Are boomerang kids the “new normal” now?

I’ve blogged before about how the Great Recession and resulting high unemployment rates drove a significant number of young adults back into their childhood homes — or relying on Mom and Dad for financial support at least. It affected millions of young adults.

The economy and job prospects have been steadily improving since those dark days – even if the improvement hasn’t been as rapid as people would like to see …

But here’s an interesting finding: Those new jobs and the improving economy haven’t resulted in the kids moving back out of the house.

In fact, two studies conducted by the Pew Research Center in 2016 have determined that “living with parents” is now the single most common living arrangement for America’s 18-34 year olds.

That is correct: Instead of living with a spouse, a partner, a roommate or on his or her own, the largest single segment of millennials lives full-time with parents.  The phenomenon is most prevalent in Connecticut, New Jersey and New York, where it’s no coincidence that the cost of living is much higher than the national average.

For marketers, this means that the once-coveted 18-34 year-old cohort is today made up of many people who are consuming other people’s resources (e.g., the resources of their parents) rather than making all of their own purchase decisions and spending their own money.

Furthermore, Pew Research has determined that living with parents isn’t merely about employment (or the lack thereof). Over the past eight years, adults age 18-34 have continued to move back home in greater numbers — even as more of them have been able to find jobs.

The Pew findings suggest yet another surprising trend that appears to be in the making – that this is the first American generation where a large portion of the people won’t ever purchase a home.

It’s easy to figure that trends of this kind are transitory. But Pew cautions that the trends may well be more fundamental than the implications of an economic recession.  Instead, there are broader cultural dynamics at play – as well as the long-term challenges of economic independence for this generation of people.

The implications for marketers are intriguing, too.  For some, it will mean placing more emphasis on marketing initiatives aimed at parents, who are the now ones making purchase decisions within a larger multi-generational household — often one that stretches over three generations rather than just two.

And consider these dynamics as well: How do young adults and their parents work through multi-generational purchase decisions?  What are the most effective ways to target and reach multiple generations living under one roof who are making coordinated purchase decisions?  Maybe the old ideas of targeting each audience separately no longer make as much sense as before.

One thing’s for sure – it’s risky for marketers to wait for a return to normal … because that “normal” likely isn’t coming back.  Better to come up with new tactics and new messaging to reach and influence buyers in the new multi-generational environment.

Where’s the Best Place to Live without a Car?

For Americans who live in the suburbs, exurbs or rural areas, being able to live without a car seems like a pipedream. But elsewhere, there are situations where it may actually make some sense.

They may be vastly different in nearly every other way, but small towns and large cities share one trait – being the places where it’s more possible to live without a car.

Of course, within the larger group of small towns and larger cities there can be big differences in relative car-free attractiveness depending on differing factors.

For instance, the small county seat where I live can be walked from one side of town to the other in under 15 minutes. This means that, even if there are places where a sidewalk would be nice to have, it’s theoretically possible to take care of grocery shopping and trips to the pharmacy or the cleaners or the hardware store on foot.

Visiting restaurants, schools, the post office and other government offices is also quite easy as well.

But even slightly bigger towns pose challenges because of distances that are much greater – and there’s usually little in the way of public transport to serve inhabitants who don’t possess cars.

At the other end of the scale, large cities are typically places where it’s possible to move around without the benefit of a car – but some urban areas are more “hospitable” than others based on factors ranging from the strength of the public transit system and neighborhood safety to the climate.

Recently, real estate brokerage firm Redfin took a look at large U.S. cities (those with over 300,000 population) to come up with its listing of the 10 cities it judged the most amenable for living without a car. Redfin compiled rankings to determine which cities have the better composite “walk scores,” “transit scores” and “bike scores.”

Here’s how the Redfin Top 10 list shakes out. Topping the list is San Francisco:

  • #1: San Francisco
  • #2: New York
  • #3: Boston
  • #4: Washington, DC
  • #5: Philadelphia
  • #6: Chicago
  • #7: Minneapolis
  • #8: Miami
  • #9: Seattle
  • #10: Oakland, CA

Even within the Top 10 there are differences, of course. This chart shows how these cities do relatively better (or worse) in the three categories scored:

Redfin has also analyzed trends in residential construction in urban areas, finding that including parking spaces within residential properties is something that’s beginning to diminish – thereby making the choice of opting out of automobile ownership a more important consideration than in the past.

What about your own experience? Do you know of a particular city or town that’s particularly good in accommodating residents who don’t own cars?  Or just the opposite?  Please share your observations with other readers.

The Top Ten U.S. Cities for Stretching a Dollar

… They’re pretty nice in other ways, too.

