Millennial Generation Faces Perfect Storm

For many Millennials, the future may be dire indeed. A perfect storm of more debt, lower earnings, reduced homeownership, less wealth, and skimpier retirement savings relative to older generations suggests that many will experience a third-world standard of living in old age. The Center for Retirement Research reviews many of these concerns in a report examining whether Millennials will be ready for retirement.

"Many of today's workers will have inadequate income when they reach retirement," the report begins, "but the prospects for Millennials seem more challenging than for the generations ahead of them." CRR researchers count the ways millennials are behind. Compared to Gen Xers and late Boomers at the same age...

• Their earnings are lower
• They are less likely to participate in an employer-sponsored retirement plan
• They are less likely to be covered by employer-provided health insurance
• They are less likely to be homeowners
• They are more likely to have student loans
• They have accumulated less wealth

"Millennials are well behind other cohorts at the same age even though they will live longer and receive less from Social Security relative to pre-retirement earnings," the report concludes. The only good news is: "retirement is still a long way off for these Millennials."

Source: Center for Retirement Research at Boston College, Will Millennials Be Ready for Retirement?

First-Time Homebuyer Watch: 4th Quarter 2017

Homeownership rate of householders aged 30 to 34, fourth quarter 2017: 47.1%

Is the long slide over? The homeownership rate of households headed by people aged 30 to 34 climbed to 47.1 percent in the fourth quarter of 2017. This is the highest quarterly rate for the age group since the end of 2014. The 47.1 percent rate is fully 2.5 percentage points above the all-time low of 44.6 percent recorded in the first quarter of 2017. While the homeownership rate of 30-to-34-year-olds appears to have found a new normal in the mid-forties, perhaps the increase is a sign that the early 30s will once again become the age of first-time home buying.  


Historically, homeownership became the norm in the 30-to-34 age group—rising above 50 percent. But beginning in 2007, the homeownership rate of 30-to-34-year-olds went into a tailspin. In the second quarter of 2011, the rate fell below 50 percent for the first time. It's been stuck there ever since. The new age of first-time home buying is 35 to 39, but even this age group has been slipping toward the 50-percent threshold. In the fourth quarter of 2017, the homeownership rate of 35-to-39-year-olds was 56.6 percent, well below the peak of 65.7 percent in the first quarter of 2007.


Nationally, the homeownership rate was 64.2 percent in the fourth quarter of 2017—the first time the quarterly rate has cracked the 64 percent mark since 2014. But, cautions the Census Bureau, the 64.2 percent rate is not statistically different from the 63.7 percent of one year ago.

Source: Census Bureau, Housing Vacancy Survey

Who Spends the Most Time Eating?

It's not who you think it is. Healthy weight adults (with a BMI of 18.5 to 24.99), spent the most time eating on an average day in 2016, according to an analysis of American Time Use Survey data by the USDA's Economic Research Service. Overweight adults (with a BMI of 25.0 to 29.99) spent less time eating than those with a healthy weight. The low-risk obese (with a BMI of 30.0 to 34.99) spent even less time eating, and the high-risk obese (with a BMI of 35.0 or higher) spent the least time of all.

Minutes per day spent eating by body mass index
Healthy weight: 88
Overweight: 80
Low-risk obese: 79
High-risk obese: 73

The findings are "consistent with patterns from studies in other countries," report the ERS researchers. The higher the BMI, the less time spent eating.

Source: USDA Economic Research Service, Healthy Weight Adults Spend More Time Eating than Do Overweight and Obese Adults

Don't Let Your Babies Grow Up To Be Cashiers

More cashiers than cops are murdered on the job, according to the Bureau of Labor Statistics—54 cashiers and 51 police officers were killed in the line of duty in 2016. Of course, the homicide rate is much higher for cops because there are fewer cops than cashiers (708,000 police and sheriff's patrol officers versus 3.3 million cashiers). But the BLS workplace homicide statistics should send a shiver down the spine of any parent whose child is thinking of working a cash register. 

