Wednesday, October 01, 2014

Six Types of Older Americans

Households headed by Americans aged 65 or older can be segmented into six clusters based on their spending patterns, say researchers from the Bureau of Labor Statistics. Using data from the 2010-11 Consumer Expenditure Survey, the analysts identified these types...

1. Basic need-meeters (26.9%). The largest and poorest cluster, this segment had an average income of $33,124 in 2010-11 and spent just $23,679. Because of their limited resources, Basic Need-Meeters must devote the largest share of their spending to essentials (43 percent).
2. Housing burdened (25.9%). Fully 78 percent of households in this cluster are still making mortgage payments compared with only 23 to 34 percent of households in the other clusters. Consequently, the Housing Burdened devote the largest share of their budget to mortgage (or rent)—fully 42 percent of their spending versus only 5 to 17 percent in the other clusters.
3. Health care burdened (21.1%). The second-poorest cluster, this group is defined by its outsized out-of-pocket health care spending—or 27 percent of its $29,818 overall spending. Other groups devote only 10 to 12 percent of their spending to health care.
4. Transportation burdened (12.1%). Although this group spent a relatively large $44,245 in 2010-11, it had to devote a hefty 33 percent of that spending to transportation. Fully 60 percent of this group lives in smaller cities of the South and Midwest.
5. Happy retirees (6.3%). This is the richest group, with average annual spending of $54,813. They devote a hefty 31 percent of their budget to "expendables" (entertainment, travel, and household operations). The average income of Happy Retirees and Balanced Budgeters is about the same, but Happy Retirees spend more.
6. Balanced budgeters (5.4%). This group is almost as affluent as Happy Retirees, but it spends less ($47,920 versus $54,813). They devote about an average amount to various budget items, which is why they are considered "balanced."

Source: Bureau of Labor Statistics, Monthly Labor Review, Consumption Patterns and Economic Status of Older Households in the United States

Tuesday, September 30, 2014

The Tchotchke Index: 2013 Update

It has been a while since we updated the Tchotchke Index—a measure of our economic wellbeing. The more Americans are willing to spend on tchotchkes—gift shop items, home decor trinkets, yard sale finds—the greater the economic confidence. Five years ago Demo Memo Blog created the Tchotchke Index to track excess consumer spending (here is the original post). The Tchotchke Index is the amount of money spent by the average household on "decorative items for the home," a detailed category in the Consumer Expenditure Survey.

Sadly, the Tchotchke Index has plummeted to the lowest level on record. In 2013, the average household spent just $103 on decorative items for the home—less than half of the $240 it spent on this category in 2000, after adjusting for inflation. The 2013 Index is even lower than the $108 spent in 2010, in the aftermath of the Great Recession. An ominous sign, for sure.

Monday, September 29, 2014

Book Store Jobs, 2004 and 2014

The number of Americans employed at book stores and news dealers fell 41 percent between 2004 and 2014, from 151,100 to 89,600—a loss of more than 60,000 jobs.

Source: Bureau of Labor Statistics, Spending and Employment related to Books and other Reading Materials

Friday, September 26, 2014

Fewer Middle-Aged Men Have Long-Term Jobs

Men's incomes are declining in part because fewer hold long-term jobs. This is especially true for men aged 45 to 54, typically the nation's peak earners. A generation ago, the average employed man in this age group had worked for his current employer for at least 10 years. Not so today. The 2014 numbers show a steep decline in long-term jobs among middle-aged men.

  • Only 42.8 percent of men aged 45 to 49 had worked for their current employer for at least 10 years, down from 57.8 percent a generation ago in 1983—a 15 percentage point decline.
  • Only 49.9 percent of men aged 50 to 54 had worked for their current employer for at least 10 years, down from 62.3 percent in 1983—a 12 percentage point decline.

Source: Bureau of Labor Statistics, Employee Tenure

Thursday, September 25, 2014

College Enrollment Declines

College enrollment has declined for the second year in a row, according to the Census Bureau. In the fall of 2013, the nation's two-year, four-year, and graduate schools enrolled 19.5 million students. This was 463,000 fewer students than in the fall of 2012 and 930,000 fewer students than in the fall of 2011—the peak year, when college enrollment reached 20.4 million.

Two-year schools accounted for almost all the enrollment decline between 2012 and 2013 (-560,000), while four-year schools made gains (+128,000). This was a reversal of the 2011-12 pattern of loss, when four-year schools accounted for almost all the enrollment decline (-580,000) and two-year schools made gains (+125,000). The nation's graduate schools experienced small declines in both years (-31,000 in 2012-13 and -13,000 in 2011-12).