Wausau, Wisconsin
Wausau, Wisconsin

A few months ago, my eldest daughter received her graduate degree in higher education academic counseling, and immediately thereafter started a new career position at a university located in a medium-sized city in the state of Wisconsin.

Of course, the main attraction was the job position itself and the potential it offers for professional growth.

But another important factor was the cost-of-living dynamics in an urban area where real estate and other costs are clearly more “friendly” to a career person just starting out.

Along those lines, the recent publication of CareerCast.com‘s newest “Ten Best Cities for Return on Salary” is revealing.

What it shows is that for young professionals just beginning in their careers – and likely saddled with student loans that are a significant chunk of change – the top cities for “stretching a dollar” aren’t particularly known for being the hippest places around.

By the same token, they aren’t the dregs, either.

Here’s CareerCast’s “Top 10” listing in order of the most budget-friendly cities:

  • #1 most budget-friendly: Wausau, WI
  • #2: Tucson, AZ
  • #3: Pittsburgh, PA
  • #4: Midland, TX
  • #5: Lincoln, NE
  • #6: Houston, TX
  • #7: Fort Worth, TX
  • #8: Durham, NC
  • #9: Columbus, OH
  • #10: Austin, TX

Scanning the roster, you might see a few surprises.

One shows up as #10 on the list; certainly no one is going to accuse Austin of being anything less than trendy.  Houston and Fort Worth (#6 and #7 on the list) are major metropolises.

Affordable, livable housing in Pittsburgh, Pennsylvania
Affordable, livable housing in Pittsburgh, Pennsylvania

And more people are falling in love with the charms of Pittsburgh, PA (#3 on the list) – especially when compared to its old, worn-out and unsafe urban counterpart on the other side of the state.

The Midwestern cities on the list might not be the end-all in trendiness, but one can’t complain about quality-of-life factors like friendly neighborhoods and lower crime rates in places like Lincoln, Columbus and Wausau.

And if nothing else, Midland is the city that played host to President George W. Bush in his formative years …

Overall, I think it can be said that these ten cities aren’t a bad set of choices for young working professionals. The fact that they also happen to be the best ones for stretching a dollar is just icing on the cake.

Cutting Some Slack: The “College Bubble” Explained

huThere are several “inconvenient truths” contained among the details of a recently released synopsis of college education and work trends, courtesy of the Heritage Foundation. Let’s check them off one-by-one.

The Cost of College

This truth is likely known to nearly everyone  who has children: education at four-year educational institutions isn’t cheap.  Here are the average annual prices for higher education in the United States for the current school year (includes tuition, fees, housing and meals):

  • 4-year public universities (in-state students): ~$19,550
  • 4-year public universities (out-of-state students): ~$34,000
  • 4-year private colleges and universities: ~$43,900

These costs have been rising fairly steadily for years now, seemingly without regard to the overall economic climate. But the negative impact on students has been muted somewhat by the copious availability of student loans — at least in the short term until the schedule kicks in.

The other important mitigating factor is the increased availability of community college education covering the first two years of higher education at a fraction of the cost of four-year institutions.  Less attractive are “for-profit” institutions, some of which have come under intense scrutiny and negative publicity concerning the effectiveness of their programs and how well students do with the degrees they earn from them.

Time Devoted to Education Activities

What may be less understood is the degree to which “full-time college” is actually a part-time endeavor for many students.

According to data compiled by the Bureau of Labor Statistics over the past decade, the average full-time college student spends fewer than three hours per day on all education-related activities (just over one hour in class and a little over 1.5 hours devoted to homework and research).

It adds up to around 19 hours per week in total.

In essence, full-time college students are devoting 10 fewer hours per week on educational-related activities compared to what full-time high school students are doing.

Lest this discrepancy seem too shocking, this is this mitigating aspect:  When comparing high-schoolers and full-time college students, the difference between educationally oriented time spent is counterbalanced by the time spent working.

More to the point, for full-time college students, employment takes up ~16 hours per week whereas with full-time high school students, the average time working is only about 4 hours.

Full-Time Students vs. Full-Time Workers

Here’s where things get quite interesting and where the whole idea of the “college bubble” comes into broad relief. It turns out that full-time college students spend far less combined time on education and work compared to their counterparts who are full-time workers.

Here are the BLS stats:  Full-time employees work an average of 42 hours per week, whereas for full-time college students, the combined time spent on education and working adds up to fewer than 35 hours per week.

This graph from the Heritage Foundation report illustrates what’s happening:

CT

Interestingly, the graph insinuates that full-time college students have it easier than many others in society:

  • On average, 19-year-olds are spending significantly fewer hours in the week on education and work compared to 17-year-olds.
  • It isn’t until age 59+ that people are spending less time on education and work than the typical 19-year-old.

