Friday, August 18, 2017

Wife Time Is Shrinking

Women are spending a shrinking share of their lives as wives, according to an analysis by the Center for Retirement Research. Examining data from the Health and Retirement Study, the researchers analyzed four birth cohorts—the original HRS cohort (born from 1931 to 1941), War Babies (1942 to 1947), Early Boomers (1948 to 1953) and Mid Boomers (1954 to 1959). Here are the researchers' estimates of the percentage of life, from age 20, women will have spent as wives by cohort...

Percentage of life from age 20 spent as a wife
HRS cohort: 72%
War Babies: 69%
Early Boomers: 56%
Mid Boomers: 51%

Behind the decline in years spent as a wife are several factors—the rising age at first marriage, the greater prevalence of singlehood, and more divorce. Because women are spending a growing share of their lives without husbands, "it probably makes sense to explore their savings and investment behavior separately from men," conclude the researchers.

Source: Center for Retirement Research, Do Women Still Spend Most of Their Lives Married?

Thursday, August 17, 2017

The Good, Bad, and Ugly of the American Workplace

A new survey finds both good and bad conditions in workplaces across the country. According to RAND's American Working Conditions Survey, "the American workplace is very physically and emotionally taxing, both for workers themselves and their families." Here are some examples of common troublesome conditions...

  • Only 54% of workers work the same number of hours every day.
  • 36% say their work schedule is set by their company with no possibility for change.
  • In the past month, half have worked in their free time to meet work demands.
  • 41% of workers are in tiring or painful positions at least one-quarter of the time. 
  • 20% experienced abuse or harassment on the job in the past month/year.

On the positive side, the 56 percent majority of workers say they have very good friends at work, 58 percent have a supportive boss, and 79 percent like and respect their colleagues. More than 60 percent say their job provides them with a sense of personal accomplishment.

The survey was of a nationally representative sample of working men and women aged 25 to 71—all members of the RAND American Life Panel. The findings are shown for all workers as well as men and women in three age groups and two educational attainment groups.

Source: RAND, Working Conditions in the United States—Results of the 2015 American Working Conditions Survey

Wednesday, August 16, 2017

More than 1 in 8 Americans Use Antidepressants

Millions of Americans are taking antidepressants, according to data collected by the National Health and Nutrition Examination Survey. Among the population aged 12 or older, more than one in eight (12.7 percent) took an antidepressant medication in the past month in the 2011–2014 time period. Women are far more likely to take antidepressants than men (16.5 versus 8.6 percent), and older women are most likely to take them—nearly one in four women aged 60 or older took an antidepressant in the past month.

Percent of women (and men) taking an antidepressant in past month
Aged 12 to 19: 5.0% (1.9%)
Aged 20 to 39: 9.8% (5.9%)
Aged 40 to 59: 21.2% (11.6%)
Aged 60-plus: 24.4% (12.6%)

Antidepressant use has increased since 1999–2002, when 7.7 percent of Americans aged 12 or older had taken the medication in the past month. One reason for the growing use of antidepressants is their long-term use. Among those taking an antidepressant in the past month, one in four had been taking the medication for 10 or more years.

Source: National Center for Health Statistics, Antidepressant Use among Persons Age 12 and Over: United States, 2011–2014

Tuesday, August 15, 2017

Income Shocks Are the Norm for Men

In a study of men's incomes over time, researchers for the National Endowment for Financial Education found income shocks to be the norm. Fully 61 percent of male workers aged 25 to 70 had experienced the loss of an entire year's worth of income at least once. Among older men, such devastating losses are a nearly universal experience...

Percentage of male workers who have lost all earnings for at least one year
Aged 25 to 34: 40%
Aged 35 to 54: 56%
Aged 55 to 61: 75%
Aged 62 to 65: 87%
Aged 66 to 70: 93%

These income shocks lower the retirement savings of workers in the bottom 50 percent of the income distribution (with annual earnings of $26,531 or less), who struggle to save money. By linking data from the Survey of Income and Program Participation with Social Security and IRS records, the researchers tracked men's lifetime earnings as well as their contributions to retirement plans and account balances by demographic characteristic. The researchers found that lower-income men are most likely to experience income shocks—82 percent had experienced at least one versus 53 percent of middle-income men and 45 percent of high-income men (with annual earnings of $80,040 or more). When  lower-income men experience an income shock, their retirement savings take a hit. For each one-year episode of income loss, workers in the bottom 50 percent of the income distribution saw their retirement savings decline by an average of $3,786. There was no effect on the retirement savings of men in the top 50 percent of the income distribution.