Source: Census Bureau, School Enrollment

Wednesday, September 24, 2014

What Do Women Want? A Man with a Steady Job

The median age at first marriage is at a record high for both men and women. To find out why, Pew Research Center surveyed Americans about their attitudes toward marriage and asked those who had not yet married what the heck they were waiting for.

Wouldn't you know it, a steady job is the number-one characteristic women want in a partner. Fully 78 percent of single women who want to marry someday say this is a very important quality in choosing a partner. Many more single women want a man with a steady job than want one who shares their ideas about raising children, morals, or religious beliefs.

Finding a man with a steady job is more difficulty than it used to be. According to Pew's analysis, there are only 91 employed men per 100 women in the 25-to-34 age group, down from 139 in 1960. Even worse, many of today's employed young men have low-paying and unstable jobs, making them unattractive marriage partners. When women decide to marry, they are making a rational economic decision. The fact that so many young women are choosing to remain single is evidence of the decline in men's earning power.

Source: Pew Research Center, Record Share of Americans Have Never Married

Tuesday, September 23, 2014

What's Behind the Rise in Obesity?

The percentage of Americans who are obese has soared over the past 50 years, according to height and weight measurements collected by the federal government. Fully 35 percent of adults aged 20 to 74 were obese in 2011-12, up from just 13 percent  in 1960-62. Obesity is defined as having a body mass index of 30.0 or greater.

This rise in obesity did not occur steadily over the past 50 years. Most of the increase took place between 1976 and 2000, when obesity doubled from 15 to 31 percent. What happened then to cause the increase? Three converging trends may have been at work: the aging of the baby-boom generation into middle-age when people typically put on pounds, the rise of working women and mothers, and the substitution of fast-food meals for home cooking.

Interestingly, the percentage of Americans who are overweight but not obese has barely grown over the years, rising from 31.5 percent in 1960-62 to 33.3 percent in 2011-12. Add the overweight numbers to the obesity figures, and the 69 percent majority of Americans were overweight or obese in 2011-12, up from a 45 percent minority in 1960-62.

Source: National Center for Health Statistics, Prevalence of Overweight, Obesity, and Extreme Obesity among Adults: United States, 1960-1962 through 2011-2012

Monday, September 22, 2014

Gen X: Higher Incomes, Less Wealth

A study of the upward mobility of Generation X reveals contradictory trends. Although the incomes of Gen Xers are higher than their parents, they are not as wealthy. This is true especially of college graduates: 82 percent have higher incomes than their parents, but only 30 percent have greater wealth.

What accounts for this disparity? One factor is student debt. Although the education debt of Gen Xers is manageable on a day-to-day basis, notes the report, it is limiting their wealth accumulation and may hamper their ability to send their own children to college—the troubling "generational reach" of students loans.

Source: The Pew Charitable Trusts, A New Financial Reality—The Balance Sheets and Economic Mobility of Generation X

Friday, September 19, 2014

Change in Households by Age, 2013 to 2014

The number of households in the United States grew by a tiny 0.4 percent between 2013 and 2014, according to the Census Bureau's Current Population Survey—the third slowest rate of growth in more than four decades. Here is the numerical change in households by age of householder...

Change in number of households, 2013 to 2014
Total households: 492,000
Under age 25:          9,532
Aged 25 to 34:        -8,994
Aged 35 to 44:    -288,231
Aged 45 to 54:    -258,528
Aged 55 to 64:     233,447
Aged 65-plus:      804,985

The decline in households headed by people aged 35 to 54 is due to the small Generation X moving into those age groups. The increase in households headed by people aged 55 or older is due to the large Baby-Boom generation moving into those age groups. The troubling number, and a sign of economic distress, is the decline in households headed by 25-to-34-year-olds, a group that should be expanding with the Millennial generation.

Source: Census Bureau, Income and Poverty in the United States: 2013

Thursday, September 18, 2014

What Happened to the Nation's Peak Earners?

Median household income peaks in the 45-to-54 age group, but the peak is smaller today than it once was because of the staggering decline in the median income of the age group.

