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Tuesday, June 2, 2009
This blog attracted 400+ "subscribers" who have been loyal readers.
Posted by Matt Thornhill & John Martin at 1:42 PM
Thursday, February 19, 2009
In our last post ("The Impending Generation War"), we alluded to the rising crescendo of Boomer bashing, replete with generational stereotypes of Boomers as selfish and self-absorbed creatures of 1960s hedonism who sold out their counter-culture ideals, became a generation addicted to mass consumption, and spent, borrowed, and defaulted the U.S. economy into its economic predicament.
We concede to let the government withhold a substantial portion of the money we have earned from every single paycheck in exchange for benefits to be paid to us down the road.
I remember the very first time I received a paycheck, when I was in my early 20's. I'd been counting on every penny of my slim salary for living expenses. What a shock to see how much had been taken out for this then too-remote-to-even-conceptualize notion of "retirement." I must admit that on some levels, the amount taken out for Social Security, taxes, healthcare, 401(k)s and God knows what else, has never lost its shock value.
But here's the thing: I may have disliked the chunk of income that went missing from my paycheck every other week. But I never thought to question that grandma and grandpa and later mom and dad weren't deserving of their Social Security benefits. Society acknowledging the reality of physical and mental diminishments that come with age, and taking care of the elderly was the reality within which our generation was raised.
The only thing unreasonable about Boomer expectations is that they fly in the face of the irrefutable reality that Uncle Sam can't afford to keep the promises made by an earlier generation of politicians. Something has to give. As part of any entitlement overhaul, Boomers will have to work longer, have benefits curtailed and/or pay more into the system. I think they'll be willing to make those sacrifices. But it sure would help if the Boomer bashers dialed back their rhetoric. Demonizing a single generation won't get us any closer to reform.
Update: Regarding my assertion above that Boomers were no more profligate than any other generation, the McKinsey Global Institute's 2008 study, "Talkin' 'bout My Generation," does say that Boomers spent more of their income at comparable stages of the life cycle than the Silent Generation did. This is undoubtedly true. But McKinsey is silent on the issue of Gen X and the Millennials, whom, I would suggest, were as derelict in salting away savings as the Boomers were.
If you thought America’s culture wars, foreign policy debates and presidential campaigns generated heated rhetoric, you ain’t seen nothing yet. The looming conflict between the generations over entitlements for the graying population could shape up as the most bruising domestic issue since the Civil Rights movement.
Monday, February 9, 2009
Baby Boomers will reinvent retirement like they've reinvented every other institution they've touched on during their passage of life. And the ever-adaptable English language is birthing new phrases to describe new social phenomena that are just now surfacing.
Friday, February 6, 2009
First came the Super Bowl, then the Super Bowl ads, and then the hype over the Super Bowl ads that exceeded the hype over the football game. Then followed video streaming on the Internet, which inspired more replays of the ads than of the game highlights.
In the past two or three years, Americans have taken yet another step toward the transformation of the championship football game from an athletic contest into a media phenomenon. Millions of us now view Super Bowl ads that don't even run on the Super Bowl.
A case in point this year was GoDaddy.com's ad featuring Danica Patrick, the female Indy race car driver, in a spoof of a Congressional hearing into a major league "enhancement" controversy. Under questioning, a series of voluptuous young women vehemently deny being "enhanced." Then the camera shifts to the comely but -- ah, shall we say -- slender Ms. Patrick, who announces, "Yes, I've enhanced." The crowd gasps. "It's true," she continues. "I have enhanced my image with a domain and web site from GoDaddy.com." The end of the ad invites viewers to visit the GoDaddy.com web site where they can view a "hot" Internet-only version.
The hot Internet ad generated more than 1.6 million views just on the Spike TV web site. As for the GoDaddy.com web site where most viewers were directed, let's just say it's a good thing that GoDaddy.com is an Internet Service Provider or its servers might have crashed.