Overall, there were exactly 500 workplace homicides in 2016, up from 417 in 2015. The BLS has compiled a detailed table of gruesome statistics, revealing…

—409 men and 91 women were murdered on the job in 2016

—394 of the homicides were shootings (79 percent)

—152 workplace homicide victims were murdered by a robber

—78 were murdered by a domestic partner or relative (40 percent of the women killed)

—66 were murdered by a co-worker

Although firearms accounted for the great majority of workplace homicides, a wide variety of other instruments were responsible for some of the deaths including 3 murders by rebar, 7 by passenger vehicle, 1 by mallet, and 1 by tarp. 

Among workers at convenience stores and fast-food restaurants, 88 were murdered at work in 2016. Among those working for local law enforcement—including police officers as well as clerical and other staff—57 were killed on the job.

Source: Bureau of Labor Statistics, There were 500 Workplace Homicides in the United States in 2016

Working Longer Is More Powerful than Saving More

Yadda, yadda, yadda...you've heard it all before. Work longer, claim Social Security benefits later, and you will have more money in retirement. You may have heard it before, but you haven't seen evidence as convincing as this. A National Bureau of Economic Research study computes the power of working longer relative to saving more, and it's mind boggling...

• Let's say you're relatively young and want to increase your standard of living in retirement. So you decide to save more in your 401(k). You save 1 percentage-point more for 30 years. How much longer would you need to work to equal 30 years of additional savings? Three months. 
• Let's say you're relatively old and want to increase your standard of living in retirement. So you decide so save more in your 401(k). You save 1 percentage-point more for 10 years. How much longer would you need to work to equal 10 years of additional savings? One month.

There are a number of assumptions and a flurry of calculations behind these numbers, of course, but the bottom line is this: "Our primary conclusion is that working longer is relatively powerful compared to saving more for most people."

Source: National Bureau of Economic Research, The Power of Working Longer, Working Paper 24226 ($5)

Fastest-Growing Entertainment Categories

The average household spent $2,913 on entertainment in 2016, only 3 percent more than the $2,828 of 2006, after adjusting for inflation. But spending has surged in some categories over the decade. These are the five entertainment categories with the fastest growth in average household spending between 2006 and 2016, after adjusting for inflation...

1. Streamed and downloaded video: The average household spent just $1.23 on this category in 2006, and $30.06 in 2016—an increase of more than 2,000 percent as streaming and downloading video replaced watching video cassettes and DVDs. 

2. Pets: Average household spending on pets climbed 55 percent between 2006 and 2016. The $586 spent by the average household on pets ranked a lofty 21st among the items on which the average household spent the most in 2016—higher than women's clothes, alcoholic beverages, and internet service.

3. Hunting/fishing equipment. Guns are included in this entertainment category. Between 2006 and 2016, average household spending on hunting/fishing equipment increased 54 percent. The biggest spenders on hunting/fishing equipment are non-Hispanic Whites. Between 2006 and 2016, households headed by non-Hispanic Whites boosted their spending on hunting/fishing equipment by 63 percent.

4. Toys, games, arts and crafts: Average household spending on toys grew 47 percent between 2006 and 2016. While this is an impressive rise, toy spending did not grow as fast as pet spending. In 2016, the average household spent only about one-quarter as much on toys as it spent on pets. 

5. Bicycles: It may be no coincidence that average household spending on bicycles grew by an impressive 46 percent just as spending on new cars and trucks fell 23 percent. The 2006-to-2016 surge in spending on bicycles may explain why bicycle repairer is projected to be the 11th fastest-growing occupation in the decade ahead. 

Source: Demo Memo analysis of the Bureau of Labor Statistics' Consumer Expenditure Surveys 

Political Split in Ability to Discern Fake News

Is the news real or fake? Can you tell the difference? Only 50 percent of Americans think they can, according to a Gallup survey, down from 66 percent who thought they could in 1984. Gallup asked the public which of these two statements comes closest to how they feel...

• "Although there is some bias in the news media, there are enough sources of news to be able to sort out the facts." 
• or, "There is so much bias in the news media that it's often difficult to sort out the facts."

