Tuesday, June 2, 2009

What Happened to the Posts?

This blog attracted 400+ "subscribers" who have been loyal readers.

Unfortunately for them, we have 5,000 loyal subscribers to our biweekly email newsletter, Jumpin' Jack Flash.

Size matters.

So we stopped contributing new posts to this and instead focused on expanding the frequency and depth of the newsletter. It's now bigger and better than ever.

If you're not a subscriber, simply sign up here (look for the "Free Newsletter" link on the left).

Thursday, February 19, 2009

The Boomer Tsunami and the Generation Wars

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.

That argument is purely anecdotal. There is no question that American consumers in general spent too much and saved too little, but I have yet to see any persuasive evidence that Boomers were any more profligate than any other generation -- in particular, that they were any more profligate than the younger generations from whom most charges of Boomer bounderism emanate. The charges may prove to be true -- I just haven't seen them substantiated.

True or not, we expect to see a ratcheting up of intergenerational rhetoric as the United States hits the wall in its ability to borrow its way out of the entitlements crisis. Politics is a zero-sum game. For every winner, there is a loser. When there's not enough money to fulfill all the promises, either Boomer retirees have their lifelong expectations dashed, or younger generations of workers see their payroll taxes increase.

In that context, I find it interesting to read a recent blog post by Boomerologist Carol Orsborn with VibrantNation.com. The word "entitlements," she contends, has negative connotations. But is it helpful to characterize Boomer expectations about their retirement benefits that way? Writes Orsborn:

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.

As a Boomer, I'm well aware that the age wave will do to the American social safety net what the Sumatra tsunami did to the coast of Thailand. But Boomers didn't set up the system, and we didn't resist tooth and nail efforts to reform it. Furthermore, we've been paying into the system our entire working lives -- we're not getting the same free ride that the early generations of beneficiaries did. Are Boomer expectations so unreasonable?

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.

The Impending Generation War

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.

Indeed the generation gap – or, rather, the gap between the entitlements we think we deserve and those we can afford -- could soon supplant race, class and gender as the most divisive force in American politics. Won’t that be fun?

The issue is simple: Our government spends much more money than it collects. The Bush administration brought us half trillion-dollar deficits. The Obama administration is giving us our first trillion-dollar deficit. Meanwhile, we still have the massive entitlements obligations of Social Security, Medicare and Medicaid to deal with – obligations that would run up the federal deficit to $4 trillion to $5 trillion a year in a $14.5 billion-a-year economy if Uncle Sam used Generally Accepted Accounting Principles like the private sector does.

For decades, the issue of deficit spending and unfunded entitlements seemed worrisome but remote. Disaster seemed so far away. Now, we can see it: The first Boomers are retiring, and the generation that would “never grow old” – and happens to be almost twice as large as the once that precedes it – soon will be drawing retirement benefits rather than paying payroll taxes. Add to that the worst recession since 1981. Seemingly overnight, everyone’s sensibilities have been sharpened to the mess we’ve made for ourselves.

At the Boomer Project, we track media articles and blog chatter, and we’ve seen a marked uptick in the number of commentators who put our current splurge of deficit spending in the context of a looming demographic and fiscal disaster. Washington Post columnist Robert J. Samuelson gloomily prognosticated that the Age of Obama could become the era in which generational conflict, or even “generational war,” could break out.

Read the rest of the column. (It gets more up-beat than what you see here!)

(Image credit: Richmond Times-Dispatch.)

Monday, February 9, 2009

The New Lingo of "Retirement"

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.

Carol Perry, with AWA Wealth Management in Nevada, has compiled a number of those neologisms for the Nevada Appeal.

Boomerang entrepreneur: Someone who retires from their career job to start up that business they've always dreamed of owning. (Sounds reminiscent of "boomerang" children who move out of the house to go to college, only to end up back at home after graduating.)

Jhobbie: Something created when a Boomer turns his/her hobby into a job. The jhobbie brings in some supplementary income and gives the Boomer an excuse to follow his bliss.

Playcheck: What you get when a Boomer takes on part-time employment or temporary work to generate enough extra income to fund travel and expensive hobbies without raiding their 401s(ks)s.

