We’re number one! Wait a minute, we’re not?
Throughout our entire lifetimes, and those of our parents and grandparents, the economy of the United States has been far and away the largest in the world. According to a flurry of news stories earlier this year, that situation may have changed.
Depending upon which economic factors you measure, whose figures you use, and how you account for currency exchange rates and various other issues, the economy of China could now be considered larger than that of the U.S. Even if it is not, it will be in the not-too-distant future.
The U.S. took the lead around 1880, but can you guess what nation held the distinction prior to that? My guess would have been Great Britain, but I would have been wrong. Actually it was China.
Of course there are other ways to measure an economy, one of them being its output per person. In that respect we are way ahead of China but only rank 10th in the world, well behind leaders Luxembourg, Norway and Qatar.
Then there is the matter of quantity versus quality. Is it really important to have the largest economy in the world, or to have the best? We can make a pretty strong argument in that respect by pointing out the fruits of our economic system, including our colleges and universities, achievements in the arts and sciences, technological innovation and business excellence. People around the world don’t dream about moving to China.
Okay, so I talked myself down off the ledge and decided that my self-esteem
could survive our displacement at the top of the world’s economies, but then last week I learned something that shook me up all over again. I was watching a program on one of the cable news channels when I happened to notice some information scrolling by in the “crawl” which they run across the bottom of the screen.
Those crawls are really annoying, by the way, but it’s hard to ignore them. There is always the possibility that while the “on-air personalities” are busy talking about Donald Trump’s presidential campaign, or why men like to watch sports more than women do, the crawl will say that there is an asteroid heading toward Earth that will destroy life as we know it.
Anyway, on this particular day the crawl delivered the devastating news that baby boomers were no longer the largest segment of the American population. It said that there were now approximately 75 million boomers, born from 1946 to 1964, and 80 million “Millennials,” born from 1982 to 2000.
I was born near the peak of the baby boom, so all my life there have been more people around my age in America than any other age group. That meant that products and services were always being designed with us in mind, and if we liked something you could bet there was going to be a lot of it.
So TV shows were designed for us, and movies and cars and music and clothes and electronic gadgets and sporting goods and everything else. We were catered to by the World War II generation, the so-called Silent Generation (born 1928-1945), and finally by our own.
Anybody who could anticipate our needs and wants could get rich.
I’ve been speaking of us in the past tense, which is a tad premature. Although we now account for less than a quarter of the population, we do 40 percent of consumer spending and own a whopping 70 percent of total household net worth.
Nonetheless, marketers are paying less attention to us these days, partly because older people are more set in their ways. We still buy a lot of soap, but it’s the same brand of soap we’ve been buying for decades. The big exception is pharmaceuticals, because when it comes to arthritis, high blood pressure, incontinence and erectile dysfunction, our generation is where the action is.
Ultimately, though, our fondness for prescription drugs won’t save us, and the grim reaper is already taking a heavy toll. The Millennial generation, on the other hand, is still growing, because the majority of immigrants to this country falls into it. As boomers finally retire from the workforce by the millions, all these Millennials will be moving up the ladder.
So who are these people, and how will they affect our businesses? Last fall, the President’s Council of Economic Advisers issued a 45-page report entitled “15 Economic Facts About Millennials” which attempted to answer those questions. I won’t go through the whole lot, because some of it seemed self-serving on the part of the administration and some points a bit trivial (I don’t really care how much Millennials argue with their parents), but I’ll hit the highlights.
They are a much more diverse generation than my own, partly because of that immigration factor. While about 80 percent of boomers identify as non-Hispanic white, the percentage of Millennials in that category is only 58.
Modern technology such as the Internet and mobile devices is not something they needed to be taught to use, because they were immersed in it from childhood. As a result, three quarters of them communicate via social networks, compared to half of GenXers (born 1965 to 1981) and one-third of boomers.
They are very close to their parents, both physically and emotionally, probably because their parents spent about twice as much time with them as mine did. Half of them say that it is important to them to live close to their extended family, versus 29 percent of Baby Boomers, and their own children get an enormous amount of attention.
Millennials are by far the most educated generation in history, with about half holding some sort of college degree. That is partly the result of the influence (and financial support) of their super-attentive parents, and partly due to the timing of the “Great Recession.” A very difficult economy has made higher education both a necessity and a refuge.
Like the children of the Depression, Millennials have learned the value of a good job, and once they find it they are likely to stick with it. They are also committed to their communities, which tend to be more urban that those of their grandparents.
There’s another big difference between this age group and my own, one that is not mentioned by the President’s economic council but may be the most significant. They have grown up under the shadow of terrorism, which is a far different existential threat than the mushroom cloud that darkened our imaginations a half-century ago.
I don’t know who is number one, but I know that we are very different people.
by Kevin Fahy
E-mail Kevin at kfahy@fwpi.com
