The disappearing American middle class? The Pew Research Center weighs in.

mcIn this political season in the United States — when is it ever not, one wonders? — we hear many of the presidential candidates refer to the so-called “crisis” of the middle class.

It matters not the political party nor ideological stripe of the candidate, we hear copious references to “the disappearing middle class” … the “middle class squeeze” … and that the middle class is “just getting by.”

Considering that the middle class income group represent the single largest block of voters in the country, it isn’t at all surprising that the presidential contenders would talk about middle class issues — and to middle class voters — so frequently.

The question is … is the hand-wringing warranted?

PewWell, if one believes a new Pew Research study on the subject, it may well be the case.

Based on its most recent analysis of government data going back nearly 50 years, Pew reports that there are now fewer Americans in the “middle” of the economic spectrum than at the lower and upper ends.

This is a major development, and it is new.

Pew defines a middle class household as one with annual income ranging from ~$42,000 to ~$126,000 during 2014. Using that definition, Pew calculates that there are now 120.8 million adults living in middle class households, but 121.3 million who are living in either upper- or lower-income households.

Pew characterizes this new set of figures as a kind of tipping point. And it helps to underscore the narrative wherein certain presidential candidates — you-all know which ones — are tapping into a collective “angst” about the decline in middle-income families, and the notion that they are falling behind compared to upper-income adults while unable to access many of the support services available to lower-income households.

Looking at things in a bit more depth, however, one can find explanations — as well as other data points that go against the “narrative” to some degree. Consider the following:

  • Senior citizens have done quite well shifting into the upper category since the 1970s — their share increasing by well over 25% in the upper-income bracket.
  • African-Americans have experienced the largest increase in income status over the same period, meaning that their lower-income category share is lower today.
  • The rapid rise in the number of immigrants in the late 20th century has pushed down median incomes because those new arrivals, on average, make less in income.

I suspect the Pew study findings will be fodder for more discussion — and perhaps some additional sloganeering — in the upcoming weeks and months. But you can judge for yourself whether that’s warranted by reviewing more findings from Pew’s report here.

If you have your own perspectives about what’s happening with (or to) the middle class, I’m sure other readers would be quite interested in hearing them.  Please share your comments here.

“Immigration Nation”: Pew Research Projects U.S. Population Demographics into the Future

immigrantsI’ve blogged before about the immigration issue and its potential impact on the U.S. economy and society.

Now the Pew Research Center has released a report that predicts the U.S. becoming a “no ethnic majority” nation within the next 35 years.

When one considers that the United States population was nearly 85% white Anglo in 1965 … and that percentage has dropped to about 62% now, it isn’t that hard to imagine Pew’s prediction coming true.

Here’s the trajectory Pew predicts over the coming ten-year periods:

  • 2015: ~62% estimated U.S. white Anglo population percentage
  • 2025: ~58% projected white Anglo population percentage
  • 2035: ~56% projected
  • 2045: ~51% projected
  • 2055: ~48% projected
  • 2065: ~46% projected

Perhaps what’s more intriguing is that Pew projects the largest future percentage gains will be among Asian-Americans rather than Latino or Black Americans. The Asian share of the American population is expected to double over the period:

  • 2015: ~6% estimated U.S. Asian population percentage
  • 2025: ~7% projected Asian population percentage
  • 2035: ~9% projected
  • 2045: ~10% projected
  • 2055: ~12% projected
  • 2065: ~14% projected

If these projections turn out to be accurate, the Asian population percentage is on tap to become the nation’s third highest group.

By contrast, the Hispanic population, while continuing to grow, looks as if it will level off at about 22% of the country’s population by 2045. For Black Americans, Pew projects the same dynamics at work, but at the 13% level.

citizenship ceremonyAccording to Pew’s analysis, the biggest driving force for the projected Asian population growth is immigration. By 2055, Pew expects that Asians will supplant Latinos as the largest single source of immigrants — and by 2065 the difference is expected to be substantial (38% Asian vs. 31% Latino immigrants).

Conducted in parallel with Pew’s projection analysis was an online opinion research survey of American adults (18 and over) it conducted in March and April of this year.

