What's Age Got to Do With It?
The Great Recession has taken its toll on Generation Y, Generation X, and Baby Boomers in different ways. When we published our last report on each of these generations, "Generational Spending" (November 2008), the impact of the Great Recession was first being felt on a wide scale. Now—more than three years later—this month's issue examines how each generation is faring as we emerge from the greatest economic calamity of our time.
For the purpose of this report, we have adopted the U.S. Census Bureau's method of defining generations, which sets the boundaries for generations according to population growth. When annual population growth averages above or below 4 million for an extended period, the first and last years of that period mark the boundaries for that generation. For example, Generation Y had an average population growth of more than 4 million per year from 1977 to 1994, so those years are the bookends for this generation.
One of the biggest concerns of Gen Yers is finding a job that will help them pay down their massive student loans. According to the Federal Reserve Bank of New York, student loan debt is so high that it has already surpassed credit card debt in America and is on pace to exceed $1 trillion this year. Making it hard to pay down that debt, though, is the tough job market. According to the U.S. Bureau of Labor Statistics, the unemployment rate among 20- to 24-year-olds rose steadily from 8.2 percent in 2007 to 15.5 percent in 2010. It has improved only slightly, to 14.5 percent, in June 2011.
Gen Xers have very different concerns. Their net worth is much lower than what Baby Boomers' net worth was during the same life stage. As a result, one industry expert in the feature story "Gen X: Stuck in the Middle" says, "This is the first generation where they don't have the same expectation of living better than the prior generation."
However, even after factoring in their financial situation and that the 49 million Gen Xers are smaller in number than Boomers (76 million) and Gen Yers (72.5 million), marketers shouldn't overlook them. Gen Xers are extremely influential, especially if members of this generation are financially supporting two additional generations—their aging parents and young children.
As for Baby Boomers, there should be more opportunities for marketers who continue to serve this cohort, at least for the next few years. The fear that Baby Boomers are starting to retire is perhaps not as scary as once deemed. One industry expert in the feature story "Baby Boomers: Every Silver Lining Has a Touch of Grey" sums it up nicely: "While the first of the Boomers are reaching sixty-five, the median age of Boomers is more like fifty-six. And most surveys these days report that Boomers plan to keep working at least four years past age sixty-five. So let's not jump to any conclusions that Boomers are leaving their peak earning—and spending—years any time soon."
To find out more about the new attitudes and expectations of each generation in a post–Great Recession world, read our special feature package, "Talkin' 'Bout My Generation." Knowing their new concerns will help any customer strategist to better understand and connect with them.