American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
December 2004

The Social Security Trap

3. Cool research links: STATISTICAL ABSTRACT, HEALTH U.S.
5. More from New Strategist: NEW WHO’S BUYING REPORTS



Fifty-three percent of Americans agree with the statement, “Those in need have to learn to take care of themselves and not depend on others.”


The Social Security Trap

The baby-boom generation is walking into a trap, one set by those who want to “privatize” the system, enriching Wall Street at the expense of Main Street. The spin on this issue started harmlessly enough, by subtle and not-so-subtle suggestions that the baby-boom generation does not deserve the nation’s support in old age. Boomers are too numerous, rich, and spendthrift for the rest of America to bother with them. Often, these comments come from boomers themselves– lending them an authority they do not deserve. The most recent and egregious example appeared in a New York Times op-ed piece on December 1, when John Kasich, former Republican congressman from Ohio, commented: “Our country’s greatest legacy is that one generation sacrifices for the next. These people [the older generation] have already made their sacrifices on behalf of the baby boom generation. Now it’s our turn.”

Kasich has it backward, however. Today’s workers sacrifice for today’s retirees, not the other way around. For years, boomers have been paying into the Social Security system, sacrificing without complaint a large portion of their hard- earned dollars to care for the older generation. They have paid much more into Social Security than their parents ever did, allowing the current older generation to retire at a younger age than any previous cohort and to become the most affluent older generation in American history.

Most boomers accept the fact that they won’t be able to retire as young as their parents or live as well in old age. But they must draw a line in the sand and refuse to accept the notion that younger generations should not have to sacrifice for them. Social Security benefits have already been trimmed for boomers, those born in 1960 or later being ineligible for full Social Security benefits until age 67. The much-ballyhooed increase in life expectancy, used to justify this change, is mostly illusory. Sure, life expectancy at age 65 has grown over the past 50 years, but only by four years. And those extra four years are not necessarily hale and hearty ones. Much of the gain in life expectancy at older ages springs from better management of chronic diseases, which allows people to live with their disabilities rather than die from them. Twenty-six percent of people aged 65 to 74 are limited by chronic conditions. Fifty percent have high blood pressure. Forty-five percent have arthritis. Thirty percent have hearing problems. Many cannot stand for as long as two hours or walk a quarter of a mile.

Those who imply that boomers don’t deserve Social Security because they are spendthrifts don’t know the facts. Boomers have been making do with less for years. The median income of men aged 45 to 54 (the age of the oldest boomers) is lower today than it was in 1990, after adjusting for inflation. At the same time, boomers have had to cope with the disappearance of the defined-benefit pension plan, skyrocketing health insurance costs, soaring housing prices, and college tuition hikes that far outpace inflation. Boomers responded to these hits by cutting their everyday spending. Between 1990 and 2000, the average spending of households headed by 45-to-54-year-olds fell 5 percent, after adjusting for inflation. Few boomers live on credit, either. Mortgages account for most of boomer debt. Only half of households headed by 45-to-54-year-olds carry a balance on their credit cards, and among those who do the median balance is a modest $1,900.

After decades of living on diminished wages and paying outsized bills to support both older and younger generations, boomers now learn from the privatizers that the nation can’t afford them in old age. The Social Security system will break under the weight of boomers, they explain, and so must be dismantled to save it. The fact is, however, that the Social Security system faces only a temporary challenge as the pig passes through the python. It doesn’t need more than a tweaking to get past the boomer bulge. The program won’t begin to spend more than it takes in until 2052, according to the Congressional Budget Office. Even after that, it can meet 71 to 81 percent of its obligations through 2100 with no changes whatsoever. The biggest problem facing Social Security is not unworthy boomers, but the federal budget deficit, which is the direct result of recent tax cuts. But rather than fix the deficit problem, the privatizers want boomers to take it on the chin.

“Somehow we’re going to have to fix Social Security so the baby boom generation doesn’t imprison its children in a fortress of debt,” warns New York Times columnist and sometime boomer basher David Brooks (December 4, 2004). Maybe the children of boomers should be asked which prison they prefer one shared by society as a whole in the form of taxes or solitary confinement with mom and dad in the spare bedroom.

By Cheryl Russell, editorial director, New Strategist Publications

For more on American incomes and spending, see the new fifth edition of American Incomes: Demographics of Who Has Money and the just- published ninth edition of Household Spending: Who Spends How Much on What. Both are available in hardcopy and as downloads.

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



The median income of men aged 45 to 54 fell from $41,368 to $40,969 between 1990 and 2002, after adjusting for inflation.


Q: How much money do Americans give away?

A: The average household gave $739 in cash to charities, religious organizations, political groups, and educational institutions in 2002 according to the Consumer Expenditure Survey. Most of the money–fully 75 percent–goes to churches and other religious organizations. Only 19 percent ($138) of Americans’ charitable giving is earmarked for charities. Educational organizations account for 5 percent, and political organizations get just 1 percent.