Phased retirement: What comes when employers confront the skills shortage resulting from the mass exodus of Baby Boomers from traditional jobs by enticing them back with flexible terms and that all-important health care insurance.

Friday, February 6, 2009

"Enhanced" Media Consumption

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.

Boomers Discover Facebook

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.

The Facebook phenomenon migrated out of dorms as college kids entered the working world, and then percolated upward through the age strata. Within the past half year or so, Facebook has breeched the Boomer barrier. We Boomers first started receiving "friend" requests from younger colleagues. Many of us set up Facebook profiles out of curiosity. The random friending requests turned into a trickle, and the trickle became a flow. Then came the emails from friends, and the requests to join groups, and invitations to go places, and friending requests from people we don't even know.

The Facebooking of the Baby Boomer generation was first recognized last week as a bona fide social phenomenon, as far as we have noticed, when Mackenzie Carpenter, a writer for the Pittsburgh Post-Gazette, penned an article, "OMG! Mom's on Facebook! And so are a lot of boomers."

While Facebook is still dominated by young people, nearly a third of its users are between the ages of 35 and 54, according to Comscore, an online audience measuring company. In our observation, an increasing number over 55-and-overs are signing up as well.

The online interaction raises a host of social dilemmas that Boomers have never confronted before and, as far as we know, Emily Post has never addressed in her etiquette book. What happens if you're friended by your boss -- whom you don't like? Is it better to reject an unwanted friending request outright, or is that too harsh -- is it better to simply leave such a request hanging? Closer to home: Is it appropriate for a Boomer to "friend" his 23-year-old daughter? And should he take umbrage if she turns him down?

For all the current fascination, we doubt that Facebook will ever take root among Boomers like it has with younger generations. We Boomers -- especially those of us with children at home -- are time starved. We don't have time to answer our regular email accounts, much less keep up with the barrage unleashed by Facebook or to keep our profiles continually updated. While it's pleasant to be contacted by the occasional long-lost friend, we'd rather not face the pressure of keeping up with a lifetime's worth of acquaintances. Twenty or thirty "real world" friends is about all that most of us can handle. In our book, face-to-face relationships are still best.

Monday, January 26, 2009

You Can Call Me Ray. You Can Call Me Jay. Just Don't Call Me Granddad

As Baby Boomers go about reinventing "old age," one of the time-honored traditions they're ditching as grandparents is accepting nicknames that connote advancing years. According to the Wall Street Journal, many Boomers can't abide the idea of being called "grandpa," "grandma," "gramps," "granny," and the like.

Susan Wilkofsky, a 56-year-old documentary filmmaker who is youthful looking for her years, became a grandmother last Christmas. She rejected the Yiddish appellation "bubbe" because it suggested a frumpy old woman from the old country who has an accent and wears a babushka. She settled instead on "Glamma," as in, glamorous grandmother.

When comedy writer Alan Zweibel hears the term "grandpa," he thinks of a hunched-over old man who "pees involuntarily." He opted for "Lefty" or "Sheriff."

That got us to thinking what we want to be called when first grandchild arrives. (One of us has a 25-year-old daughter, so that occasion may not be that far away.) There's a good chance that we'll end up letting the little tykes call us whatever they want -- or whatever they can pronounce. The two-year-old daughter of one of our colleagues mangled the pronunciation of her grandmother's name, Sallie, to Lahi -- and the cognomen has stuck for more than 20 years. We intend to be more proactive in regards to the selection of our own name. We're partial to Bocephus. Or, should we decide to grow whiskers, maybe Woolly Bully.

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.

(Photo credit for image of Granny Clampett: TVland.com.)

Wednesday, January 21, 2009

Encore Education

"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."

Reinventing the Family

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.
To those dynamics add a nascent trend toward quasi-families, as noted last year on this blog, in which divorced and/or widowed Boomer women live together, share expenses and form committed friendships. We don't know if anyone has coined a name for such a household -- there's a Ph.D. dissertation for a budding sociologist -- but one is needed.

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.

(Photo credit: ABC News.)

The Age of Mass Consumption Is Dead, Dead, Dead

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

Half Condo, Half Hotel

Meet David Hess, a 47-year-old business executive and father of three children who found himself divorced and looking for new living arrangements. He had three main criteria: a place where his children would feel at home on weekends, a location close to their mother's suburban house, and a situation that accommodated his extensive travel. Solution: He settled in AVE in Clifton, N.J., a hybrid between an apartment and an extended stay hotel.

