American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
April 2013

To Infinity and Beyond!


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

1. Hot Trends 

To Infinity and Beyond!    

What does the future hold for the nation’s young adults? Are they doomed to spend their lives toiling in unstable, low-paying jobs, or will technology come to the rescue and elevate them into a new middle-class built on Internet rather than Industrial Age skills?

In their insightful paper, Smart Machines and Long-Term Misery, economists Laurence J. Kotlikoff and Jeffrey D. Sachs argue that a bleak future may be in store. Smart machines, they say, are substituting for young unskilled labor, and our children and grandchildren will be worse off as the wages of unskilled young adults decline. They present a model of how this works, and certainly the income trends back them up.


But wait a minute. Aren’t young adults the tech-savvy generation? Well yes, but here’s the problem: a subset of the young is tech savvy, the leading edge of Internet development and highly rewarded for their skills. A larger segment of young adults, however, has been raised and educated to be tech consumers rather than producers and now faces a lifetime of low wages as ever-smarter machines substitute for their labor. These impoverished younger generations are being created even as we speak because our society (older generations) has been more concerned with protecting children from the Internet than making sure children can produce for the Internet. Learning to program is as necessary for unskilled labor in the Internet Age as reading, writing, and arithmetic were to unskilled labor in the Industrial Age.


Employment Decline in  

the Information Industry

Just how the Internet will rescue the middle class remains to be seen. So far, employment trends seem to be bearing out the dire predictions of Kotlikoff and Sachs (see above). Employment in the information industry peaked in 2000 at 3,630,000, according to an analysis by the Bureau of Labor Statistics. In 2011, the information industry employed 2,659,000–a loss of nearly 1 million jobs.


Behind the decline in information industry employment is job loss in traditional publishing (books, newspapers, magazines, directories) and telecommunications (wired and wireless). The Bureau of Labor Statistics defines the information industry as establishments that 1) produce and distribute information and cultural products, 2) provide the means to transmit or distribute these products as well as data or communications, 3) process data. Between 2000 and 2011, the number of jobs in newspaper publishing fell from 422,600 to 240,900–a 43 percent decline. Jobs in wired telecommunications fell 37 percent, from 921,800 to 577,200. Newspaper publishing and wired telecommunications together accounted for 54 percent of the overall decline in information industry jobs.


Meanwhile, the Internet has not come to the rescue. Internet publishing businesses employed 108,000 in 2011, nearly 3,000 fewer people than the 110,800 employed in 2000. These jobs are disappearing in part because much of Internet publishing is performed without pay. Think of Wikipedia (which calls itself “the largest and most popular general reference work on the Internet”), available for free and created almost entirely by volunteers.


Always in Touch

An AARP study of communication between parents and adult children (AARP The Magazine Generations Study) finds much more daily contact today than in the past. Sixty-two percent of today’s young adults–aged 21 to 26–communicate with a parent every day. How do these numbers compare with the past? Only 41 percent of boomers at the same age communicated with a parent every day.


Why Go to College?

There are three reasons for going to college, according to Richard Vedder, Christopher Denhart, and Jonathan Robe of the Center for College Affordability and Productivity in their provocative policy paper, Why Are Recent College Graduates Underemployed?


REASON 1. To increase human capital and make workers more productive. (Probably overestimated, according to the authors, because “learning by doing is particularly underrated in the contribution it makes to raising the productivity of American workers.”)

REASON 2. As a screening device for employers. (This is the crux of the matter. “The college degree is a signal to employers, and one they aggressively utilize,” say the researchers. To an employer, a college degree means you’re smarter and more persistent than the average person. How nice of you and your parents to bear the cost of this screening device.)

REASON 3. Because it’s fun. (The “country clubization” of higher education.)


Given the title of the paper, you know the authors do not look kindly on the “college for all” philosophy. In fact, they say, that philosophy explains why so many recent college graduates are underemployed. The U.S. labor force has 42 million employed college graduates and 29 million jobs that require a college degree (or should require one). “We jokingly predict that colleges will offer a master’s degree in Janitorial Studies within decade or two,” conclude the authors, “and anyone seeking employment as a janitor will discover no one will hire unless proof of possession of such a degree is presented.”


Attitudes toward Gay Marriage 

Support for gay marriage hovers just below the 50 percent mark, according to the 2012 General Social Survey. Forty-nine percent of American aged 18 or older now agree that gays and lesbians should have the right to marry. Support for gay marriage has climbed rapidly over the past few decades. In 1988, only 12 percent of the public supported the right of gays and lesbians to marry.