"Nearly everyone will suffer multiple income shocks during their working lives," conclude the researchers." Educators and policymakers should "prepare individuals to expect income shocks and educate them on how to manage and recover from financial setbacks with the least possible impact on their retirement savings."

Source: National Endowment for Financial Education, Income Shocks and Life Events: Why Retirement Savings Fall Short

Monday, August 14, 2017

Americans May Be More Honest in Online Surveys

Phone surveys may be understating financial stress, according to a Pew Research Center experiment. In an effort to determine "mode effects," Pew randomly assigned survey respondents to telephone or online modes when asking them questions about financial stress. Respondents were more likely to report financial stress when answering online than when talking to an interviewer by phone.

"Survey researchers have long known that Americans may be more likely to give a 'socially desirable' response (and less likely to give a stigmatized or undesirable answer) in an interview-administered survey than in one that is self-administered," notes Pew.

Percent saying they received financial help from a relative in past year
Phone: 15%
Online: 26%

Percent saying their personal finances are in poor shape
Phone: 14%
Online: 20%

Regardless of income, Americans are more likely to report poor finances when answering online than by phone, says Pew. "Researchers studying financial stress should consider that phone surveys have, at least to some degree, been understating the share of Americans experiencing economic hardship."

Source: Pew Research Center, Personal Finance Questions Elicit Slightly Different Answers in Phone Surveys than Online

Friday, August 11, 2017

Who Shops for Groceries Online?

Grocery shopping is slowly moving online, according to the findings of a Gallup survey. Nearly 1 in 10 American families (9 percent) say they shop for groceries online for pickup or delivery at least once or twice a month. Here are the percentages by age...

Shop online for groceries
18 to 29: 15%
30 to 49: 12%
50 to 64: 10%
65-plus: 2%

Despite the significant presence of online grocery shopping, going to a store for groceries is still a universal activity. The percentage who shop for groceries in person at a store at least once or twice a month varies little by age, ranging from 97 to 99 percent.

Source: Gallup, So Far, American Grocery Shoppers Buck Online Shopping Trend

Thursday, August 10, 2017

How Much Money Is In 401(k) Accounts?

According to the Employee Benefit Research Institute, 54 million American workers were active 401(k) participants in 2015. Total 401(k) assets amounted to $4.4 trillion at the end of 2015—19 percent of all retirement assets. But how much have individual participants stashed away?

EBRI has the answers. The median 401(k) account balance was $16,732 in 2015. The average balance was $73,357. Here is the distribution of participants by the size of their account...

Distribution of 401(k) participants by size of account, 2015
$10,000 or less: 41.3%
$10,001 to $50,000: 28.2%
$50,001 to $100,000: 11.1%
$100,001 to $200,000: 9.1%
$200,001 or more: 10.2%

Source: Employee Benefit Research Institute, 401(k) Plan Asset Allocation, Account Balances, and Loan Activity in 2015

Wednesday, August 09, 2017

Research Shows 65-Plus Income May Be 30% Higher

The income of households headed by people aged 65-plus may be much higher than estimated by the Current Population Survey. An analysis of 2012 data by Census Bureau researchers finds substantial underreporting of retirement income when compared to administrative records. Among older Americans who receive retirement income, the researchers say, none of it is reported 46 percent of the time! Here are some other startling findings from the analysis...
  • The 2012 median income of householders aged 65 or older was 30 percent higher based on administrative records versus the Current Population Survey—$33,800 reported by the CPS and $44,400 based on administrative records.
  • The poverty rate of people aged 65 or older was 2.1 percentage points lower (6.9 percent instead of 9.0 percent). 
  • The income drop after retirement is much smaller than has been estimated based on CPS data. "We do not find large, abrupt declines in income or increases in poverty upon retirement," say the researchers. 
The analysis is based on 2012 CPS data, prior to the Census Bureau's 2014 redesign of the Current Population Survey to better capture retirement income. In the future, the researchers hope to evaluate the effectiveness of the redesign in capturing more retirement income.