Boomers have a reputation as being less technologically savvy than their Millennial (Gen Y) children to whom such tasks as setting up Facebook pages, texting messages on their cell phones and Twittering are second nature. But that impression isn't entirely fair. Les us not forget, Boomers did invent the personal computer. (Anyone remember Bill Gates and Steve Jobs?) Read more.
Baby Boomers long considered Facebook, birthed in a Harvard College dormitory in 2004, as a frivolous Internet novelty that gripped young people but was of no conceivable interest to serious people. That was then, this is now.
Monday, January 26, 2009
Meanwhile, Boomers are reinventing time-honored grandparental roles in more profound ways. It's worth taking another look at Matt Thornhill's column, tagged "The Nanas and the Papas," written a year ago.
Wednesday, January 21, 2009
"Animal House," the comedy classic starring John Belushi, was set in 1962. But the anarchic attitude of the n'er-do-wells at the Delta House fraternity reflected the Baby Boomer zeitgeist of 1978, the year the movie was released.
Boomer college kids of that era went on to graduate (most of them.... eventually), get jobs, marry, raise kids, and... go back to college.
Adults aged 50 and older now account for 3.8 percent of U.S. students enrolled in courses at degree-granting colleges and universities, and that number is increasing, according to Mary Beth Lakin, associate director for the center of Lifelong Learning at the American Council on Education.
"People are living longer, and they are thinking about what they will do for the next 30 years," Lakin told the Badger-Herald in Wisconsin. "Also, given our uncertain economic times, a lot of older adults are thinking of staying in the work force rather than leaving it at a traditional retirement age."
University tuitions can be a barrier for Boomers in the 50s, who don't have a lifetime ahead of them over which to amortize the cost of a college education. But, then, there's no pressure to earn a full 120 credit hours, and many universities allow older students to audit courses for free. Courses at community colleges, of course, are much more affordable.
According to life cycle theory, human beings of all generations tend to de-emphasize material accumulation in favor of rewarding experiences. The back-to-school movement among Boomers is a vivid illustration of that theory. As the best educated generation in history when they came along, Boomers are even more likely than their elders to seek the intellectual stimulation of college-level classes.
Colleges will benefit, as will companies like The Teaching Company, which markets DVDs of the "great courses," and Rosetta Stone, which sells language learning on DVDs. Expect to see more travel packaged as educational tourism. While some Boomers will go for encore careers, expect many more to favor "encore education."
A hallmark of American society for the past century has been the atomization of family life as Americans first embraced the nuclear family of mom, dad and kids in place of multi-generational households and then busted up the nuclear family through divorce. In a recent column published in the Richmond Times-Dispatch, Jim Bacon opined that the phenomenon of shrinking household size appears to be reversing itself. Key quotes:
There are many ... reasons to believe that households will grow larger, such as the prolonged adolescence of Gen Y. Whether young people simply refuse to grow up (the premise of the movie, "Failure to Launch,") or they're so saddled by student loans and so stymied by the high cost of housing, many are deciding that living in their old room with the twin beds and study desk isn't a bad alternative to poverty.
Meanwhile, members of the Silent Generation are resisting the idea of being shunted into impersonal nursing homes. Seniors want to stay connected with family and friends -- and an increasing number of middle-aged families are accommodating their parents. Subdivision builders report a spike in demand for granny flats and other detached dwelling units for the grandparents. Baby Boomers are even more repelled than their elders by the prospect of living in "old folks homes." After letting their adult Gen Y children back into their homes, they may well expect the Gen Ys to return the favor some day.
Since the publication of "Reinventing the Family," we came across an article written by ABC News. From 1990 to 2000, the network reported, homes in which three or more generations live together grew more than 38 percent. As lifespans lengthen and four- and five-generation families become more common, an increasing number of those family members will likely choose to live together. Also driving that trend, omitted in our column, is the increasing number of immigrant families from cultures where multigenerational living is the norm.