AVE, a project of Korman Communities, is located near a mass transit center. It offers both furnished and unfurnished apartments, and tenants can sign a lease for the unfurnished units for six months or longer. The facility provides concierge services, cafe breakfasts, a fitness facility and weekly social events. Korman's six AVE projects around the country (three in New Jersey, two in Pennsylvania and one in Virginia) are evolving into small "neighborhoods," says Lea Anne Welsh, who developed the AVE concept for Korman.

Reports Antoinette Martin for the New York Times:

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.
The price of these units are not for the "faint of wallet," Martin observes. An unfurnished, two-bedroom, two-bathroom suite in the Clifton facility can range from $2,595 to $3,330 a month when leased on a yearly basis. That's pretty steep, but it's probably no more than many tenants would be laying out for mortgage payments on a single-family dwelling in the tonier subdivisions ringing New York City, Philadelphia or Washington, D.C., much less the cost of maid service and health club dues.

If Hess is typical, affluent Baby Boomers are leading the demand for these hyper-flexible, low-maintenance living arrangements. Divorced Boomer executives have lots of disposable income but their lives are in transition, and they are super short on time. The last thing they want is the headaches that come with maintaining a single-family house and garden. If the apartment complex provides concierge services that make life a little easier, so much the better. A flexible lease length gives them the time to look for more permanent arrangements, but they may well conclude they like the hassle-free lifestyle just fine.

Korman's price point limits the market to the top one or two percent of income earners in the country. But don't be surprised to see imitators fielding stripped-down versions of AVE -- less luxury, fewer premium services -- that package a mix of convenient location, low maintenance and extra amenities for stressed-out, time-deprived divorced moms and dads.

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

69.8 -- the New 65

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

Three Times a Week

There was an old Woody Allen sketch (I forget the movie) that went like this: Woody's got marital problems, and the psychoanalyst asks him how often he has sex. "Hardly ever. Only three times a week."

The scene switches to Woody's movie wife. Her psychoanalyst asks her how often she has sex. "Alllll the time," she says. "Three times a week."

That scene came to mind when reading statistics from an AARP study, "Retired Spouses," showing that retirees have sex less often than before they were retired. Among the many, many findings in the study (yes, we confess, we're focusing on the most salacious) is that 22 percent of retirees report having sex less often.

That's hardly a surprise. Retired people tend to be older than working people. The older you are, the less likely you are to have sex. End of story. But here's the titillating part: 25 percent of men say they have less sex while only 19 percent of women say they have less.

What does that tell you? Either six percent of the women are getting some action on the side with younger, non-retired men (We'll let you draw your own conclusions how likely that is) or there's a major difference in perceptions. Here's our guess (based on five or so decades of being male): Men are more likely to notice a fall-off in sexual activity. They're also more likely to brood about it.

If you don't believe us, just ask Woody Allen's psychoanalyst.

Wednesday, December 3, 2008

Believing in Miracles

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

The Uber Boomers

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.
And don't get us talking about GenY, whose women comprise a growing majority of college graduates and will be the top earners of the future!

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
What does that leave for us males? An 83% share of pro basketball tickets? A 92% share of Tom Clancy SpinterCell games for the PC? For beta males, it's all downhill from here.

(Photo credit from "The Devil Wears Prada":

Monday, December 1, 2008

When Boomers Get the Boot

While some observers fret about what will happen when Baby Boomers retire en masse -- oops, there goes the institutional knowledge that keeps the organization humming -- many corporations see layoffs of high-salaried Boomers as a way to quickly prune expenses during periods of economic distress. Nowhere is that trend more evident today than in the news gathering business, both print and television.

Writes the New York Times:

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.

Local newspapers and televisions are hit harder than most industries, buckling under the double whammy of an acute advertising recession and a shift within advertising to the Internet. Watching these two industries implode is like watching the free-fall of the steel industry in the 1970s -- with the difference being that no one is quite sure there's a bottom for newspapers and local broadcast.

