting style, which is more individualistic than group-oriented Boomers who raised Millennials. Reports Magid: “Those differences will only increase over time and solidify a new mindset separating Plurals from Millennials.”


Magid offers a free white paper about the Plurals: The First Generation of the Twenty-First Century–An Introduction to the Pluralist Generation. 


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


Change in median income of households headed by college graduates, 2000 to 2010 (in 2010$): -10%.

Source: American Incomes

3. Cool Research Links

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


Households and Families 2010

The recently released census brief, Households and Families: 2010, is available at the above link. It is chock full of interesting data about the living arrangements of Americans. The report’s tables show 2010 households by type, race, and Hispanic origin; household relationships by age; households by state in 2000 and 2010; unmarried partner (opposite and same sex) households by state; multigenerational households by state; and mixed-race/ethnicity couples by state.


Access to Health Care by State

Americans’ access to medical care has deteriorated during the past decade, says the Urban Institute in a new study available at this link. Among adults aged 19 to 64, access to care fell in most states between 2000 and 2010. The percentage with unmet health care needs due to cost increased in 42 states during those years. The percentage who received a routine checkup fell in 37 states, and the percentage with a dental visit fell in 29 states. Access to care was much lower and the deterioration in access was much greater for the uninsured. The report details the percentages by state and how the numbers have changed since 2000.


Health Insurance Trends

For a look at trends in health insurance access and coverage among workers aged 18 to 64, see the new report by the Employee Benefit Research Institute, Employment-Based Health Benefits: Trends in Access and Coverage, 1997-2010, available at this link. The percentage of workers covered by their employer’s health insurance plan fell from 60.3 percent in 1997 to 56.5 percent in 2010.


Working Parents, 2011

Most married couples with children are dual-earner couples. The Bureau of Labor Statistics tracks this trend, and the latest numbers are available at this link. Among married couples with children under age 18 in 2011, 58 percent were dual-earner, and the father only was employed in 30 percent. Also available at this link is a table showing employment and unemployment in families by type and labor force participation of mothers by marital status and age of youngest child.

Who buys? What do they buy? How much do they spend?

Get the dollar-for-dollar answers you need to succeed in today’s tough economy from these one-stop resources


The annual spending data in Household Spending: Who Spends How Much on What, the first edition of which was published in 1991, allow you to compare and contrast spending by a host of demographic characteristics so you can determine market potential and the dollar size of each market, identify your best customers, and understand which segments account for the largest share of spending. New to the 16th edition are intriguing results of how the nation’s spending habits have changed because of the Great Recession, with comparisons of spending trends between 2000-06 and 2006-09.


American Incomes: Demographics of Who Has Money has the 2010 income data you need to stay competitive in an unpredictable economy. It is a one-stop resource for understanding the economic status of Americans–how the incomes of men and women are changing, which households have money left over after paying for necessities (valuable discretionary income figures calculated just for this book), who is wealthy, and who is poor. New to the 8th edition are detailed estimates that show trends in discretionary income and spending. And the chapter on wealth shows the effects of the Great Recession on household assets and debt.


In the new 8th edition of Best Customers: Demographics of Consumer Demand, experts and novices alike can see at a glance who spends the most and who controls the largest market share–often surprisingly different–on over 300 products and services organized into 21 chapters that focus on entertainment, groceries, transportation etc.–everything a consumer might buy. Based on unpublished data–you can’t find this on the Internet–from the Bureau of Labor Statistics’ invaluable Consumer Expenditure Survey, Best Customers brings you insight into household spending by householder age, income, household type, race and Hispanic origin of householder, region of residence, and educational attainment.