While only half of Americans believe they can sort out the facts, there are big differences by political identification. Most Democrats believe there can determine the facts. Most Republicans say it's difficult.

Percent who say there are enough news sources to sort out facts
Democrats: 72%
Independents: 46%
Republicans: 31%

Percent who say there's so much bias it's difficult to sort out facts
Democrats: 26%
Independents: 51%
Republicans: 67%

Source: Gallup, Americans Struggle to Navigate the Modern Media Landscape

Medicaid Expansion Makes a Difference

Medicaid expansion has greatly increased health care access among low-income Americans. For proof, look no further than a series of tables recently released by the National Center for Health Statistics. The tables compare health care access in 2016 for two groups of low-income adults aged 19 to 64: those who live in Medicaid expansion states, and those who don't...

• No usual place of health care: 32 percent of low-income adults in nonexpansion states do not have a usual place of health care versus a smaller 18 percent of those in expansion states.
• Did not get needed medical care due to cost: 20 percent of low-income adults in nonexpansion states did not get needed medical care due to cost in the past 12 months. For those in expansion states, the figure was only 9 percent.
• Delayed medical care due to cost: 21 percent of low-income adults in nonexpansion states delayed medical care due to cost in the past 12 months. In nonexpansion states, just 11 percent were forced to delay care.
• Did not get needed prescription medicine due to cost: 18 percent of low-income adults in nonexpansion states needed but could not afford prescription medicine in the past 12 months. The figure was just 10 percent in expansion states. 

Source: National Center for Health Statistics, Access and Utilization by Medicaid expansion status for low-income adults aged 19 to 64: Estimates from the National Health Interview Survey, United States 2016

One in Five Americans Has Past-Due Medical Bills

Medical debt looms over millions. Fully 21 percent of Americans aged 18 or older had unpaid, past-due medical bills in 2016, according to a FINRA Investor Education Foundation survey.

Women are more likely than men to have unpaid, past-due medical bills—23 percent of women versus 18 percent of men. Younger adults are more likely to have past-due medical bills than older Americans. Among adults under age 55, nearly one in four (24 percent) had unpaid, past-due medical bills. Among those aged 55 or older, the figure was 14 percent.

Source: FINRA Investor Education Foundation, Financial Capability in the United States 2016

Student Loans: "Worse than We Thought"

"Worse than we thought" — those chilling words are in the title of a Brookings report on student loan debt and repayment. Analyzing data from the Department of Education's Beginning Postsecondary Student survey, a nationally representative longitudinal survey of first-time college students, Brookings' senior fellow Judith Scott-Clayton has produced "the most comprehensive assessment yet of student debt and default from the moment students first enter college to when they are repaying loans up to 20 years later." Her analysis of the 1996 and 2004 college-entry cohorts lays bare so much bad news...

• For the 2004 cohort, "nearly 40 percent may default on their student loans by 2023."
• Behind the sky-high level of default are for-profit schools. For the 2004 cohort, the 12-year default rate for students who ever attended a for-profit school was 43 percent. For those who never attended a for-profit, the default rate was 11 percent.
• "Debt and default among black or African-American college students is at crisis levels." Among Blacks in the 2004 entry cohort who ever attended a for-profit school, the 12-year default rate was 58 percent. 

There's much more bad news in the 10-page report, which concludes: "The results provide support for robust efforts to regulate the for-profit sector, to improve degree attainment and promote income-contingent loan repayment options for all students, and to more fully address the particular challenges faced by college students of color."

Source: The Brookings Institution, The Looming Student Loan Default Crisis is Worse than We Thought

Counties Without Businesses

Some of the nation's 3,142 counties lack certain essential businesses. These "business deserts" were tallied recently by the Census Bureau's Andrew W. Hait, using data from the bureau's 2015 County Business Patterns...

