American Demographics Summer 2019

SUMMER 2019

Welcome to the Age of Grandparents

Where spending is part of loving

What Americans Think About Race

A Rise in Homeownership

Are happy days ahead for the housing market?

New report shows changes in attitudes Is Rural America Growing Again?

A look at counties adjacent to metropolitan areas

On the Bookshelf

New books are putting population trends into focus

RETAIL REALITY DIVERSITY AND DEMOGRAPHICS COLLIDE

Jonathan says she is changing genders again.

IN THIS ISSUE OF

SUMMER 2019

PUBLISHER Phillip Russo

EDITORIAL STAFF

4 6

American Demographics is Back!

Brad Edmondson Cheryl Russell George Puro

Welcome to the Age of Grandparents

Dane Twining Tom Prendergast

7

What Americans Think About Race CREATIVE DIRECTOR

8

etail Reality: R Divertsity and Demongraphics Collide

12

Is Rural America Growing Again?

14

A Rise in Homeownership

Melissa Subatch

American Demographics and americandemographics.com are owned by the Private Label Manufacturers Association, 630 Third Avenue, New York, N.Y. 10017 and licensed for publication by Kent Media, 240 Central Park South, New York, N.Y. 10019. Periodicals postage

15

This Month’s Book Shelf: New Books Are Putting Population Trends into Focus

paid at Macedonia, OH and additional mailing offices.

All rights reserved under the Library of Congress.

No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopying and recording, or by any information storage or retrieval system, except as may be expressly permitted in writing by the copyright owners.

SUMMER 2019

Welcome to the Age of Grandparents

Where spending is part of loving

What Americans Think About Race

A Rise in Homeownership

Are happy days ahead for the housing market?

New report shows changes in attitudes Is Rural America Growing Again?

A look at counties adjacent to metropolitan areas

On the Bookshelf

New books are putting population trends into focus

RETAIL REALITY DIVERSITY AND DEMOGRAPHICS COLLIDE

American Demographics is Back!

elcome to the third issue of the new American Demographics magazine. A glimpse at the table of contents documents once again why the magazine was founded and why it serves a mission that no other publication attempts: to record and explain the demographic trends occurring in our country so that planners and executives can create or adjust social and business strategies.

We hope that the stories that we select achieve this purpose. We hope that you, as readers, will guide us to issues and questions on your minds. For more than 25 years, American Demographics was the place to go for the bigger picture. Now American Demographics is back and we plan not only to explore forces at work but to find new means of communicating ideas and experiences.

We look forward to your readership and support.

American Demographics is back and we look forward to your readership and support.

to subscribe, visit: www.americandemographics.com

4

AMERICANDEMOGRAPHICS I SUMMER 2019

“I know that Jonathan is only one person but I think we should alert American Demographics.�

By Cheryl Russell

Welcome to the Age of Grandparents ncreasingly, the old outnumber the

grandchildren, and so do many Gen Xers. Grand-

young. Globally in 2018, for the first

children are cumulative, which is why the older

time, the number of people aged

you get the more you have. Gen Xers have an aver-

65 or older surpassed the number

age of 2.5, boomers 4.0, and the silent generation

under age 5, according to a BBC analysis.

average 6.3.

That’s old news on this side of the Atlantic, where

Grandparents spend a lot on their grandchildren

people aged 65 or older have outnumbered

—an average of $2,652 each year, AARP calcu-

preschoolers for decades. The 65-plus set in the

lates, for an annual total of $179 billion. Gifts are

United States outnumbers not only preschoolers

the most common expenditure. Fully 86 percent

but most elementary schoolers as well. In 2018,

of grandparents buy gifts for their grandchildren.

there were almost as many people aged 65-plus

(What’s up with the 14 percent who do not?)

(52.4 million) as there were children under age

Average annual spending on gifts for grandchil-

13 (52.6 million). By 2035, people aged 65 or older

dren is $805. More than one in four grandpar-

will outnumber children under age 18, according

ents (26 percent) spend money on vacations

to Census Bureau projections. That’s a lot of

with grandchildren (an average of $1,746), and

grandparents.

21 percent help out with school/college tuition (an average of $4,075). A substantial 14 percent

Not everyone with a Medicare card is a grandpar-

of grandparents provide their grandchildren with

ent, of course. But most are. According to AARP,

day-to-day expenses.