In a Christmas-season column for the Richmond Times-Dispatch, Matt Thornhill heralded the dawn of "responsible consumerism," or, as he referred to it more colorfully on this blog, the "new fru." While everyone is awakening to the obvious, that consumers are curtailing their borrowing and spending in response to the recession, Matt contends that the roots of parsimony go deeper than a downturn in the business cycle. Some choice quotes:
The [Baby Boom] generation that put the mass into consumption is now at the stage of life where people naturally shift focus from the material to the ethereal. What’s fascinating (or worrisome, if you’re in a retail or consumer-products business) is that the impact of this shift on America’s consumption-driven economy is just beginning.
This shift away from spending by our largest demographic group coincides with a larger societal trend towards sustainability. Consumers of all ages are thinking more about the environmental impact of their purchase behavior and consumption patterns. In a national study we conducted among all adults in late summer, before the economic meltdown, 80% of all consumers told us they think or act in a “green,” or environmentally responsible fashion. Green is mainstream, and here to stay...
One last ingredient to this perfect storm: the worst recession since the Great Depression. Put all three trends in a blender and the future for marketers is grim indeed. Mass consumption, the underpinning of the American economy since 1946, is dead, dead, dead.
Tuesday, December 30, 2008
Dozens of no-longer-married adults, many of them with children, have signed leases for a year's term or longer at each of the complexes [Welsh] said; divorced fathers account for about 25 percent of all tenants at the 785 units in New Jersey and 508 in Pennsylvania.
Just another wrinkle in the ever-changing pattern of family structures, living arrangements and housing options brought to you courtesy of the Baby Boomer generation.
(Photo credit of Korman facility in Arlington, Va.: AKA.)
Friday, December 19, 2008
Forty may be the new 30, but the braniacs in charge of the U.S. Social Security and Medicare programs haven't figured out what to do about it. As life expectancies lengthen, so do taxpayer liabilities for pensions and health care with the consequence that, sooner or later, both will default on their obligations to the public.
Warren Sanderson and Sergei Scherbov may have part of the answer. Instead of basing pensions and other benefits upon peoples' chronological age (how long they've been alive), we should consider peoples' "prospective" age (how long they're expected to live.)
The conventional definition says "old age" starts at age 65. But Sanderson, an economics professor at Stony Brook University, and Scherbov, a researcher at the Vienna Institute of Demography, question the relevance of that definition as life spans lengthen. Consider: In 1952 the average 30-year-old French woman had an average life expectancy of 44.7 more years. By 2005, the average 40-year-old French woman had an average life expectancy of.... 44.7 more years. Chronologically, the 40-year-old woman was a decade older. But was she truly "older"? (As you ponder that question, consider that the photo above captures French actress Catherine Deneuve at age 40 in the movie, "The Hunger.")
In their paper, "Rethinking Age and Aging," in Population Bulletin, the demographic duo define "old age" as the age at which, based on the average life expectancy of a given society, a person has 15 years left to live. In the United States, that age is 69.8 -- nearly five years chronologically older than the standard retirement age today. By the year 2045, "old age" is forecast to commence at 72.8.
Think what would happen if "old age" benefits (Social Security, Medicare, pensions) were geared to life expectancy rather than chronological age. Americans would have to work longer before collecting the gold watch and planning for that cruise around the world. But they'd still have a social safety net to cover them when they became frail and infirm. On the flip side, society could far better afford the social safety net. Instead of an "age dependency ratio" of 37.1 "old" people supported by 100 in the working-age population by the year 2045, the ratio would be only 21 per 100.
Sanderson and Scherbov don't go quite that far. On the one hand, they argue that basing pensions on a fixed chronological age provides a windfall for old guys who paid into the system for a fixed number of years then collect benefits over ever-lengthening periods of retirement. On the other, basing pensions on a fixed prospective age would be unfair to older generations. "As life expectancies increase," they write, "they would have to pay into the system for more and more years, only to receive benefits over a fixed average period."
One solution, they suggest, would be to build payments and benefits around the average of chronological and prospective ages.
As Baby Boomers, we'd like to start raking in benefits by 65 just as much as the next guy. On the other hand, we'd like there to be a social safety net when we need it. Social Security might conceivably survive in its current form, but Medicare is a goner. It seems like Sanderson and Scherbov have provided a rational and objective criteria for recalibrating social expections and salvaging our "old age" protections.