Among the attitudinal findings Pew uncovered were these:

  • “Immigrants in the U.S. are making society better”: ~45% of respondents agree … ~37% disagree
  • “I would like to see a reduction in immigration”: ~50% agree
  • “I would like to see the immigration system changed or completely revamped”: ~80% agree

Again, no great surprises in these figures — although if one paid attention only to news accounts in the “popular media,” one might find it surprising to learn that a plurality of Americans actually consider immigration a net positive for American society …

Additional findings from the Pew survey as well as its demographic projections can be found here.

Social media data mining: Garbage-in, garbage-out?

gigoIt’s human nature for people to strive for the most flattering public persona … while confining the “true reality” only to those who have the opportunity (or misfortune) to see them in their most private moments.

It goes far beyond just the closed doors of a family’s household. I know a recording producer who speaks about having to “wipe the bottoms” of music stars — an unpleasant thought if ever there was one.

In today’s world of interactivity and social platforms, things are amplified even more — and it’s a lot more public.

Accordingly, there are more granular data than ever about people, their interests and their proclivities.

The opportunities for marketers seem almost endless. At last we’re able to go beyond basic demographics and other conventional classifications, to now pinpoint and target marketing messages based on psychographics.

And to do so using the very terms and phrases people are using in their own social interactions.

The problem is … a good deal of social media is one giant head-fake.

Don’t just take my word for it. Consider remarks made recently by Rudi Anggono, one of Google’s senior creative staff leaders. He refers to data collected in the social media space as “a two-faced, insincere, duplicitous, lying sack of sh*t.”

Anggono is talking about information he dubs “declared data.” It isn’t information that’s factual and vetted, but rather data that’s influenced by people’s moods, insecurities, social agenda … and any other set of factors that shape someone’s carefully crafted public image.

In other words, it’s information that’s made up of half-truths.

This is nothing new, actually. It’s been going on forever.  Cultural anthropologist Genevieve Bell put her finger on it years ago when she observed that people lie because they want to tell better stories and to project better versions of themselves.

What’s changed in the past decade is social media, of course.  What better way to “tell better stories and project better versions of ourselves” than through social media platforms?

Instead of the once-a-year Holiday Letter of yore, any of us can now provide an endless parade of breathless superlatives about our great, wonderful lives and the equally fabulous experiences of our families, children, parents, A-list friends, and whoever else we wish to associate with our excellent selves.

Between Facebook, Instagram, Pinterest and even LinkedIn, reams of granular data are being collected on individuals — data which these platforms then seek to monetize by selling access to advertisers.

In theory, it’s a whole lot better-targeted than the frumpy, old fashioned demographic selects like location, age, income level and ethnicity.

But in reality, the information extracted from social is suspect data.

This has set up a big debate between Google — which promotes its search engine marketing and advertising programs based on the “intent” of people searching for information online — and Facebook and others who are promoting their robust repositories of psychographic and attitudinal data.

There are clear signs that some of the social platforms recognize the drawbacks of the ad programs they’re promoting — to the extent that they’re now trying to convince advertisers that they deserve consideration for search advertising dollars, not just social.

In an article published this week in The Wall Street Journal’s CMO Today blog, Tim Kendall, Pinterest’s head of monetization, contends that far from being merely a place where people connect with friends and family, Pinterest is more like a “catalogue of ideas,” where people “go through the catalogue and do searches.”

Pinterest has every monetary reason to present itself in this manner, of course.  According to eMarketer, in 2014 search advertising accounted for more than 45% of all digital ad spending — far more than ad spending on social media.

This year, the projections are for more than $26 billion to be spent on U.S. search ads, compared to only about $10 billion in the social sphere.

The sweet spot, of course, is being able to use declared data in concert with intent and behavior. And that’s why there’s so much effort and energy going into developing improved algorithms for generating data-driven predictive information than can accomplish those twin goals.

Rudi Anggono
Rudi Anggono

In the meantime, Anggono’s admonition about data mined from social media is worth repeating:

“You have to prod, extrapolate, look for the intent, play good-cop/bad-cop, get the full story, get the context, get the real insights. Use all the available analytical tools at your disposal. Or if not, get access to those tools. Only then can you trust this data.”

What are your thoughts? Do you agree with Anggono’s position? Please share your perspectives with other readers here.

TV’s Disappearing Act

Television viewing among 18- to 24-year-olds reaches its lowest level yet. 

TV watchingThe latest figures from Nielsen are quite telling:  The decline in TV watching by younger viewers is continuing – and it’s doing so at an accelerating pace.