Source: Census Bureau, Do Older Americans Have More Income Than We Think?

Tuesday, August 08, 2017

Who Can Count On Family for Financial Help?

Many Millennials would have a lot of trouble paying an unexpected bill of $1,000, according to a GenForward Survey, which defines Millennials as 18-to-34-year-olds. The bimonthly survey is a project of the University of Chicago and administered by NORC. The survey's purpose is to examine "how race and ethnicity influence how young adults or Millennials experience and think about the world."

Percent saying they would have a lot of difficulty paying an unexpected $1,000 bill
Asians: 28%
Blacks: 50%
Hispanics: 43%
Non-Hispanic Whites: 35%

One factor that would make it difficult for many to pay an unexpected bill is the lack of family resources. When asked whether they could turn to their family for help in paying an unexpected $1,000 bill, the percentage who say yes ranges from a low of 38 percent among Blacks to a high of 64 percent among Asians...

Percent saying they could turn to family for help paying an unexpected $1,000 bill
Asians: 64%
Blacks: 38%
Hispanics: 54%
Non-Hispanic Whites: 56%

Asians also are most likely to say their family could help with a down payment for a new car (51 percent) or house (49 percent). They are also most likely to say their family could help them with college tuition or paying off student loans (58 percent).

Source: GenForward University of Chicago: June 2017 Report

Monday, August 07, 2017

Private-Sector Health Insurance Costs, 2016

Several years ago Demo Memo noted that most Americans were "health insurance dummies," sheltered from an understanding of the full cost of health insurance by employer-provided plans. Here is how much those employer-provided plans cost in 2016...

Average total cost of employer-provided health insurance in the private sector, 2016
Single coverage: $6,101
Family coverage: $17,710

Fortunately for most private-sector workers, their employer pays the bulk of the bill. For single coverage, the average employee paid $1,325 of the $6,101 cost in 2016. For family coverage, the average employee paid $4,956 of the $17,710 premium.

Source: Medical Expenditure Panel Survey, Results from the 2016 MEPS-IC Private-Sector National Tables

Friday, August 04, 2017

The Ability to Think for Oneself Is Losing Importance

Perhaps it is a sign of the times, but thinking for oneself is not as important as it used to be. The percentage of Americans who believe "thinking for himself or herself" is the most important thing a child should learn to prepare for life has fallen—and the decline has been especially steep since 2006.

Thinking for himself/herself is the most important thing a child should learn
2016: 41%
2006: 47%
1996: 51%
1986: 51%

Despite the decline, thinking for oneself is still the most important thing a child should learn according to the plurality of Americans. In second place is "learning to work hard," cited as most important by 27 percent of the public in 2016, more than double the 11 percent who felt this way in 1986. Third in importance is "learning to help others" (19 percent), followed by "learning to obey" (12 percent), and in last place "learning to be popular" (0.6 percent).

Source: Demo Memo analysis of the General Social Survey

Thursday, August 03, 2017

Households Spend the Most on These 12 Items

The average American household spends more than $1,000 a year on only 12 items according to the Consumer Expenditure Survey. Here are the items...

1. Social security deductions: $4,457
2. Groceries: $4,015
3. Vehicle purchases: $3,997
4. Rent: $3,600
5. Health insurance: $2,977
6. Mortgage interest: $2,859
7. Restaurants: $2,575
8. Gasoline: $2,028
9. Property taxes: $1,913
10. Electricity: $1,460
11. Vehicle insurance: $1,079
12. Cell phone service: $1,023

Note that both rent and mortgage interest appear on the list, yet few households have both expenses. But subtract either rent or mortgage interest from the expenses on the list, and the result is the same. The average American household devoted more than half of the $55,978 it spent in 2015 to this short list of items.