One factor behind the rising support for gay marriage is generational replacement. In 2012, fully 62 percent of the millennial generation (aged 18 to 35) supported gay marriage. This compares with 51 percent of generation Xers (aged 36 to 47), 43 percent of boomers (aged 48 to 66), and 30 percent of older Americans (aged 67 or older).

Changing attitudes also play an important role in the growing support for gay marriage. Among baby boomers (born 1946 through 1964), only 14 percent favored gay marriage in 1988. A larger 25 percent supported gay marriage in 2004, with the figure rising to 43 percent in 2012.
A Dearth of Computer Skills

Every fall since 1966, UCLA’s Cooperative Institutional Research Program has surveyed American college freshmen, asking them about their demographics, high school experiences, college choices, attitudes toward issues, and future plans. The survey results reveal not only what current freshmen are thinking and doing but also how freshmen have changed over two generations. Many of the survey’s questions have remained the same over the years, but others have been updated as times change. For example, “Your mother’s occupation?” was added in 1971. “Is English your native language?” was added in 1987. Students were asked whether they agree or disagree with the statement “Same-sex couples should have the right to legal marital status” beginning in 1997.


Not surprisingly, the survey’s questions about computers have evolved over the past few decades. In the list of past-year activities, “Used a personal computer” appeared in 1985 (when 27 percent had used one). “Playing video games” appeared in 1995, and “Used the Internet for research or homework” in 1998. More recently, the survey added a question about whether students had used online social networks, such as Facebook. The survey also asks students to rate their abilities, and computer skill was added to the ability list in 1999. Consistently, only about one-third of college freshmen say their computer skills are above average.


This is unfortunate, since computer production (rather than consumption) skills are as important as reading, writing, and arithmetic in the Internet Age. With that in mind, it might be time for the freshmen survey to track the development of computer production skills in more detail by asking college freshmen whether in the past 12 months they had learned a programming language, written a piece of software, designed a web site, produced a blog, or created an app. The answers to these questions might reveal more about the future well-being of young adults than questions about video games or Facebook.


Big Data Reveals Job Change

If you want to get a feel for long-term job trends, then this is the study for you: Task Specialization in U.S. Cities from 1880-2000 (NBER Working Paper 18715) In this Big Data project, which is sure to become a classic in the field, economists Guy Michaels, Ferdinand Rauch, and Stephen J. Redding analyze the verbs (yes, verbs) used to describe jobs in the U.S. Dictionary of Occupational Titles during a 120 year time period (yes, 120 years). They do this by geographic area, correlating their findings with the spread of telephone service and transportation networks. They discover “a systematic reallocation of employment over time towards interactive occupations, which involve tasks described by verbs that appear in thesaurus categories concerned with thought, communication and inter-social activity.”


Jobs are becoming more interactive over time, and interactive job growth has been strongest in urban areas. In fact, it may be the engine of urban growth. Here are the verbs most commonly used to describe jobs in urban growth areas by selected year…

  • 1880: thread
  • 1900: thread
  • 1920: file
  • 1940: file
  • 1960: document
  • 1980: identify
  • 2000: develop

This project is sure to be updated in the years ahead to capture the unfolding Internet Age.


New Norms

The great majority of middle-aged Americans are providing financial support to adult children, according to the Pew Research Center study The Sandwich Generation. Among Americans aged 40 to 59 with adult children, 73 percent have provided financial support to at least one child in the past year.


Trends in Homeownership, 2012 

The annual homeownership rate fell to 65.4 percent in 2012, down from 66.1 percent in 2011 and an all-time high of 69.0 percent in 2004, according to the latest statistics from the Census Bureau’s Housing Vacancy Survey. The homeownership rate hasn’t been this low since 1996. By age, 2012 homeownership rates look like this…


Under age 25: 21.7%

Aged 25 to 29: 34.3%

Aged 30 to 34: 47.9%

Aged 35 to 44: 61.4%

Aged 45 to 54: 71.7%

Aged 55 to 64: 77.3%

Aged 65-plus: 81.1%


Between 2010 and 2011, the biggest decline in homeownership occurred in the 35-to-39 age group (down 2.9 percentage points) because young adults who have been hesitant to buy are aging into their late thirties. Between 2004 and 2012, the 30-to-34 age group has experienced the biggest decline in homeownership, down a steep 9.5 percentage points from 57.4 to 47.9 percent (an all-time low). The 35-to-39 age group did not fare much better, with a 9.3 percentage point decline during those years (falling from 66.2 to 56.9 percent, also an all-time low).


Trends in Student Loan Debt

More debtors and bigger debts. That’s the bottom line in a report on trends in student loans from the National Center for Education Statistics (Trends in Debt for Bachelor’s Degree Recipients a Year after Graduation: 1994, 2001, 2009).