The biggest givers are older householders. Those aged 65 to 74 gave away $1,073 in 2002. In contrast, householders under age 25 gave away just $166. Those trying to raise funds will find most of their donations coming from householders aged 55 or older. This age group accounts for 50 percent of cash gifts to charities, 52 percent of giving to educational institutions, and 64 percent of giving to political organizations. Older Americans account for a smaller 41 percent of cash donations to religious organizations, however.

Not surprisingly, college graduates give nearly three times as much as the average household to educational institutions. Black householders give just as much to religious organizations as whites. Cash gifts to charities are 20 to 31 percent above average among households in the Northeast and West, and downright miserly in the South (34 percent below average). Cash contributions to religious organizations are 8 percent above average among household in the South, however, and 34 percent below average in the Northeast.

Charitable giving has grown over the past five years, perhaps in response to the 9/11 terrorist attacks. Between 1997 and 2002, cash contributions to charities grew by 20 percent, after adjusting for inflation. Cash contributions to religious organizations rose an even larger 27 percent. Educational and political giving also increased during those years.

For more about the spending of American households on items ranging from accounting fees to white bread, see the new ninth edition of Household Spending: Who Spends How Much on What, available in hardcopy and as download from

If you have a question or comment, contact Cheryl Russell at



The average household spent $1,036 on gifts for non-household members in 2002, 11 percent less than in 1999.


To keep up-to-date on ever-changing American demographics and lifestyles, check out these useful web sites: statab/www/

For those who want to know a little something about everything, the Census Bureau has just released its latest Statistical Abstract, available as a free download from this site. The Statistical Abstract of the United States: 2004- 2005 includes 68 new tables covering topics such as cell phone use and asset ownership rates for households. Some of the interesting tidbits in the new Abstract are: The average cell phone call lasts 2.87 minutes, and the average monthly bill is $49.91. The median sales price of existing single-family homes is $170,000. And the number of Americans traveling abroad fell from 60.9 million in 2000 to 56.4 million in 2002. hus.htm

Another plus for number crunchers is the recent release of Health, United States, 2004, a perennial favorite from the National Center for Health Statistics. The book can be downloaded free from this site and is easily navigated through interactive links designed for users with high-speed Internet connections. Links to outside web sites are shown in red; links within the .pdf file in blue. These links allow users to click from the table of contents to individual tables, then to information and resources in the appendices. Each trend table includes a link to a spreadsheet version of the table, in which users can perform custom analyses and create graphs.



Among poor people aged 16 or older, 11 percent work year-round, full- time.


4. NEW FOR 2004-2005:

 The three-volume American Money Series, plus a long-awaited new edition of American Attitudes. Order online at , call toll free at 800/848-0842, or fax your order to 607/277-5009.

Household Spending: Who Spends How Much on What, 9th ed. If Americans buy it, you can probably find out how much they’re spending on it in the all-new ninth edition of Household Spending, which is based on unpublished data collected by the Bureau of Labor Statistics. New to this edition is the inclusion of a free CD containing a .pdf file of the entire book so you can keep its valuable spending data on your hard drive in addition to your bookshelf. (744 pgs., hardcover, ISBN 1-885070-67-5)

Best Customers: Demographics of Consumer Demand, 3rd ed. Best Customers analyzes household spending on more than three hundred products and services. It identifies the best and biggest customers for each item, examines spending patterns over the past few years, and predicts future trends based on changing demographics. (768 pgs., hardcover, ISBN 1- 885070-75-6)

American Incomes: Demographics of Who Has Money, 5th ed. American Incomes explores and explains the economic status of Americans and includes an analysis of discretionary income produced by New Strategist’s statisticians specifically for this book. Library Journal liked the first edition of this valuable book so much that it selected it as a Best Reference Source. (416 pgs., hardcover, ISBN 1-885070-68-3)

AMERICAN ATTITUDES: What Americans Think about the Issues That Shape Their Lives, 4th ed. American Attitudes presents a historical look at how our thinking has changed since the 1970s on a variety of subjects such as abortion, gun ownership, political party identification, the role of government, and sexual attitudes and behavior. The data in American Attitudes come from the General Social Survey of the University of Chicago’s National Opinion Research Center. Until publication of this book, the valuable and fascinating results of the GSS have not been easily accessible beyond academic circles. (360 pgs., hardcover, ISBN 1-885070-43-8)



The Who’s Buying series of reports, which are based on the new ninth 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 new and expanded Who’s Buying series includes:

  • Who’s Buying Health Care
  • Who’s Buying Household Furnishings, Services, and Supplies, 2nd ed.
  • Who’s Buying Transportation
  • Who’s Buying Information Products and Services
  • Who’s Buying for Pets, 2nd ed.
  • Who’s Buying at Restaurants and Carry-Outs, 2nd ed.
  • Who’s Buying for Travel
  • Who’s Buying Alcoholic and Nonalcoholic Beverages
  • Who’s Buying Entertainment
  • Who’s Buying Groceries, 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.



Householders under age 25 cut their spending on landline phone service by 71 percent between 1997 and 2002, after adjusting for inflation.