In 1999, the year when the nation's median household income reached its all-time high, the median of households headed by 45-to-54-year-olds was 40 percent greater than the overall median: $79,550 versus $56,895 (in 2013 dollars). Today, however, the median income of householders aged 45 to 54 is just 29 percent higher than the overall median: $67,141 versus $51,939. Between 1999 and 2013, the median income of householders aged 45 to 54 fell by a stunning 15.6 percent—a loss of more than $12,000, after adjusting for inflation.

Median household income in 2013 (and percent change since 1999; in 2013 dollars)
Total households: $51,939 (-8.7%)
Under age 25: $34,311 (-2.4%)
Aged 25 to 34: $52,702 (-10.4%)
Aged 35 to 44: $64,973 (-8.5%)
Aged 45 to 54: $67,141 (-15.6%)
Aged 55 to 64: $57,538 (-7.9%)
Aged 65-plus: $35,611 (+11.7%)

Source: Census Bureau, Income and Poverty in the United States: 2013

Wednesday, September 17, 2014

Anemic Household Growth, 2013-14

The number of households in the United States increased by a tiny 0.4 percent between 2013 and 2014, according to the Census Bureau's latest estimates. In only 2 of the past 40 years have households grown more slowly (in 2008–09 and 2009–10). The 492,000 households added to the nation's total between 2013 and 2014 is the fourth smallest numerical gain in four decades of tracking the numbers (smaller gains were recorded in 1982–83, 2008–09, and 2009–10).

Also notable, the number of non-Hispanic White households fell slightly between 2013 and 2014. The decline marks only the 4th time in 40 years that the Census Bureau has estimated a drop in the number of non-Hispanic White households.

Nearly one-third of the nation's households are now headed by Blacks, Asians, or Hispanics. Black households outnumber Hispanic households by more than 1 million, and they grew faster than Hispanic households between 2013 and 2014 (a 1.8 percent gain for Blacks versus a 1.4 percent gain for Hispanics). Asian households are far less numerous than Black or Hispanic, but they grew by a faster 4.1 percent between 2013 and 2014.

Number (and percent distribution) of households by race and Hispanic origin, 2014
Total: 122,952,000 (100.0%)
Asian: 6,111,000 (5.0%)
Black: 16,855,000 (13.7%)
Hispanic: 15,811,000 (12.8%)
Non-Hispanic White: 83,641,000 (68.0%)

Source: Census Bureau, 2014 Current Population Survey

Tuesday, September 16, 2014

Median Household Income in 2013

The $51,939 median household income of 2013 was not significantly different from the $51,758 of 2012, after adjusting for inflation. This is the second year in a row of no significant change in median household income, according to the Census Bureau, following two years of decline.

Median household income in 2013 was 8.0 percent below the median of 2007 (the Great Recession officially began in December 2007), after adjusting for inflation. But 2007 was nothing special as far as median household income is concerned because the median had peaked years before that—all the way back in 1999 at $56,895. Median household income in 2013 was 8.7 percent below that all-time high.

Median household income, 1999 to 2013 (in 2013 dollars)
2013: $51,939
2012: $51,758
2011: $51,842
2010: $52,646
2009: $54,059
2008: $54,423
2007: $56,436
1999: $56,895 (all-time high)

Source: Census Bureau, Income and Poverty in the United States: 2013

Monday, September 15, 2014

Spending Trends by Region, 2006 to 2013

The Northeast is the only region in which average household spending in 2013 exceeded spending in 2006 (the peak spending year, nationally), after adjusting for inflation.

Average household spending in 2013 (and percent change since 2006; in 2013 dollars)
Total households: $51,100 (-8.6%)
Northeast: $57,027 (+0.4%)
Midwest: $50,527 (-3.1%)
South: $45,956 (-10.6%)
West: $55,460 (-16.5%)

Households in the Northeast are now the biggest spenders. At the other extreme, households in the South spend the least and are losing ground. In dollar terms, the household spending gap between the Northeast and South has more than doubled, rising from $5,388 in 2006 to $11,071 in 2013.

Source: Bureau of Labor Statistics, Consumer Expenditure Surveys

Friday, September 12, 2014

Stuck in the Suburbs

As boomers age into their sixties and beyond, most still live in suburban and rural areas designed for younger adults in their physical prime. Driving is a requirement for getting groceries, seeing a doctor, or visiting friends and family. Yet many older Americans (20 percent of those aged 50 or older, according to an AARP study) limit their driving or have given it up entirely. As boomers age, millions will be isolated in suburban and rural areas. Housing America's Older Adults, a new report from the Joint Center for Housing Studies of Harvard University, examines this emerging problem and what can be done about it.