No doubt, some social scientists will take these data as the jumping off spot for a debate about whether a generation of “softies” is being created – people who will struggle in the rigors of the real world once they’re out of the college bubble.

Exacerbating the problem in the eyes of some, student loan default rates aren’t exactly low, and talk by some politicians about forgiving student loan debt is a bit of a lightning rod as well.  The Heritage Foundation goes so far as to claim that loan forgiveness programs are leaving taxpayers on the hook for “generous leisure hours,” since ~93% of all student loans are originated and managed by the federal government.

What do you think? The BLS stats don’t lie … but are the Heritage Foundation’s conclusions off-target?  Please share your thoughts with other readers here.

Are U.S. warehouse jobs destined to go the way of manufacturing employment?

Even as manufacturing jobs have plateaued or fallen in certain communities, one of the employment bright spots has been the rise of distribution centers and super warehouses constructed by Amazon and other mega retailers to accommodate the steady rise of online shopping.

In my own region, the opening of Amazon distribution centers in Maryland and Delaware were met with accolades by local business development officials, who figured that new employment opportunities for entry level workers would soon follow.

And they have … to a degree. But what many people might not have expected was the rapid rise of robotics usage in warehouse operations.

In just the past few years, Amazon has quietly gone about purchasing and introducing more than 30,000 Kiva robots for many of its warehouses, where the equipment has reduced operating expenses by approximately 20%, according to Dave Clark, Amazon’s senior vice president of worldwide operations and customer service.

An analysis by Deutsche Bank estimates that adding robots to a new Amazon warehouse saves approximately $22 million in fulfillment expenses, which is why Amazon is moving ahead with plans to introduce robots in the remaining 100 or so of its distribution centers that are still without them.

Once in place, it’s estimated that Amazon will save an additional $2.5 billion in operating expenses at these 100 facilities.

Of course, robots aren’t exactly inexpensive pieces of equipment. But with the operational savings involved, it’s clear that adding this kind of automation to warehousing is kind of a slam-dunk decision.

Which helps explain another move that Amazon made in 2012. It decided to purchase the company that makes Kiva robots — for a cool $775 million.  And then it did something else equally noteworthy:  it ceased the sale of Kiva robots to anyone outside the Amazon family.

Because Kiva was pretty much the only game in town when it came to robotics designed for warehouse pick-and-ship functions, Amazon’s move put all other warehouse operations at a serious disadvantage.

That in turn created a stampede to develop alternative sources of supply for robots. It’s taken about four years, but today there are credible alternatives to Kiva brand robots now entering the market.  Amazon’s uneven playing field is getting ready to become a lot more level now.

But the other result of this “robotics arms race” is the sudden plenteous availability of new robot equipment, which companies like Macy’s, Target and Wal-Mart are set to exploit.

The people who are slated to be the odd people out are … warehouse workers.

The impact could well be dramatic. According to the Bureau of Labor Statistics, there are nearly 860,000 warehouse workers in the United States today, and they earn an average wage of approximately $12 per hour.

Not only is the rise of robot usage threatening these jobs, thanks to the sharp increase of minimum wage rates in areas near to some major urban centers is putting the squeeze on hiring from a wholly different direction. It’s a perfect storm the seems destined to blow a hole in warehouse employment levels in the coming years.

Thinking back to what happened to manufacturing jobs in this country, it’s seems we’ve seen this movie before …

What’s behind Microsoft’s $26 billion purchase of LinkedIn?

LI MCAt first blush, it appears almost ludicrous that Microsoft Corporation is offering an eye-popping $26 billion+ to acquire LinkedIn Corporation.

The dollar figure far eclipses any previous Microsoft acquisition — including the $9 billion+ it paid for Nokia Corporation in 2014, not to mention what the company paid for Yammer and Skype.

What’s also acknowledged is that none of those earlier acquisitions did all that much to further Microsoft’s digital and social credentials — and in the case of Nokia, the financial write-downs Microsoft has recorded have actually exceeded Nokia’s purchase price.

So what’s different about LinkedIn — and why does Microsoft feel that the synergies will work to its advantage better this time?

In a recent Wall Street Journal column, technology journalist Christopher Mims noted that such synergies do exist — and in a much bigger way.

That includes Microsoft Office, the productivity suite that’s now delivered almost exclusively online. And then there’s LinkedIn’s database of over 400 million subscriber professionals.

Put those two elements together with a strong strategic vision, and you have the potential for some pretty amazing synergies.

When you think about it, LinkedIn’s users are essentially Microsoft’s core demographic. And it isn’t something that’s replicated anywhere else in Cyberspace.  Here’s Microsoft’s CEO Satya Nadella talking:  “It’s really the coming together of the professional cloud and the professional network.”