83 percent of Americans aged 65 or older have grandchildren. Becoming a grandparent starts

Most grandparents are fortunate enough to live

well before age 65 for most. Among men and

close to their grandchildren. Only 29 percent live

women aged 30 or older who have a child aged 15

more than 50 miles from the nearest grandchild.

or older, most are grandparents, a Census Bureau

But long-distance relationships are common, too.

survey finds—61 percent of women and 57 percent

Most grandparents (52 percent) have a grand-

of men. In round numbers, that’s 70 million doting

child who lives more than 200 miles away, reports

grandparents, which explains why grandchildren

AARP. To close the distance, grandparents depend

are such a big topic of conversation any time there

mostly on the telephone, with 46 percent saying

are two or more adults in the same room.

they talk to a grandchild on the phone once every couple of weeks or more often. A smaller 28 per-

6

While some become grandparents in their thirties,

cent text grandchildren that often, 24 percent vid-

the average age of becoming a grandparent for the

eo chat, 18 percent engage with grandchildren on

first time is 50, reports AARP. Most boomers have

Facebook, and 16 percent email.

AMERICANDEMOGRAPHICS I SUMMER 2019

What Americans Think about Race o matter your opinion of it, the Black Lives Matter

“lack of will”—arguably an overtly racist opinion. By 2018, the 35

movement is making a difference. Since the move-

percent who cited lack of will was less than the 39 percent who

ment’s inception, a growing share of Americans are

blamed discrimination.

blaming discrimination rather than other factors for the lower socioeconomic status of blacks relative to whites.

This attitudinal divide between whites and blacks is laid bare in the Pew Research Center report, Race in America 2019. How

Let’s explain this trend by starting at the beginning of the Black

well do blacks and whites get along in America today, asks Pew.

Lives Matter movement. In 2012, 17-year-old teenager Treyvon

The majority of non-Hispanic whites (58 percent) say blacks

Martin was shot to death by neighborhood watch volunteer George

and whites get along pretty or very well. The majority of blacks

Zimmerman. Also in that year, only about one-third of Americans

(also 58 percent) say blacks and whites do not get along. Is too

said discrimination was the main reason blacks have worse jobs,

much attention paid to race and racial issues in our country, asks

income, and housing than whites, according to the General Social

Pew. Half of non-Hispanic whites say yes, too much. Two-thirds of

Survey from the National Opinion Research Center.

blacks say too little attention is paid to race and racial issues. Pew asks which is the bigger problem for the country—people seeing

In 2013, Zimmerman was acquitted of Martin’s death, Black Lives

racial discrimination where it does not exist, or people not seeing

Matter was born, and the public’s awareness of the differential

racial discrimination where it does exist? The majority of non-His-

treatment of blacks (aka discrimination) by the criminal justice

panic whites (52 percent) say the bigger problem is crying wolf—

system began to rise. Between 2012 and 2018, the percentage

seeing racial discrimination where it does not exist. The majority

of Americans who blame discrimination for the lower socioeco-

of blacks (84 percent) say the bigger problem is ignoring injustice

nomic status of blacks climbed by more than 10 percentage

—not seeing racial discrimination where it does exist.

points—from 35 percent in 2012 to 46 percent in 2018.

Pew asks about the treatment of blacks in a variety of situations: Still, that’s less than half of Americans who see discrimination as

dealing with police and the criminal justice system, getting jobs,

a barrier to the life, liberty, and pursuit of happiness of the black

applying for loans or mortgages, shopping, voting, and receiving

population. Why so low? Because Americans are deeply divided

medical care. Most blacks say blacks are treated less fairly than

by race in their attitudes toward race. Fully 66 percent of blacks

whites in all of these situations. Most non-Hispanic whites do

think discrimination is the main reason for their lower socioeco-

not think blacks are treated less fairly than whites in any of these

nomic status. Among non-Hispanic whites, only 39 percent feel

situations—with two exceptions. The majority of non-Hispanic

that way. But white attitudes changed significantly between 2012

(61 percent) whites think blacks are treated less fairly than

and 2018. Just 30 percent of non-Hispanic whites said discrimi-

non-Hispanic whites in the criminal justice system, and 63 per-

nation was to blame for the lower socioeconomic status of blacks

cent think blacks are treated less fairly than non-Hispanic whites

in 2012, a figure greatly surpassed by the 46 percent who blamed

by the police. Black Lives Matter is making a difference.