Number of counties lacking employer establishments
Gas stations: 22
Commercial banks: 37
Religious organizations: 42
Grocery stores: 48
Offices of lawyers: 215
Child care services: 287
Dentist's offices: 305
Doctor's offices: 344
Hardware stores: 489
Beauty salons: 802
Drinking places: 926
Movie theaters: 1,586

While counties may have no employer establishments, Hait notes, their populations may be served by nonemployers—independent contractors and sole proprietors. He cites the example of child care service. While 2,855 counties in the U.S. have at least one employer child care service, a larger 3,117 have nonemployer (home-based) child care services.

Source: Census Bureau, Filling the Void in Counties Lacking Key Businesses

7% of Households Do Not Have a Bank Account. Why?

Seven percent of U.S. households are "unbanked," meaning they have no bank or credit union account. Researchers at the Federal Reserve Bank of New York examined the geography of the unbanked to determine the reason why—in particular, they wanted to know whether households lack bank accounts because they live in a "banking desert." Similar to food deserts (neighborhoods without grocery stores), banking deserts are neighborhoods without physical banks. In the study, the researchers defined a neighborhood as a census tract and the area within 10 miles of the census tract's center.

Several interesting findings emerged from the study. 1) Most banking deserts are in actual deserts. "Our map of U.S. banking deserts reveals that most are not in urban areas, where financial exclusion may be endemic, but in actual deserts—largely in the sparsely populated rural West," explain the researchers. 2) There is no correlation between the percentage of a state's population that lives in a banking desert and the share of the population that is unbanked. The physical location of banks, then, does not explain the unbanked. The results of a 2015 FDIC survey, cited by the researchers, also suggests physical location of banks has little to do with the unbanked. In the survey, the unbanked were asked why they did not have a bank account. Only 2 percent said it was because of "inconvenient location." More important reasons were "not enough money," "don't trust banks," and "account fees too high."

Source: Federal Reserve Bank of New York, Liberty Street Economics, The 'Banking Desert' Mirage

Growing Trouble for Workers with Little Education

"All occupations are employing workers with more formal education," reports the Federal Reserve Bank of St. Louis, and this is bad news for less-educated Americans. The Fed study examines the striking contrast between the education of workers by occupation today with the education of workers in 1950...

• Professional and technical workers: Only half had a college degree in 1950. Today, 70 percent are college graduates. One in ten professional/technical workers in 1950 did not have a high school diploma. Today the figure is close to zero. The "empiricist professional" of 1950 has all but disappeared, say the researchers. 
• Managers: In 1950, more than three out of four had no schooling beyond high school, and many did not even have a high school diploma. Today, three out of four have at least some college education, and 46 percent have a college degree. 
• Sales, clerical, craftsmen, and service workers: The great majority—close to 80 percent or above—had no more than a high school diploma in 1950. Today, more than half of sales and clerical workers have at least some college as do about 40 percent of craftsmen and service workers.
• Operative workers (machine operators), farmers, and laborers: Virtually no operative workers had a college degree in 1950. Today, 30 percent are college graduates. The figures are similar for farmers and laborers. 

"Needless to say, these changes have led to additional challenges for some groups of workers," concludes the report. "Those with lower levels of education may be unable to find jobs in occupations that their parents held with much less formal schooling."

Source: Federal Reserve Bank of St. Louis, Shifting Times—The Evolution of the American Workplace

Rural Women Have Had More Children

Among women aged 18 to 44, those in rural areas have had more children than their urban counterparts, according to the National Center for Health Statistics—1.56 children per rural woman and 1.28 children per urban woman, on average. For the NCHS study, urban was defined as living in a metropolitan area and rural as living in a nonmetropolitan area. Here are the urban-rural comparisons by number of births...

Women aged 18-to-44 with no births
Urban: 42%
Rural: 30%

Women aged 18-to-44 with 1 birth
Urban: 18%
Rural: 19%

Women aged 18-to-44 with 2 births
Urban: 21%
Rural: 26%

Women aged 18-to-44 with 3 or more births
Urban: 19%
Rural: 25%

Source: National Center for Health Statistics, Urban and Rural Variation in Fertility-related Behavior among U.S. Women, 2011–2015

Is Racism Receding?

