Inconspicuous Consumption

American Demographics, April 1, 2002

Baby Boomers, who have rewritten society's rules most of their lives, may yet redefine spending in retirement as well. A recent survey found that 8 in 10 intend to keep working into their retirement years. Long-term care insurance, which has been available for years, is mostly a bust among Boomers. Many view nursing homes with the same distaste as prisons and vow to avoid them at all costs. "There's only so much you can do to alter the natural process of aging," says Brown. "But the theme of the Baby Boom is Rod Stewart's song 'Forever Young.' Boomers are going to try like hell to do whatever it takes to resist getting older."

Contributing Editor Michael J. Weiss is a journalist, marketing consultant and author, most recently of The Clustered World (Little, Brown, 2000).

Race tends to impact consumer spending in unusual ways. African Americans pay a higher portion of their budgets for housing, consumer electronics and life insurance, traditionally viewed as vehicles for saving and financial protection. Hispanics spend more on necessities such as clothes, food and transportation. With more discretionary income than other groups, whites and Asian Americans earmark more of their budgets for entertainment, food away from home, health care and pensions.

ALL WHITE & OTHER* BLACK HISPANIC
Number of consumer units (000s)        109,367   96,137   13,230      9,473
Average annual expenditures           $38,045   $39,406   $28,152  $32,735
Dollar share   Apparel and services    4.9%   4.6%   6.2%   6.3%
Men and boy's          1.2%   1.1%   1.4%   1.5%
Women and girl's       1.9%   1.9%   2.2%   2.1%
Entertainment          4.9%   5.1%   3.5%   3.6%
Fees and admissions          1.4%   1.5%   0.6%   0.8%
Television, radios, audio equipment    1.6%   1.6%   2.0%   1.7%
Food             13.6%  13.2% 14.7% 16.4%
Food at home          7.9%   7.5%   9.6%   10.7%
Food away from home       5.6%   5.7%   5.1%   5.7%
Health care          5.4%   5.7%   4.0%   3.8%
Drugs             1.1%    1.2%   0.9%   0.6%
Health insurance          2.6%    2.7%   2.3%   1.8%
Housing             32.4%   32.1%   35.0%  33.1%
Owned dwellings          12.1%  12.6%   9.4%   9.0%
Rented dwellings          5.3%   4.5%   9.7%   10.1%
Personal insurance and pensions       8.8%   9.0%   8.4%   8.0%
Life and other personal insurance    1.0%   1.1%   1.3%   0.6%
Pensions and Social Security       7.8%   7.9%   7.1%   7.4%
Transportation          19.5%   19.5%   18.3%   20.5%
Cars and trucks, new          4.2%   4.4%   3.2%   3.3%
Cars and trucks, used          4.7%   4.5%   4.6%   6.3%
Source: Consumer Expenditure Survey, 2000

*Includes Asian Americans

In the 1990s, time-pressed consumers ruled the marketplace. According to surveys by America's Research Group, furniture retailers needed more advertisements to lure shoppers into their stores. By 2000, the vast majority of consumers tried to save time and money by shopping at discount stores like Wal-Mart.

1990 2000     Furniture shoppers   Number of ads consumers saw/heard before
shopping 3.5 4.5   Number of stores they patronized 2.3 1.4   Christmas season
shoppers   Percentage of consumers who shopped at discount stores 53.6 90.3%
Source: America's Research Group