AMERICANDEMOGRAPHICS.COM I SUMMER 2019 7

By David Orgel

RETAIL REALITY I t ’s a n e w e r a fo r re t a i l e r s a n d d e m o g r a p h i c s d a t a .

Decades ago the American population was far more uni-

‘Demographics don’t matter,’” wrote Pam Danziger, found-

form, and consumer research tools were less advanced.

er and owner of market research firm Unity Marketing, in a

Demographics played a key role in helping retailers to make

Forbes article about demographics.

decisions and drive strategies. Today, however, retailers are battling to stay relevant in the face of more diverse custom-

Neil Stern, senior partner of retail consulting firm McMillan-

er bases, the growth of e-commerce and the proliferation of

Doolittle, points out how changing times have impacted use

technology-based shopper analytics tools.

of demographics data. “Years ago the world was simpler and easier to analyze with demographics,” he said, “If you were

Some retailers today are downplaying the importance of

35 years old, it probably meant married with children. Now

demographics data, instead emphasizing more customized

there’s more ethnic diversity, more income diversity, and

and personalized approaches, such as those based on a re-

more delayed life stages. Also, now retailers have more infor-

tailer’s own customer loyalty data.

mation at their disposal, from loyalty to geo-targeting data.”

Retailers are also leveraging attitudinal and other research

8

“In this age of Big Data, when every retailer’s cup runneth

methods for deeper dives into consumer behavior. Accord-

over with consumer information, it has become easy to say,

ing to John Gerzema, CEO, The Harris Poll, “One of the major

AMERICANDEMOGRAPHICS I SUMMER 2019

diversity and demographics collide trends we’re seeing is a push away from traditional demo-

tend to attract very different shoppers than traditional super-

graphics—age and other traditional measures—with targets

markets, club stores or dollar stores.”

now being built around attitudes and values.”

And retailers recognize the continued importance of demo-

Demographics Now a Starting Point

graphics in store site selection, said Danziger. “Dollar Gener-

“Retailers, especially new formats, are using demographics

al is a retailer attuned to demographics in terms of selecting

as a starting point, to define a segment,” Stern said. For the

where to put stores. They go for a lower income segment, and

apparel retailer Justice, which gears its brand towards tween

a focus on minority and immigrant communities.”

girls, “demographics is very important for defining their segment,” he said. “For Aldi, it’s generally about a lower income

Observers also point to use of demographics for overall di-

customer. For Whole Foods, it’s higher income/higher educa-

rection in store marketing, merchandising and promotions.

tion. For Costco, it’s higher income/bigger household size.”

As one example, Roerink describes how demographics influence meat merchandising in grocery. “With urban stores

Anne-Marie Roerink, a Principal at 210 Analytics, said retail

seeing above-average trips among millennials, they typically

formats “are oftentimes fine-tuned to demographic differenc-

carry a much greater assortment of organic and value-added

es at the start. Grocery stores such as Whole Foods or Sprouts

items than rural stores,” she said.

AMERICANDEMOGRAPHICS.COM I SUMMER 2019 9

and goals. At a recent industry forum, Marie Horodecki-Aymes, director, Design, and Packaging for the Canadian grocer Metro, cited data on how the population in Toronto is shifting, while noting, “We need to discover new tastes and integrate products [these demographics] want.”

And Millette Granville, Food Lion’s vice president of Talent, Diversity and Inclusion and Organizational Development, pointed to the increasing numbers of Americans Demographics can also help retailers ex-

checking more than one race on the US

pand or otherwise adapt to new customer

Census, and said multiracial consumers

targets. Walmart appears to be keeping

represent the biggest growth in buying

Multiracial

an eye on demographics to extend its

power. “Are we really prepared today to

customer base to include more higher in-

serve a multicultural/multiracial custom-

consumers

come shoppers, said Danziger, “because

er base, and if not, what are we going to do

that’s where the discretionary money is.”

to get ahead of the game?”

represent the

She cited Walmart’s business relationship with makeup artist Bobbi Brown and their