At the Boomer Project, we've always been sanguine about the employment prospects for Boomers. Retirement prospects are another matter entirely -- Boomers have barely saved a fraction of the funds they'll need to live a life of ease in their post-65 years. But so many industries have been sounding alarums about looming labor shortages when Boomers retire that we assumed Boomers could make up for their savings deficit by working as long as they wanted.

Or maybe not. When desperate times call for desperate measures, Boomers' seniority-padded salaries are a highly visible liability. (The article doesn't even touch upon the delicate subject of the disproportionate impact that Boomers have on an organization's medical insurance rates.)

What's a Boomer to do? One option: Start your own business when you're a GenXer. You're pretty safe from arbitrary layoffs when you're the boss. Another option: Start preparing for that second career. The New York Times article described how Ernie Bjorkman, a Denver, Co., television anchorman landed on his feet after getting sacked. Acting on a dream of working with animals, he'd completed a two-year veterinary technician program two weeks before getting the pink slip. Said Bjorkman: "I'm ready to reinvent myself."

Friday, November 28, 2008

Boomer Consumers and the New Fru

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:

  1. 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."
  2. 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.
  3. 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.
In addition, a guest Op/Ed in today's New York Times by the chairman of Morgan Stanley Asia about the "Dying of Consumption" contains similar sentiments.

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.
Modern marketing as we've known it since the emergence of TV has been all about consume, consume, consume. The more you consume, the better a citizen you are -- you're fueling the economy. But that's going to change as consumers embrace the New Fru mindset.

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

Financing the Age Wave

When all those millionaires, mutual fund managers and hedge fund investors yank their money out of the stock market, they have to put it somewhere. With the backing of billionaire private equity investor Thomas H. Lee, Bethesda, Md.-based Midcap Financial is one place that money is winding up.

Midcap Financial announced its formation Monday with $500 million in private equity commitments. "Demand for healthcare services is expected to increase markedly as the Baby Boomer generation ages, creating higher demand for the full range of healthcare services," said CEO Howard Widra, founder of Merrill Lynch's healthcare finance division and former president of GE Healthcare Financial Services.

According to Eric Wicklund at Healthcare Finance News, the company will fund the following types of opportunities:
  • 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.

You'll Miss Us When We're Gone: Boomers in the Electric Utility Industry

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.

There's just one caveat: Digital technologies require a mundane, 19th-century technology to function: electricity. And guess who makes electricity? Baby Boomers.

Without a massive investment in new electrical generating and transmission capacity, industry experts say the United States faces delibitating brownouts and blackouts in just a few years. There are many barriers to increasing electricity supplies, but there's one that people aren't much talking about: The Boomer retirement wave.

Kevin McCarty talks about the problem in Electric Light & Power:

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.
After years of cost cutting and downsizing, electric power companies have recruited very few young people. As it happens, few young people are drawn to the industry, which is regarded, with some reason, as antique if not downright antiquated. They don't think much of the industry's corporate culture either, which they regard as stodgy and hierarchical.

Those stereotypes may or may not be true. But GenYs won't be feeling terribly smug when the lights -- and computers, and the Internet, and FaceBook, and Twitter and the entire digital infrastructure of their lives -- blinks off.

Friday, November 21, 2008

Today's Boomers: Tomorrow's Over 65ers

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.

The Continuum of Care Needs of the Elderly in South Dakota Task Force (or CCNESDTF for short -- just kidding!), has made numerous recommendations based on the study's findings. According to the Rapid City Journal, one recommendation is to create a single-entry system -- an office that can direct patients and caregivers to needed services.

States across the country are finally beginning to wrestle with these issues. If we might be so immodest, we'll take this opportunity to put in a plug for the approach taken by our home state, the Commonwealth of Virginia. Government can address only pieces of the puzzle. Meeting the Age Wave challenge requires a comprehensive effort. The privately funded Older Dominion Partnership is engaging not only government agencies, but the private sector (hospitals, health care providers, insurance carriers and more) as well as not-for-profits to develop a coordinated response to several hot-button issues.

Recognizing that today's Baby Boomers are tomorrow's over-65 set, the Boomer Project's own John Martin has been a key player in pushing the Older Dominion initiative forward. We'll have more exciting news to report in the new future.

Valuable Insights into the Hearts, Minds and Wallets of Today's Baby Boomers

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.