Looking at year-over-year numbers and taking an average of the four quarters in each year since 2011, we see that the average number of hours younger viewers (age 18-24) spend watching television has been slipping quite dramatically:

  • 2011: ~24.8 hours spent watching TV weekly
  • 2012: ~22.9 hours
  • 2013: ~22.0 hours
  • 2014: ~19.0 hours

It’s nearly a 25% decline over just four years.  More significantly, the most recent yearly decline has been at a much faster clip than Nielsen has recorded before:

  • 2011-12 change: -7.7%
  • 2012-13 change: -3.9%
  • 2013-14 change: -13.6% 

So far this year, the trend doesn’t appear to be changing.  1st quarter figures from Nielsen peg weekly TV viewing by younger viewers at approximately 18 hours.  If this level of decline continues for the balance of the year, watching TV among younger viewers will be off by an even bigger margin than last year.

There’s no question that the “great disappearing television audience” is due mainly because of the younger generation of viewers.  By contrast, people over the age of 50 surveyed by Nielsen watch an average of 47.2 hours of television per week — nearly three times higher.

picLest you think that the time saved by younger viewers is going into outdoor activities or other recreational pursuits and interests, that’s certainly not the case.  They’re spending as much time using digital devices (smartphones, tablets and/or PCs) as they are watching TV.

So, it’s a classic case of shifting within the category (media consumption), rather than moving out of it.

I don’t think very many people are surprised.

Gallup’s Payroll-to-Population Rates Pinpoint the Go-Go Metro Areas

Commuters in New York City.
Commuters in New York City.

The Gallup polling organization’s P2P measurements (payroll-to-population employment rates) are an interesting metric and add an extra dimension of understanding as to what’s happening with employment across the United States.

Gallup’s evaluation is limited to the top 50 most populous SMSAs (metropolitan statistical areas).  But because of the large number of phone interviews conducted within each metro area (ranging from ~1,300 to 18000+ depending on the population), the findings are statistically significant whether looking nationally or within a particular urban area.

The latest surveys, conducted by Gallup in 2014 among nearly 355,000 households, find that two metro areas with the highest P2P measures are Washington, DC and Salt Lake City, UT — urban centers that couldn’t be more dissimilar in other ways.

For DC, the P2P rate is 54.1.  The calculation is derived from the percentage of the adult population (age 18+) who are employed full-time for an employer for at least 30 hours per week.

For Salt Lake City, the P2P rate is just slightly lower, at 52.9.

Other top scoring metro areas include three markets in Texas (Austin, Dallas-Ft. Worth and Houston).

What about metro areas at the other end of the scale?  Those would be Miami (38.2 score) and Tampa (39.3).

Three other low-scoring MSAs are located in California:  Los Angeles, Riverside and Sacramento.

What do these stats mean in a broader sense?

For one thing, there’s a direct relationship between employment stats and P2P performance:  Metro areas with the highest unemployment rates correlate to those with low P2P scores.

For instance, Miami’s unemployment rate in 2014 was 10.3%.  It was 10.2% in Riverside, CA.

That’s a big contrast with Salt Lake City, which had an unemployment rate of just 3.5%.

I find one interesting deviation from the norm:  Buffalo, NY.  There, while the unemployment rate is one of the ten lowest in the country, its labor force participation rate is also very low — bottoms among all 50 metro areas, in fact.

Shown below are the figures for all of the 50 largest U.S. metro areas based on the interviews conducted by Gallup in 2014:

Gallup full results

More details on the research findings are available here.

Gallup Confirms It: Kids are Costly

childAnyone who has children – present company included – knows intuitively that raising them isn’t an inexpensive proposition.

The education expenses alone are enough to make some people blanch white at the prospects of child-rearing.

And now we have even more proof of the high cost of having kids. The Gallup organization has just completed a telephone survey of a large sample of American adults age 18 and over – more than 172,000 of them, in fact.

When Gallup asked these respondents how much they spent on purchases “yesterday” (excluding normal household bills and major purchases), it discovered that those without kids under age 18 reported average daily spending of ~$80.

For those with children under the age of 18? They spent ~$110 on average.

So it’s a pretty significant difference of 35%+ more.

Gallup found similar dynamics at work even when comparing adults within the same income groups.

In every income segment, average daily spending levels were lower for adults with no children … spiked for those with kids under 18 … and then dropped back again when children are over the age of 18.