Personalization Gains Momentum

biggest growth

acquisition of menswear ecommerce site

Personalized marketing that goes beyond

Bonobos as examples of how the retailer

market segmentation is an emerging strat-

in buying

is eyeing a more affluent demographic,

egy with some retailers and is often fueled

while also still “being keenly attuned to

by sales/loyalty data and advanced tech-

lower- and middle-class shoppers.”

nologies. The goal is to create the most

“

power

”

10

relevant offers for each shopper. SuperData Helps Underscore Strategies

market chain Kroger Co. has been a major

Retailers are using demographics to not

practitioner for a number of years, through

only define customer segments, but also

a joint venture called dunnhumbyUSA,

to help explain and justify key strategies

which was eventually acquired by Kroger

AMERICANDEMOGRAPHICS I SUMMER 2019

and renamed 84.51° As Neil Stern describes it, “The concept is, ‘you are what you buy.’ They say, ‘I care less about you demographically, but much more based on your purchase behavior.’”

While 1:1 personalization is viewed by many retailers as the ultimate marketing opportunity, “it’s often easier said than done in food retailing,” said Roerink. “It requires a wealth of knowledge of the shopper and high levels of marketing sophistication that many retailers have not yet achieved.”

There’s also a danger that retailers might focus only on their own sales data to the complete exclusion of demographics, a scenario that runs the risk of backfiring, according to some observers. “You can miss the big picture,” said Stern. “Loyalty programs tell a retailer who they have as customers, not necessarily who they might want in the future.”

This message is particularly important for grocery retailers: “Supermarkets in general have a demographics problem,” Stern added. “They have an aging consumer base and aren’t doing a good job targeting the next generation of consumers. So even if they are doing a great job maximizing what they can get out of current customers, which is the main goal of a loyalty program, that doesn’t necessarily get them to their next customers. So they have to look at bigger demographics for that.”

Best Ways to Leverage Demographics What are the most effective ways to use demographics in this changing retail landscape?

For Danziger, demographics can be used to predict the future. She has written extensively about a millennial group called the HENRYs, which is an acronym for High-Earners-NotRich-Yet. “This subset of the largest generation of Americans earns between $100K and $250K —the income cohort that accounts for 40 percent of all household spending. These are the consumers who are on track to become the ultra-wealthy ($250K+) of the future.”

If demographics can help predict the future, which trends should be on the radar of retailers now? Here are some key demographic trends for retailers to watch, according to to a Forbes article by Danziger, based on an interview she conducted with RoxAnna Sway, executive director of Retail Intel: • Fewer people means fewer people buying: The rate of U.S. population growth has reached its lowest level since 1937.

•M ultigenerational households on the rise: One in five Americans lives in a household with more than one adult generation.

•G oing it alone: For the first time in history, there are more single adults than married Americans.

•M ore phones, fewer cars: Less mobile but more connected millennials will mean more online shopping.

• Sheltering in place: People aren’t moving like they used to. Whereas in the 1960s some 20% of Americans were on the move, today only about 10% are expected to move in a year.

Regarding retailers and demographic trends,

“

If demographics can help predict the future, which trends should be on the radar of retailers now?

”

she concludes that “retailers can’t escape them. They must embrace them.

AMERICANDEMOGRAPHICS.COM I SUMMER 2019 11

Is Rural America Growing Again?

One of the most intractable problems of our time is the differential prosperity of urban and rural America. The most obvious example of this is the emptying out of rural America while urban America grows. Since 2010, nonmetropolitan counties (the definition of “rural” in this article) have lost population while metropolitan counties have grown. With the loss of population comes the loss of jobs and opportunity, the opioid epidemic and political upheaval. But has rural population loss come to an end?

Maybe so. In 2017 and 2018, nonmetropolitan counties as a whole gained population after years of decline. In 2017, they gained 18,000 people, according to Census Bureau population estimates.

In 2018, they gained another 38,000. While these increases do not make up for the losses earlier in the decade, they suggest a changing pattern of growth.