Acting on its own, LinkedIn hasn’t been all that successful in leveraging what is arguably the most comprehensive and powerful database of business professionals ever compiled in the history of mankind.

While it consists of self-contributed information that hasn’t been “vetted” by outside parties, it’s still the single most comprehensive and valuable repository of information about business professionals — anywhere in the world.

I view the dynamics of LinkedIn as something like the Wikipedia. Wikipedia has become so pervasive, it has driven traditional encyclopedias from the scene.  And while we all know that there can be misstatements of fact — or omissions of facts — from Wikipedia entries, it’s also become the quickest and easiest place to go for information that’s “accurate enough and complete enough” for most any type of informational query.

In similar fashion, LinkedIn is making personnel databases like Dun & Bradstreet that are less robust and accessible only by subscription increasingly obsolete.

And yet … with all of this powerful data at its fingertips, up to now LinkedIn hasn’t been all that effective in leveraging its vast trove of data in way that goes much beyond using it as a personnel recruitment tool.

Try as LinkedIn might to create “stickiness” by offering communities of users based on job function, shared industry involvement and the like, to this day only about one-fourth of LinkedIn’s ~400 million users come to the site on a monthly basis.

The reality is that the vast majority of people continue to access LinkedIn only when they’re in the job market — either as a seeker of talent or seeking a new position for themselves.

In the wake of the pending Microsoft acquisition, those dynamics could change quickly — and in a big way.

One way is in how LinkedIn could begin to provide a big boost to Microsoft’s CRM services. Many companies use such products to identify and track sales leads; in fact, having such a tool is almost a prerequisite for any successful business of any size at all.

As of today, Microsoft languishes behind three other CRM software providers (Salesforce.com, SAP and Oracle). LinkedIn’s own product (LinkedIn Sales Navigator) is essentially an also-ran in the category.

But bringing together LinkedIn’s extensive personnel database with Microsoft’s CRM capabilities looks to deliver data and reach that would be the envy of anyone in the market.

So … it is certainly possible to understand why Microsoft might see LinkedIn as its strategic “ticket to ride” in the coming decades. But two questions remain:

  • Does the acquisition business potential match with the $26 billion+ Microsoft is paying for the buying LinkedIn?
  •  Will Microsoft do a better job of integrating LinkedIn with its other products and services when compared to the disappointing results resulting from its other acquisitions?

We’ll need to check back over the coming months to see how things are come together.

Are France’s New “Right to Disconnect” Regulations Based on a Big “Disconnect” as well?

mcThe country of France has just enacted labor reform legislation that prohibits the use of work e-mails after-hours.

That is correct: For companies with 50+ employees operating in France, the entities must now define a set of hours when employees are not allowed to send any e-mails.

The legislation, which is part of an omnibus law titled “The Adaptation of Work Rights to the Digital Era,” also stipulates that employees are barred from interacting with work e-mail communications on holidays and on weekends.

To me, this seems like an issue worthy of consideration that’s been taken to an extreme – using a heavy-handed blunt force object when perhaps a scalpel is what’s really required.

Let’s first acknowledge that the French legislation is borne out of real concerns. Few in the business world would argue that the pervasiveness of work-related e-mails has a big downside as it’s crept steadily into every aspect of life.

Stress, fatigue, burnout.  Call it what you will — there’s little doubt that for many people, life in the 24/7 business lane has become distinctly unappealing.

The American Psychological Association cites a litany of problems that go beyond just stress and fatigue, too. It counts high blood pressure, depression, and even elevated cholesterol levels as among the collateral damage of the “always on” business culture.

People’s online behaviors aren’t helping matters, either. Consumer research routinely shows that ~80% of smartphone users check their devices within 15 minutes of waking up.  A similar percentage keep their devices with them at least 22 hours a day or longer.

Clearly, we’re doing it to ourselves as much as any dictates coming from “The Man.”

But like so much else in the realm of social engineering, these new French regulations seem set to result in all sort of unintended consequences.

What about global companies that engage with personnel across a myriad of time zones?  Are those organizations supposed to shut down mission-critical functions when France is “off limits” – jeopardizing the timely transaction of their business activities?

More likely, it will be their French business operations that shut down, rather than the rest of the world sucking it up and catering to the French regulations.

As one MediaPost reader commented after reading about the new law:

“Maybe the Dumbest. Law. Ever. Yet.

If you’re in France working, but your customer is in the U.S., how in the world are you supposed to communicate?  Stay up late and have a phone call with them instead?  Talk about turning people into criminals for no reason.”

Which bring up another point. From Prohibition then to zoning provisions today, “dumb” laws just encourage people to break them.

I can’t see this legislation being a long-term success – but you might disagree. Please share your perspectives with other readers here.