The reasons for the added spending aren’t difficult to figure out, of course. In addition to basic necessities like food and clothing, there are entire categories of spending that come into play for families raising children: extracurricular activities, athletics and sports, entertainment, toys and so forth.

Gallup also discovered similar “bell curve dynamics“ at work when comparing adults within the same age groups. Whether you’re younger or older, your daily spending rises when you have kids under age 18, then drops back down again.

The bottom line: Having kids is costly.  But they sure do make life interesting, don’t they?

For more Gallup survey results, click here.

To understand changes in U.S. demographics … check right at home first.

American HouseholdsJust because the housing bubble of the mid-2000s resulted in foreclosures, a down economy, and more young people moving back in with Mom and Dad … don’t believe that more fundamental demographic changes aren’t continuing to have a long-term effect as well.

This is underscored by newly published data on American households issued by the U.S. Bureau of Census, which breaks down statistics on the more than 121 million households in the United States.

As of 2012, the average size of the U.S. household stood at 2.55 people.  That’s a decline of about one person per household since 1950.

What’s contributed the most to the decline of this average has been the increase in single-person households.  According to the Census Bureau, those households now account for more than a quarter of all households in the country:

  • One-person households:  ~27% of total U.S. households
  • Two-person HHs:  ~34%
  • Three-person HHs:  ~16%
  • Four-person HHs:  ~13%
  • Five-person HHs:  ~6%
  • Six-person HHs:  ~2%
  • Seven or more persons per household:  ~1%

In fact, the number of single-person households has gone up five-fold since 1960.  A major part of the reason is the large percentage of older Americans (age 75+) who live alone – more than half.

That compares to only a quarter of households headed by people under the age of 30.

Other interesting factoids from the Census Bureau stats reflect some of the changing social mores in American society:

  • There are nearly 8 million unmarried couples living together – more than double the figure less than a decade ago.  (It was ~2.9 million in 1996).
  • Married households now make up fewer than half of all households.  (In 1970, that percentage was over 70%.)

But one demographic statistic does seem to reflect the consequences of the recent economic recession and the contraction in the American labor force:  As of 2012, only ~52% of married couples have both spouses in the labor force, which is down from ~56% reported in 2000.

United States Bureau of CensusThese new stats come from the U.S. Census Bureau’s latest Annual Social & Economic Supplement to the Current Population Survey, the data for which was collected  in March and April 2012 from a nationwide sample of approximately 100,000 addresses.

You can view additional findings here.

Experian Takes the Pulse of Hispanics in the United States

Hispanic Market Report from ExperianIt’s no secret that the share of the American population identifying itself as Hispanic or Latino is growing.

The latest evidence of this is a report just released by Experian Marketing Services. It shows that ~16% of Americans age 6 and older fall into this category.

That’s an increase of two percentage points in just six years.

But here’s an even more eyebrow-raising statistic: Among Americans aged 6 to 34, nearly one in four are Hispanic or Latino.

What this means is that the geographic zones of the country usually associated with Hispanic population – California and the Southwest, Central and South Florida, Chicagoland, and New York City/Northern New Jersey – will surely expand to encompass other geographic clusters as well.

Experian’s research also shows that Hispanic households account for approximately 10% of all discretionary spending in the U.S.

But in select metropolitan areas, the share of spending by Hispanic households is greater — sometimes substantially so:

  • San Antonio Metro Area: ~60% Hispanic share of all HH discretionary spending
  • Miami: ~37%
  • Los Angeles: ~33%
  • Houston: ~17%
  • San Francisco: ~14%
  • Chicago: ~12%
  • New York: ~12%
  • Dallas: ~11%

While the country now has many second- and third-generation Hispanic individuals and families, the Experian research finds that even with these consumers, emotional ties to the Spanish language carry over to companies that advertise their brands in Spanish.

Not surprisingly, more than half of Spanish-dominant Hispanics agreed that when they hear a company advertise in Spanish, “it makes me feel like they respect my heritage and want my business.”

But among English-dominant Hispanics, ~30% feel the same way as well. And similar percentages feel a much greater sense of loyalty to such companies.

There’s another interesting takeaway from the Experian research, too. Hispanic consumers tend to be more optimistic about their personal financial situation – and that of America as a whole – than their non-Hispanic counterparts.

This sense of greater optimism has been a common thread among all Experian surveys of this type, where the research has shown a persistent positive margin with Hispanics of about five index points over the rest of the survey sample.