Let’s take a more detailed look at population trends in rural areas. We can do this thanks to the USDA’s Rural-Urban Continuum (RUC). Every 10 years, following the decennial census, the USDA assigns an RUC code—a number ranging from 1 to 9—to each of the nation’s 3,000-plus counties. Counties assigned the rank of 1 are the most urban, in metropolitan areas with populations of 1 million or more (think Manhattan). Counties assigned ranks 2 and 3 comprise medium and small metropolitan areas. Counties 4 through 9 are nonmetropolitan (rural), and increasingly remote with rising rank. Counties assigned the rank of 9 are the most remote, not adjacent to a metropolitan county, with population

12

AMERICANDEMOGRAPHICS I SUMMER 2019

centers that are home to fewer than 2,500 people. In other words, nearly empty—the kind of places most metropolitan dwellers drive through and wonder who in their right mind would want to live there.

Between 2010 and 2018, the nation’s metropolitan counties (ranks 1, 2, and 3) grew robustly in every year. Rural counties of rank 4 and 5 also grew in most of those years. These are the most populous rural counties, containing urban centers of 20,000 or more people. Important point: The rural decline was not ubiquitous. It was limited to the most remote and least populated counties—those with rank 6, 7, 8, or 9. These counties lost population in every year between 2010 and 2016. But in 2017 and 2018, something changed. Some of these counties—rank 6 and 8 counties—began to grow again after years of

Between 2010 and 2018, the nation’s metropolitan counties grew robustly in every year.

decline. They made the difference, tipping nonmetro America as a whole into the growth column once again.

Why are rank 6 and 8 counties growing again? They may be sparsely populated, but they have one thing going for them—they are adjacent to metropolitan counties. As the economic recovery gained strength and spread outward, job opportunities have been increasing in these areas. More jobs and, perhaps most important, lower housing costs began to attract movers from other types of counties, reversing a net loss of domestic migrants. Some of the movers to rank 6 and 8 counties are leaving the largest metropolitan areas. Since 2016, the most urban counties (rank 1) have lost more domestic migrants than they have gained.

AMERICANDEMOGRAPHICS.COM I SUMMER 2019 13

Homeownership Rate Is Projected to Rise +1.5 Percentage Points by 2028 ait, is that a typo in the title? Nope. According to

rates for each demographic segment return to their long-term

the Joint Center for Housing Studies of Harvard

average for the 1988-to-2018 time period. Pessimists might

University, the high scenario in its homeowner-

choose the low scenario, which projects a homeownership

ship projections calls for a homeownership rate

rate of 63.0 percent by 2028, a small decline of 1.4 percentage

of 65.9 percent in 2028—just 1.5 percentage points above the

points if rates for each segment fall by the same amount as

2018 rate.

they rise in the high scenario.

But isn’t homeownership on its way back up, increasing by

Results under any of these projections are nothing to write

one full percentage point in the past two years? Yes, true. But

home about, and that’s important to know. Don’t expect too

that doesn’t mean happy days are here again in the housing

much from the housing market in the decade ahead.

market.

Even in the most optimistic projection—the high scenario— While it’s true that the 64.4 percent homeownership rate of

homeownership rates by age will barely budge. The 35-to-39

2018 is higher than the post-Great Recession low of 63.4 per-

age group will continue to be the nation’s first-time homebuy-

cent in 2016, don’t get your hopes up. Homeownership is not

ers (the age group in which the homeownership rate first sur-

going to return to the heady days of 2004, when the rate peak-

passes 50 percent), as it has been since 2011, but its rate rises

ed at 69.0 percent. That was an aberration—a kind of “Tulip

by just +0.5 percentage points. The homeownership rate of

Mania” in the housing market and a speculative bubble fueled

householders aged 30 to 34 will top out at 47 percent—close

by lax lending standards and downright criminal behavior.

to where it is now. The homeownership rates of older house-

That’s not likely to happen again (at least let’s hope not).

holders will remain about the same. The biggest gain will be among householders aged 40 to 44, with their rate rising by

Instead, expect stability—what you see is what you get. Sce-

+2.6 percentage points by 2028. Even with that increase, the

narios projected by the Joint Center for Housing Studies

2028 homeownership rate of 40-to-44-year-olds will still be a

(JCHS) lay out best and worst cases for the housing market,

substantial 6.4 percentage points shy of the record 71.9 per-

contrasted against their “business-as-usual” baseline mea-

cent rate recorded by the age group in 2004.