Source: Demo Memo analysis of the 2015 Consumer Expenditure Survey

Wednesday, August 02, 2017

Glory Days Are Here Again for Tech

Since 2010, employment in the tech industry has been growing twice as fast as private-sector employment overall, and tech wages are outpacing the average. The glory days are back for tech, according to the Federal Reserve Bank of St. Louis, which defines the sector as comprised of seven industries...

Industries in the tech sector (and publicly-owned firm with largest revenue)
1. Computer manufacturing (Apple)
2. Electronic shopping (Amazon)
3. Software publishing (Microsoft)
4. Data processing, hosting, and related services (Xerox)
5. Internet publishing, broadcasting, and web search portals (Google)
6. Computer systems design (IBM)
7. Scientific research and development (QuintilesIMS)

The tech sector has seen ups and downs over the decades. Tech employment as a share of total private employment climbed through 1990s and hit a high of 4 percent in 2000, then fell as low as 3.4 percent after the tech bubble burst in 2001. The Great Recession also shook the industry, but in 2010 the turnaround had begun. Tech employment as a share of total private employment reached 3.9 percent in 2015—nearly matching the all-time high of 2000.

Between 2010 and 2015, jobs in the tech sector grew 20 percent versus an 11 percent gain for all private-sector employment. Tech-sector wages grew 5 percent annually during those years. Wage growth has lifted the earnings of tech workers far above those of the average private-sector worker. In 1990, the average tech worker made 1.6 times as much as the average private-sector workers. By 2015, tech workers made 2.2 times as much.

"Innovations in digital computing systems and automation have triggered tectonic shifts in consumer and business behaviors across the economy" says the St. Louis Fed. All true, but the tectonic shifts to come may be even greater than the ones in our past—especially if a theory about the low productivity growth of recent years turns out to be correct (see the New York Times article, Maybe We've Been Thinking about the Productivity Slump All Wrong). The theory goes like this: depressed wages have discouraged businesses from widespread deployment of productivity-boosting technologies. Why bother investing in capital equipment and software when workers are so cheap? As the labor market tightens and workers become more costly, businesses will deploy labor-saving technologies on a massive scale. The glory days may turn into glory years.

Source: Federal Reserve Bank of St. Louis, Growth in Tech Sector Returns to Glory Days of the 1990s

Tuesday, August 01, 2017

American Dream Disappearing in Rural America

In rural areas, the American Dream is slipping away. At least that's how those who live there feel, according to the General Social Survey.

The GSS asks respondents whether they agree or disagree with the statement: "The way things are in America, people like me and my family have a good chance of improving our standard of living." This is the percentage who agree that the American Dream still applies to them by urban status...

Belief in the American Dream by urban status, 2016
74% of those who live in the central cities of the 12 largest metropolitan areas
60% of those who live in the central cities of the 13 to 100 largest metropolitan areas
58% of those who live in the suburbs of the 12 largest metropolitan areas
58% of those who live in the suburbs of the 13 to 100 largest metropolitan areas
57% of those who live in other urban areas
47% of those who live in rural areas

Only 47 percent of Americans who live in rural areas have faith in the American dream versus 74 percent of the residents of the largest central cities. It gets worse. Analyzing the data by race and Hispanic origin shows that only 40 percent of non-Hispanic Whites in rural areas think the American Dream works for them. This pessimism is not shared by their counterparts in cities and suburbs, most of whom still believe in the American Dream—including 71 percent of non-Hispanic Whites in the largest cities. Blacks, too, do not share the pessimism of rural non-Hispanic Whites. About two-thirds of Blacks have faith in the dream, whether they live in rural areas, suburbs, or cities.

Belief in the American Dream among non-Hispanic Whites in rural areas was much greater in 2000, when 68 percent believed they had a good chance of improving their living standard. By 2010, the figure had fallen to 54 percent. Because of the Great Recession, belief in the Dream also took a hit during those years among non-Hispanic Whites in central cities and suburbs. Since 2010, faith in the American Dream among non-Hispanic Whites in cities and suburbs has rebounded. There has been no rebound for non-Hispanic Whites in rural areas.

Source: Demo Memo analysis of the General Social Survey