More debtors: The percentage of first-time bachelor’s degree recipients who borrowed to pay for college climbed from 49.3 percent in 1994 to 65.6 percent in 2009.


Bigger debts: The cumulative amount borrowed by first-time bachelor’s degree recipients for their undergraduate education ballooned from $14,700 in 1994 (in 2009 dollars) to $24,700 in 2009–an increase of 68 percent.


And the Beat Goes On

Really? The number of students enrolled in college is projected to grow steadily through 2021, according to the National Center for Education Statistics. Both public and private colleges and universities are forecast to make steady gains.


College enrollment, 2010 and 2021

2010 (actual): 21,016,000

2021 (projected): 24,092,000



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


The average household devotes 65 percent of its telephone spending to cell phone service. Here is the percentage devoted to cell phone service by age of householder…

Under age 25: 86%
Aged 25 to 34: 79%
Aged 35 to 44: 70%
Aged 45 to 54: 67%
Aged 55 to 64: 57%
Aged 65 to 74: 45%
Aged 75-plus: 31%


2. Q & A

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


The Census Bureau has released updates of household wealth, asset ownership, and debt. The data come from the Survey of Income and Program participation, showing median household net worth at $68,828 in 2011. This was 35 percent lower than the $106,585 of 2005 and 16 percent lower than the $81,821 of 2000. The updates show that household debt is declining from its 2010 peak, and credit card debt has plunged. But “other” debt, which includes student loans, is higher than ever. Overall, 18.6 percent of households had “other” debt in 2011, and among householders under age 35, the figure was 31.3 percent.


Retirement Confidence in 2013

Most workers aged 55 or older have little savings, according to the 2013 Retirement Confidence Survey. More than one-third has less than $10,000 in savings and investments, and the 52 percent majority has less than $50,000. Only 42 percent have more than $100,000. Meager savings is one reason why most older workers (54 percent) say they will never retire or will postpone retirement until age 66 or older, up from 37 percent who said this a decade ago.


The State of the Media in 2013  

The latest State of the Media report by Pew Research Center’s Project for Excellence in Journalism, describes the scene of destruction wrought by the Internet: television, radio, and newspapers are declining as sources of news while the Internet surges. Advertisers are adrift, searching for the most efficient way to reach the public. Meanwhile, the pubic is increasingly fickle about where it goes for news. It’s a mess out there, but there’s plenty of opportunity for somebody: Digital advertising has outstripped newspaper advertising and is closing in on television. Google is the biggest player in digital advertising, according to the report.


Hispanics are the best customers of dinner at fast-food restaurants, spending 20 percent more than the average household on this item.

3. Cool Research Links

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


At this link you can see the results from last November’s Current Population Survey, which asked Americans whether they had voted in the 2012 presidential election. Reported voting and registration are shown by age, sex, race and Hispanic origin, and other demographic characteristics. In 2012 for the first time, blacks voted at a higher rate (65.9%) than non-Hispanic whites (64.1%). Only 48 percent of voters were non-Hispanic whites aged 45-plus, evidence of the declining political power of older whites.


Homeownership in 2013

The first estimates of homeownership in 2013 were released by the Census Bureau a few weeks ago and are available at this site. The overall rate fell to 65.0 percent in the first quarter of 2013. The quarterly homeownership rate hasn’t been that low since the third quarter of 1995. Although the overall rate was the same in both time periods, most age groups are less likely to own a home in 2013 than in 1995. The aging of the population is all that has kept today’s rate from falling below the 65-percent threshold.


New Occupations

Every few years the federal government updates its occupational classification system–the one that produces estimates, for 821 detailed occupations, of the number of workers and their earnings. The government creates these estimates for the nation as a whole and for states and metropolitan areas. At this link you can access the latest update and see the list of 24 new occupations, including fundraisers, web developers, genetic counselors, solar photovoltaic installers, and wind turbine service technicians.



The Connectivity Continuum  

Twenty-seven percent of Americans are highly connected to the Internet, accessing the Internet at multiple locations with multiple devices. Another 16 percent of Americans are not connected at all to the Internet, lacking any kind of computer or Internet use. These are the two extremes of what the Census Bureau calls the “connectivity continuum,” with everyone else at various stages of connectivity in between (home-only connectivity, single-device connectivity, etc.). At this link you can access the Census Bureau report, Computer and Internet Use in the United States: 2011. The report is admittedly dated, but it captures an historic moment–the transition from pre- to post-Internet age when connectivity sharply divided the population. The highly connected and the unconnected were the two largest segments of the population in 2011.


