American Consumers Newsletter

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

The American Nightmare



1. Hot Trends

The American Nightmare

Millions of Americans cannot believe what is happening to them, and with good reason. Most of the nation’s working-aged population (anyone under age 45) has never experienced a recession this bad, including many of the business executives who have steered their companies into bankruptcy. The last severe economic downturn–at least equivalent to what we are experiencing today–occurred in the early 1980s. Consequently, too many Americans thought the good times would just keep on rolling: the value of their home would only increase, the stock market would be a safe place to park their college and retirement savings, and there was little chance they would lose their job.

The results of a 2009 MetLife survey reveal the grim consequences of that kind of magical thinking. The survey finds that many Americans have no safety net, so confident were they in a prosperous future. An astonishing 28 percent of currently employed workers say they would not be able to pay their bills after less than two weeks of unemployment. Within a month, half of American workers say they would be unable to meet their financial obligations.

This lack of a Plan B explains why the country is in such a panic. The 56 percent majority of the employed are concerned that they could lose their job in the next year, according to MetLife. Fifty-nine percent of the employed fear that if they lose their job, they might have to file for bankruptcy. An even larger 64 percent of employed homeowners are afraid that a spell of unemployment will mean the loss of their home. Overall, three out of four respondents admit that they lack an adequate safety net. Welcome to the American Nightmare.

Although the pundits often scold Americans for being too deeply in debt, in fact debt is not the problem. The average household owes a relatively modest amount, according to the Federal Reserve Board’s Survey of Consumer Finances. The problem is the precarious income stream that keeps so many families afloat–an income stream now threatened by the deepest recession in a generation. If the stream dries up, as it is for many, then debt becomes a problem because there is no backup plan.

Are we finally learning a lesson? Will we be humbled by the hard times? Not likely. The freewheeling cowboy culture is too deeply ingrained in the American psyche. To see it in all its glory, take a look at a new study from the Economic Mobility Project. This organization, which tracks the economic mobility of the American population, fielded a survey in late January and early February–a time when you might think the public would be chastened by events. But you would be wrong. Rather than rethinking the rules of the game, most Americans are still cheerleaders for the American Dream–even as it turns into a nightmare. When asked to define the Dream, the top three qualities mentioned by survey respondents were the freedom to accomplish anything (74 percent), the freedom to do what you want (68 percent), and children being better off financially than you (64 percent). Huh? Aren’t those the same Anything Goes, Me First, and Bigger is Better ideals that got us into this mess?

Even now, Americans overwhelmingly credit success to individual characteristics rather than structural factors. Hard work and ambition are the top two factors behind success, say 89 to 92 percent of us. Fewer than half think people get ahead because they are born into the right family, know the right people, or are just plain lucky. And what about the poor wretches on whom hard times have fallen? They should not look to their fellow Americans for sympathy. The largest share of the public, including both conservatives and liberals, say the downward mobility so many are experiencing is due to “poor life choices.” In other words, it’s not the economy, stupid.

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


Percentage of husbands who make less than their wives: 26.

2. Q & A

Another Baby Boom?

In 2007, a record 4,317,000 babies were born in the United States. It took exactly 50 years to break the old record of 4,308,000 established in 1957. So the answer is no, we are not in the midst of another baby boom. Here’s why.

For one thing, the U.S. population has almost doubled since 1957, climbing from 152 million to 302 million–yet only now have American women managed to produce slightly more babies than they did half a century ago. The average woman of 1957 could expect to have 3.77 children in her lifetime. Today, the average woman will have only 2.12.

The fertility rate of 1957 was 122.9 births per 1,000 women aged 15 to 44. Today the fertility rate is just 69.5. Granted, today’s figure is higher than the all-time low of 63.6, which we hit in 1997, but the increase is due more to the changing demographic composition of American women than it is to a new baby boom.

Hispanics account for a growing proportion of women aged 15 to 44, and Hispanic fertility is far above average. In 2007, the Hispanic fertility rate was 102.1–not far below the average fertility rate of 1957. Among non-Hispanic whites, in contrast, the 2007 fertility rate was just 60.1. Hispanics account for one in four births in the United States today. Of the 52,000 additional babies that put us over the top in 2007, 44 percent were Hispanic, 27 percent were Asian, 19 percent were black, and 7 percent were non-Hispanic white.

By Cheryl Russell, editorial director, New Strategist Publications. For more information about births in 2007, see the National Center for Health Statistics report, Births: Preliminary Estimates for 2007. If you have any questions or comments about the above Q & A, e-mail New Strategist at


Percentage of spending on professional dry cleaning accounted for by households with incomes of $100,000 or more: 55.

3. Cool Research Links

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

American Religious Identification Survey
The Census Bureau is prohibited from collecting information about the religious affiliation of Americans, which results in a dearth of official information about Catholics, Baptists, and other religious groups in the United States. Every few years, the American Religious Identification Survey (ARIS) fills the void. At this site you can access the survey, with information on the size, geography, and demographic characteristics of various religions. Catholics continue to be the largest single religious group (25 percent of the population), followed by Baptists (16 percent). Third in size are Americans without a religion (15 percent), followed by Methodists (5 percent) and Lutherans (4 percent).

2008 General Social Survey
If you are brave enough to venture into the world of online data extraction, then you can begin to explore the just released 2008 General Social Survey results at this link. Use the “search” function to determine the variable name of the question for which you want an answer. For example, “life” is the variable name for the question “Do you find life exciting, routine, or dull?” Filter the answer by demographic characteristic (again, you must use the “search” function to determine variable names) and specify the year 2008. Then run the table. Here is the result: 47 percent of Americans said life was exciting in 2008 and 48 percent found it routine. Apparently, even the near collapse of the financial markets is not enough to raise the blood pressure of nearly half of us.

Who Cares about Newspapers?
The Internet and the economic downturn are taking their toll on the nation’s newspapers, with one daily after another going out of business. According to a Pew Research Center survey, accessed at the above link, many people don’t care about newspapers–which probably explains why so many dailies are in trouble. According to the survey, only 33 percent say they would miss their local newspaper “a lot” if it closed. There are big differences by age, however. Just 23 percent of people under age 40 would be bothered a lot versus the 55 percent majority of people aged 65 or older.


Biggest spenders on private elementary and high school tuition: Asians.

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 PowerPower presentations.


Percentage of women who are not afraid to walk alone at night in their neighborhood: 55.