Is racism receding in younger generations? That's one of the issues probed by PRRI and MTV in a nationally representative survey of 15-to-24-year-olds. Survey respondents were asked how much they agreed with the statement: "Racism is more of a problem for other generations than it is for my generation." The 55 percent majority of 15-to-24-year-olds disagreed, believing that racism is as big a problem for them as it is for older Americans. But a substantial 45 percent agreed, believing that racism is receding. Young White men are most likely to think racism is less of a problem in their generation, young Blacks are least likely to think so...

Racism is more of a problem for other generations (percent of 15-to-24-year-olds who agree)
White men: 55%
Hispanics: 45%
White women: 41%
Asians: 35%
Blacks: 34%

Source: MTV and PRRI, Diversity, Division, Discrimination: The State of Young America

When Will Minorities Become the Majority of Voters?

Asians, Blacks, Hispanics, and other minorities are projected to outnumber non-Hispanic Whites beginning in 2044, according to Census Bureau population projections. But when will minorities outnumber non-Hispanic Whites among voters? A Demo Memo analysis shows the minority-majority election will not occur in the time frame of the Census Bureau's population projections, which extend to 2060.

In the 2016 presidential election, non-Hispanic Whites accounted for an outsized 73 percent of voters, more than their 64 percent of the voting-age population. Behind their larger share of voters is the higher propensity of non-Hispanic Whites to vote. In 2016, nearly two-thirds of non-Hispanic White citizens cast a ballot (65 percent) versus 59 percent of Black, 50 percent of Asian, and 48 percent of Hispanic citizens.

Although non-Hispanic Whites will continue to dominate presidential-election voters in the decades ahead, their power will shrink considerably by 2060. Here is the projected non-Hispanic White share of voters in every presidential election from 2016 to 2060...

Non-Hispanic White share of voters in presidential elections
2016: 73%
2020: 71%
2024: 69%
2028: 67%
2032: 65%
2036: 63%
2040: 61%
2044: 59%
2048: 57%
2052: 55%
2056: 54%
2060: 52%

At this rate of decline, minorities may become the majority of voters in the presidential election of 2064 and most certainly in 2068.

Note: Calculations based on voting rate of citizens in 2016 by race and Hispanic origin applied to Census Bureau population projections by race and Hispanic origin. Population projections adjusted for citizenship status by race and Hispanic origin in 2016.

Quantifying the Money Pit

In the months before and after buying a house, average household spending rises by $3,700 as owners repair, renovate, and decorate their new home, according to an NBER working paper.

Examining Consumer Expenditure Survey and building permit data for the 2001 to 2013 time period, the researchers find the increased spending entirely devoted to household goods and home improvements. Other categories of spending are not affected. The added spending peaks in the first quarter after a home purchase.

Source: National Bureau of Economic Research, Making the House a Home: The Stimulative Effects of Home Purchases on Consumption and Investment, Working Paper 23570 ($5)

37% Say Football is Favorite Sport to Watch

Football is still America's favorite spectator sport, according to a Gallup survey. The 37 percent who say football is their favorite sport is below the peak of 43 percent in 2006 and 2007, but still far above any other sport. Basketball is number two, the favorite of just 11 percent of the public. Baseball is third (9 percent), and soccer is fourth (7 percent). Soccer is now more popular than auto racing (2 percent).

Men are more likely than women to name football as their favorite sport, but for both men and women football is by far the favorite...

Football is favorite sport to watch

Men: 42%

Women: 32%

Fifteen percent of Americans say they don't have a favorite sport, nearly double the 8 percent of 2000. 

Source: Gallup, Football Still Americans' Favorite Sport to Watch

Cold Is A Bigger Killer

Among weather-related deaths, cold is a bigger killer than heat, flood, storm, or lightning, according to an analysis by the CDC. In the 2006–2010 time period, cold-weather deaths accounted for 62 percent of the 10,649 weather-related deaths in the United States.

During the time period under analysis, the cold-related death rate was 4.2 deaths per million population, the CDC reports. The rate was below average among people under age 45. It was slightly above average among those aged 45 to 74. The death rate climbs steeply in the 75-plus age groups. The rate was nearly four times the average among people aged 75 to 84 (15.5) and more than nine times the average among those aged 85 or older (39.6).