The best customers of new cars are married couples without children at home, most of them empty-nesters. This household type accounts for more than one-third of the new car market.

Who buys? What do they buy? How much do they spend? Get the dollar-for-dollar answers you need for business success in today’s competitive economy from these one-stop resources. You can’t get these data online!


Looking for customers? Repositioning your products? Americans are still spending money, but only those who are on top of the trends will know who the spenders are. The just-published 17th edition of Household Spending: Who Spends How Much on What reveals who is spending and the products and services they buy. New to this edition are comparisons of spending before (2000-06) and after (2006-10) the Great Recession.


The annual spending data in Household Spending, the first edition of which was published more than twenty years ago in 1991, allow you to compare and contrast spending by a host of demographic characteristics. With this vital information, which is not available online, you can determine market potential, identify your best customers, and understand which segments account for the largest share of spending. You get the answers by the demographics that count–age, income, high-income households, household type, region of residence, race and Hispanic origin, and education.


You can see the book’s introduction, table of contents, index, and sample pages at, where you can also download this unique reference tool as a PDF linked to Excel spreadsheets of all data tables

Hardcover: $125.00 (978-1-935737-12-2) 612 pages

Paper: $94.95 (978-1-935737-13-9)


The new edition of American Buyers presents 2010 spending data in a groundbreaking guide to buying patterns–essential information in these difficult economic times.


While most businesses have a feel for what’s happening in their own establishments, American Buyers lets them see the big picture beyond their walls or website. The unique weekly and quarterly spending data, which are not available online, show the percentage of households that buy individual products and services and how much the buyers pay for them. American Buyers reveals the percentage of households that buy fast-food lunches during an average week, for example, and how much the buyers spend on them. It reveals the percentage of households buying airline tickets during an average quarter and how much the buyers spend on them. Even better, these vital spending data are detailed by the demographics that count– age, income, high-income households, household type, region of residence, race and Hispanic origin, and education.


You can see the book’s introduction, table of contents, index, and sample pages at, where you can also download this unique reference tools as a PDF linked to Excel spreadsheets of all data tables.

Hardcover: $125.00 (978-1-935775-98-0) 396 pages

Paper: $94.95 (978-1-935775-99-7)
Best Customers: Demographics of Consumer Demand, 9th edition

Find out how the American marketplace has been transformed by the Great Recession in this new edition of Best Customers: Demographics of Consumer Demand, with all-important 2010 spending data.


In Best Customers, 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 such as Entertainment, Groceries, Computers, Telephones, etc.–everything a consumer might buy. Based on unpublished data–you can’t find this on the Internet–from the Bureau of Labor Statistics’ valuable Consumer Expenditure Survey, Best Customers brings you insight into household spending by the demographics that count–age, income, household type, region of residence, race and Hispanic origin, and education. Each product table is accompanied by text that identifies the best customers, analyzes spending patterns, describes spending trends before and after the Great Recession, and predicts future trends based on changing demographics.


You can see the book’s introduction, table of contents, index, and sample pages at, where you can also download this unique reference tool as a PDF linked to Excel spreadsheets of all data tables.

Hardcover: $120.00 (978-1-937737-10-8) 810 pages

Paper: $89.95 (978-1-937737-11-5)
Who’s Buying Series

Get the demographics you need to target your markets with the 14-volume Who’s Buying Series, which can be purchased individually or as a set. Each volume gives you the facts about consumer spending by age, income, household type, race and Hispanic origin, region of residence, and education. To round out the spending picture, you also get who-are-the-best-customer analyses of the data. These new editions are must-haves updated with 2010 data and reveal spending trends before (2000-06) and after (2006-10) the Great Recession product by product. TheWho’s Buying Series includes Alcoholic & Non-Alcoholic Beverages; Apparel; Entertainment; Groceries; Health Care; Household Furnishings, Services, and Supplies; Information and Consumer Electronics; Pets; Restaurants; Transportation; Travel; and Who’s Buying: Executive Summary, Who’s Buying by Age, and Who’ Buying by Race and Hispanic Origin.


You can see the introduction, table of contents, index, and sample pages of each volume in the Who’s Buying Series, where you can also download these unique reference tools as PDFs linked to Excel spreadsheets of all data tables. Individual reports: $59.95; 14-volume series: $750.00.

For your convenience, all of New Strategist’s titles are available as searchable single- and multiple-user PDFs linked to spreadsheets of each data table so you can do your own analyses and create PowerPoint presentations.


During an average week, 12 percent of women aged 65 or older buy personal care services, more than any other age group.