(Photo credit: Fluffiest Blog in the West.)
Thursday, December 4, 2008
Wednesday, December 3, 2008
A working hypothesis of the Boomer Project is that Baby Boomers, like every generation, follow predictable life cycles. And one of those life cycles is an increasing preoccupation with spiritual matters the closer one gets to meeting one's maker. Although Boomers lived through the 60s-era rejection of church attendance and traditional religious denominations, we expect them to find non-institutionalized ways to express their spirituality as they get older.
AARP explores the spiritual dimension of Baby Boomers in "Miracles, Divine Healing and Angels," published August. The findings were predictable in many ways: Women are more likely to believe in miracles, divine healing and angels than men are. Hispanics are more spiritual/religious than white non-Hispanics. Southerners are more likely to believe in divine forces, and so are lesser educated people. None of the differences were dramatic -- Americans are a religious people -- but they are measurable.
Here's what confounded us: Age appears to be the least significant of the variables tested.
Here's a breakdown of the responses:
The percentage of 55 to 64-year-old Boomers (the red bar) describing themselves as "very" spiritual/religious was one percentage point higher than that of their younger, 45 to 54-year-old brethren. But the number describing themselves as "somewhat" spiritual/religious was four percentage points lower, and the number responding "not at all" was three points higher.
That's hardly an earth-shaking shift, but it is surprising. Despite being a few steps closer to the eternal hereafter, older Boomers are marginally less spiritual than their younger Boomer brethren.
Don't misinterpret this data. It does not say that Boomers are growing less spiritual as they get older. It says that 45 to 54-year-olds are less spiritual than the decadal cohorts that precede and follow them. It's entirely possible that the cultural revolutionary fervor of the '60s had its greatest impact on the youth of that era, and that the '60s generation has been less spiritual/religious than other generations through the years.
If so, the gap appears to have narrowed. Perhaps the real story is that, given where they started 40 years ago, Baby Boomers have traveled the longest spiritual journey of all.
(Hat tip: Paul Briand at Examiner.com; image credit: spiritualarts.com.)
Tuesday, December 2, 2008
It's a women's world. Alpha males may dominate the rarefied heights of the power/money hierarchy in the United States, but increasingly women -- make that Boomer women -- are running the rest of society.
The facts below come by way of Meredith Barnhill at NoLa.com, who got them from the She.conomy marketing blog, which is a bit roundabout, so we can't vouch for chain of transmission. But the numbers seem pretty plausible -- and pretty darned scary if you're a beta male who's not at the apex of the power/money pyramid.
- High-net-worth women account for 39% of the country's top wealth earners; 2.5 million of them have combined assets of $4.2 trillion. More than 1.3 million women professionals and executives earn in excess of $100,000 annually. 43% of Americans with more than $500,000 in assets are female.
- Over the next decade, women will control two thirds of consumer wealth in the United States and be the beneficiaries of the largest transference of wealth in our country's history. Estimates range from $12 to $40 trillion. Many Boomer women will experience a double inheritance windfall, from both parents and husband. The Boomer woman is a consumer that luxury brands want to resonate with.
Actually, it doesn't matter who makes the money, because women already control the spending of it, accounting for 85% of consumer purchases of everything from autos to health care:
- 91% of New Homes
- 66% PCs
- 92% Vacations
- 80% Healthcare
- 65% New Cars
- 89% Bank Accounts
- 93% Food
- 93 % OTC Pharmaceuticals
(Photo credit from "The Devil Wears Prada": azfamily.com.)
Monday, December 1, 2008
Across the country, longtime local TV anchors are a dying breed. Facing an economic slump and a severe advertising downturn, many stations have cut costs drastically in the last year, and veteran anchors, with their expensive contracts, seem to be shouldering a disproportionate share of the cutbacks. When station managers are forced to make cuts, hefty anchor salaries are a tempting target. ...