That level of optimism is refreshing to see!

Teens’ Rites of Passage: Technology Trumps Transportation

Technology, not cars with teens.
Technology, not cars, are where it’s at with teens today.

Thirty years ago, the rite of passage going from being a kid to adulthood had to include having your own automobile.

Not so today.

In fact, the percentage of young adults who even have their driver’s license has declined considerably:  In the early 1980s, nearly half of 16-year-olds in America had a driver’s license. By 2010, that percentage had dropped to just ~28%.

What happened between then and now? A number of things, but the biggest may be the rise of consumer electronics and social media.

Recall what an automobile could provide a young adult in the 1980s: access to all of the kid-popular activities of the day: shopping, music, movies, getting together with friends, and so forth.

Today, teens can access pretty much all of that right at their fingertips via the Internet or a smartphone.

You want clothes? Order them online.

Music? Download it to your smartphone.

Communicate with friends? Just Skype or text away.

Meanwhile, between more sophisticated, costly auto maintenance and the high price of gasoline, owning a car has only become more expensive.

Auto insurance premiums for teens? Outta sight.

Plus, it’s just more of a hassle to get a license today. Driver education classes are disappearing from many a public school classroom, the casualty of budget cuts. Stricter state laws make it much more difficult and time-consuming to rack up the necessary behind-the-wheel training hours prior to taking driving tests.

The result is fewer kids getting licensed during their teen years.

In 1983, nearly 70% of 17-year-old Americans had drivers licenses … a figure that dropped to just ~46% by 2010.

Even for 18-year-olds, the percentage holding drivers licenses declined from ~80% in 1983 to only about 60% in 2010.

A recent survey conducted by Zipcar found that millennials (people age 18 to 34) would rather shop online than in stores. No car needed for that.

And when presented the choice between giving up their phone or their tablet computer or their car … two thirds of the Zipcar survey respondents would forego the car.

This is a veritable sea change in attitudes about wheels.

In fact, one could conclude that the very things that cars once represented – the “vehicle” that enabled you to “do what you want, see who you want and be what you want” – is what actually describes the digital and social media world today.

Meanwhile … the car is now just a way to get to your part-time job. Ugh.

Asian-Americans Set the Pace

Asian Americans setting the pace in education, income and career success, according to the Pew Research CenterAs an American with Asian relatives in my family, I’ve witnessed first-hand how having a strong work ethic and a dedication to industriousness leads to success here on our shores.

And now a new Pew Research Center study demonstrates that the anecdotal evidence of our family reflects a larger reality.

Bottom-line, Asian Americans are not only the fastest-growing racial group in the USA today, they’re also the best-educated, highest-income segment.

According to the Pew research, Asian-Americans are also more satisfied with their lives compared to the general public … as well as more satisfied with their own personal finances and the overall direction of the country.

Other questions on the Pew survey reveal that Asian-Americans place more value than other Americans in time-tested values like parenting, marriage, hard work and career success.

But they’re also distinctly “21st century” … in that they’re the most likely of any major group in America to live in mixed neighborhoods and to marry across racial or ethnic lines.

The findings of the Pew survey are even more interesting when we realize that the U.S. Asian population remains majority-immigrant – nearly 75%, in fact. Asian-Americans now represent almost 6% of the U.S. population, some ~18 million people. That’s up from less than 1% of the population in 1965.

The Pew study contains interesting income and education demographics that place Asian-Americans above all other groups. But the research also addressed attitudinal measures and found that most Asian-Americans believe the United Sates is better than their country of origin in a variety of quality-of-life factors, including:

  • The opportunity to “get ahead” (~73% in USA versus ~5% in country of origin)
  • The freedom to express political views (~69% vs. ~3%)
  • Treatment of the poor (~64% vs. ~9%)
  • Conditions for raising children (~62% vs. ~13%)
  • The freedom to practice religion (~52% vs. ~7%)

Opinion is mixed in one attribute: “the moral values of society.” In this case, ~34% of Asian-American respondents believe that the United States does better, compared to ~28% who give the edge to their country of origin.

And in one big measure – “the strength of family ties” – the U.S. falls way behind: Only ~14% perceive the U.S. does better in this attribute, while a whopping ~56% give the nod to their country of origin.

The Pew report provides a fascinating snapshot of the current situation characterizing the Asian-American experience.  More details from the Pew Research report can be found here.