Source: National Center for Health Statistics, National Health Statistics Reports, Deaths Attributed to Heat, Cold, and Other Weather Events in the United States, 2006–2010

Cell-Phone Only Households, January–June 2017

The 52.5 percent majority of the nation's households have cell phones and no landline phone, according to the latest National Center for Health Statistics report. Among adults, 52 percent live in a wireless-only household. Among children, an even larger 62 percent are in a wireless-only household. Here is the percentage of adults in wireless-only households by age...

Percent in wireless-only household
Aged 18 to 24: 64%
Aged 25 to 29: 73%
Aged 30 to 34: 74%
Aged 35 to 44: 64%
Aged 45 to 64: 47%
Aged 65-plus: 24%

Forty percent of households have both a landline phone and cell phones, and just 6 percent have only a landline phone.

Source: National Center for Health Statistics, National Health Interview Survey, Wireless Substitution: Early Release of Estimates from the National Health Interview Survey, January–June 2017

Obesity by Income and Education, 2011–14

Obesity varies somewhat by income and education, finds the CDC. Analyzing data from the National Health and Nutrition Examination Survey, which measures the heights and weights of a nationally representative sample of Americans aged 20 or older, the CDC determined the prevalence of obesity by household income relative to federal poverty level and by education.

Overall, 36 percent of Americans aged 20 or older were found to be obese in the 2011–14 survey round. Obesity is defined as a body mass index of 30 kg/m² or higher. Here are the results by income and education.

Percent obese by household income, 2011–14
39% of those with incomes ≤130% of poverty level
41% of those with incomes from 130% to ≤350% of poverty level
31% of those with incomes ≥350% of poverty level

Percent obese by educational attainment, 2011–14
40% of those with a high school diploma or less education
41% of those with at least some college experience
28% of college graduates

Source: CDC, Prevalence of Obesity among Adults, by Household Income and Education—United States, 2011–2014

Metros with the Lowest Rates of Homeownership

Among the nation's 75 largest metropolitan areas, these are the 10 with the lowest rate of homeownership in 2016, according to the Census Bureau...

1. 47.1% in Los Angeles, CA
2. 49.9% in San Jose, CA
3. 50.4% in New York, NY
4. 51.3% in Las Vegas, NV
5. 53.3% in San Diego, CA
6. 55.8% in San Francisco, CA
7. 56.0% in Tucson, AZ
8. 56.0% in Fresno, CA
9. 56.5% in Austin, TX
10. 57.5% in Providence, RI

Source: Census Bureau, Housing Vacancies and Homeownership

Why Small Town America Is in Decline

One year ago, Demo Memo posted a list of 10 demographic questions that could be answered by data released in 2017. Some of the 10 questions were answered, such as "Are Americans getting richer? The answer is yes, according to the most recent Survey of Consumer Finances. But the question, "What will save small town and rural America?" was not answered. Instead, 2017 only added to the accumulating evidence of small town ruin, from greater health problems to the disappearance of the American Dream. Not only are we at a loss to solve small town problems, but we don't even know what's causing them.

Until now: In a year-end opinion piece, The Gambler's Ruin of Small Cities, economist and New York Times columnist Paul Krugman provides a compelling explanation for small town woes. He compares the plight of small towns to gamblers betting with pennies. The gambler who starts out with the smallest number of pennies is the one most likely to end up bankrupt. This is what's known as the "gambler's ruin." Small towns today have few pennies (economic opportunities) to play with and so eventually face gambler's ruin. "It makes sense to think of urban destinies as a random process of wins and losses in which small cities face a relatively high likelihood of experiencing gambler's ruin," explains Krugman.

Unfortunately, neither Krugman nor anyone else has a way to save small towns from gambler's ruin. It's all in the numbers. As Krugman explains: "For generations we have lived in an economy in which smaller cities have nothing going for them except historical luck, which eventually runs out."