When the anchors depart, they take decades of experience and insight with them. “Basically, you replace someone who knows City Hall with someone who can’t find it,” said John Beard, who lost his job at KTTV last December after 26 years as a news anchor in Los Angeles.
Friday, November 28, 2008
A few weeks ago we reported on the "New Age of Frugality" that folks like BusinessWeek and others sensed was on the horizon.
Well, the "New Fru," as we like to call it, is here. Today's Wall Street Journal has three items that prove it:
- Full-page ad by DeBeers on the back page of the front section with the headline "Here's to Less." The short copy is all about our misguided interest in possessions that "we do not treasure." Enter the diamond, something that can be "passed down for generations."
- Article about the dramatic fall-off in luxury car sales in October and the first half of November. The reasons given are the recession, as well as a lack of desire by those with enough money to buy a luxury car to be so showy these days. Maybe this is a trickle-up mindset the very rich are learning from the rest of us.
- Essay about the rediscovery of a class of Americans who have been shunned for decades: those prudent Americans -- the ones who pay their credit card bills and save money.
Based on all the signs, we're ready to predict the New Fru isn't going to go away when the recession ends, whenever that is.
The New Fru is a permanent shift in consumer behavior, driven by the "Perfect Storm" of a variety of factors:
- The "Great Depression"-like recession we're in is certainly the kick-start to this shift in consumer behavior. If you don't have much money to spend, you spend much less.
- The emerging "Green" movement away from consumables and more toward renewables is another factor. Fully 80% of Americans in our recent "Green Matters" study either think or act in environmentally responsible ways. Our grandparents and great-grandparents never threw anything of use away. They couldn't afford to. In short order, our kids and grandkids will be doing the same. It's a life lesson they won't forget.
- Boomers, the consume-now-and-pay-never generation, have reached that stage of life where the goal is less about acquiring more materials things and more about acquiring better and more enriching experiences.
Interestingly, consumers understand the New Fru better than our government leaders do -- they still want to bail out banks and the auto industry, and send us "stimulus checks" so we'rell go spend and be good consuming citizens. But we're not going to spend. We're going to pay down debt and save. Pretty soon, we're going to want the government to do the same (probably within two years -- to borrow from Joe Biden, mark our words).
We're report more on the New Fru mindset and try to offer suggestions to help marketers make the shift. Some, as we've reported, are ahead of others.
One good starting point is to spend 20 minutes watching The Story of Stuff over this holiday weekend. Even if the facts cited are off by 50%, it's quite an eye-opener for anyone trying to understand consumer behavior.
Wednesday, November 26, 2008
- Real estate loans to senior housing, skilled nursing facilities and medical office buildings.
- Working capital loans collateralized by third-party accounts receivable and their assets.
- Leveraged loans to healthcare companies backed by private equity sponsors.
- Life sciences loans, primarily to pharmaceutical, biotech and medical device companies.
It's a digital world, baby, and the GenYs are masters of the digital universe. GenY brains are wired to think, perceive, emote and interact in a technology-saturated world. The achievements of Baby Boomers pale in comparison to the microchip-leveraged accomplishments we can expect to flow from the younger generations.
The energy utility industry averages the second-highest average employee age among 54 industries studied. Nearly one-fifth (19.2 percent) of industry workers are within five to seven years of retirement. The most alarming statistic involves age distribution. ... The average age of an energy utility employee is steadily rising; since 1995, the number of industry workers age 55 and older has increased 225 percent.
Friday, November 21, 2008
South Dakota has peered into its demographic future and doesn't like what it sees. By 2025, the number of South Dakotans older than 65 will double, constituting a quarter of the population. The number with disabilities will increase from 42,000 to 50,000. The state needs to redistribute nursing home beds from rural areas to urban, and it needs to increase at-home care services by a factor of four.
This blog is by the authors of Boomer Consumer: Ten New Rules for Marketing to America's Largest, Wealthiest and Most Influential Group, on sale now.
Here is where you'll find information referenced in the book, as well as updates, news and perspectives from Matt Thornhill and John Martin, founders of the Boomer Project.