sure. Let’s start with this JCHS base scenario, which consists

14

of today’s rates by age, race, Hispanic origin, and household

Although homeownership rates are not projected to change

type projected a decade ahead and buffeted only by chang-

much between 2018 and 2028, the number of homeowners

ing demographics. In the base scenario, the homeownership

will rise for two reasons: population growth and the continued

rate “climbs” (“inches” would be a better word) from 64.4 to

aging of the population (older householders are more likely to

64.5 percent by 2028. If you’re feeling really optimistic and bet

be homeowners). The number of homeowners will increase by

on the high scenario, the rate will rise to 65.9 percent, a mod-

6 million in the low scenario, 8 million in the base scenario, and

est gain of +1.5 percentage points assuming homeownership

10 million in the high scenario.

AMERICANDEMOGRAPHICS I SUMMER 2019

of five life achievements: leaving home, finishing school, becoming financially independent, getting married, and having a child. These five achievements are “tantamount to achieving the American Dream.” In the past, many have reached them by age 32, and for post-World War II Americans, it was even younger. But for today’s digital natives, the author questions whether many will reach “adulthood” at all. Or if they even want to.

Albright attributes this “hacking” of the American Dream to technology. Younger people are becoming “untethered” from traditional societal milestones and structures, creating “the greatest generation gap in history.”

Left to Their Own Devices: How Digital Natives Are Reshaping the American Dream, a new book from Dr. Julie Albright, argues that with technology and digital media, the traditional view of the American Dream is being redefined.

The author, a sociologist and lecturer who specializes in digital culture and communications, notes that adulthood —as delineated by the biennial General Social Survey (GSS), a project of the independent research organization NORC at the University of Chicago—consists

The book is chock full of vivid anecdotes showing how digital natives are living today, such as the digital nomads in Silicon Valley’s live/work hacker hotels or the “workation” space Coboat, a catamaran for entrepreneurs.

tricate themselves from the student loan debt they’ve incurred, because they haven’t been able to land that high-paying job that the degree was supposed to help them get. And there is the living-athome crowd—in 2014, for the first-time in 130 years, more people ages 18 to 34 lived with their parents (32%) than lived in their own household with a partner or spouse (31.6%). For those who had escaped the nest, there is Generation Rent —homeownership in 2015 for those 25 to 34 was 37%; it was 45% for boomers at the same age. And today’s renters are paying more—45% of a millennials’ salary went to rent between ages 22 to 30, compared to 36% of a boomers’ salary when they were those ages. The economic situation that millennials have faced in the last 10 years, and will face in the future, is dire.

While technology and digital media are certainly not the only cause of all of this untethering by young people, there’s no question that younger generations are redefining many of those pillars that have long embodied the American Dream. And this has profound effects for marketers—with people less tied to institutions such as religion, politics, marriage, longstanding definitions of the workplace, where and with whom they live, and most of all, how they interact with each other. With all these changes, marketers need to rethink the best ways to speak to the “untethered” generation.

The Theft of a Decade: How the Baby Boomers Stole the Millennials’ Economic Future, by Wall Street Journal columnist Joseph Sternberg, blames millennials’ parents for their financial situation. The author argues that boomers engineered economic policy and regulation to save themselves from the Great Recession at the expense of their millennial children.

Millennials have suffered in a number of ways since the Great Recession. There are the students who are unable to ex-

But the author is hopeful that millennials can still find ways to emerge from it, just as previous generations have. Sternberg says that millennials have been dealt a worse financial hand than practically any other generation except those who grew up in the Great Depression. And that generation finally saw its economic wellbeing jumpstarted in the 1950s and 1960s . The question, Sternberg asks, is: “Where is the boom for millennials going to come from?”

AMERICANDEMOGRAPHICS.COM I SUMMER 2019 15

COMING IN THE NEXT ISSUE OF

AMERICAN DEMOGRAPHICS Is Retirement Obsolete?

The Baby Bust May Be Permanent The Cost of Prescription Drugs: The Lull in the Storm Checking Up on America’s Economic Well-Being

Coastal Resiliency: Living with the Threat of Surging Waters

Let American Demographics be your umbrella against the uncertainties of tomorrow’s raindrops.

Visit www.americandemographics.com and subscribe.