As the world heads into a new decade, people feel a mixed bag of emotions. Initially, they might be optimistic about what the future holds. However, they may also be anxious because they fear the unknown. But by looking at demographics trends, one can uncover shifting patterns in behaviors and attitudes. We can use this data to predict the future better. This way, we won’t be sailing in uncharted waters blindly.
Some trends deal with the attitudes of people from different generations, like boomers and millennials. Others are hot-button topics like immigration. Its effects can spill over to other facets like labor and politics. On the other hand, there are trends like migration patterns that are borne out of practicality yet also affect the housing market.
Above all, analyzing demographic trends can provide directions on how we can tackle issues as a society. Below are some key demographics trends worth noting.
Top Seven Demographic Trends for 2020 and Beyond
1. Millennials: A Force to Reckon With
Millennials, or those who are aged 23 to 38 as of 2019, are currently numbered at 72.1 million. As one of the largest generations in history, they now outnumber Boomers and Gen Xers. Analysts expect their population to reach a high of 74.9 million in 2033. Being a dominant generational demographic means wielding a sizeable purchasing power. Millennials are projected to spend $1.4 trillion this year.
Businesses who want to capture the millennial market must stay attuned to their beliefs and lifestyles. Firstly, millennials are putting off having kids. Women are waiting until age 28 to bear a child. This has led birth rates to be at their lowest since 1987. If you’re an owner of a baby-centered business, don’t expect to cash in on millennials anytime soon.
Secondly, millennials aren’t in a rush to buy big-ticket items that typically mark adulthood. Since 2005, there has been an increase in adults aged 18 to 34, sharing a home with their parents. Even so, the majority of millennial renters plan to buy a house sometime in the future.
The millennial generation is also less keen on buying cars, music, or luxury goods. Thanks to the sharing economy, they can enjoy these products without the burden of ownership. When they do buy something, they are less concerned about the brand. Instead, they pay attention to quality. Like the true digital natives that they are, they tend to buy items online and prefer businesses with a social media presence.
Source: U.S. Census Bureau, 2019
2. Changing Home Life
Contemporary views on marriage and family paint an interesting picture of the American home. One notable trend is the steady decline in marriage rates both for the middle and lower classes. Today, only 50% of American adults are married, based on data from the U.S. Census Bureau. In contrast, marriage rates were at its highest in 1960 at 72%.
A couple of factors are behind this trend. When men’s economic prospects aren’t promising, their wages fall. With lower chances of marrying and supporting a family, men tend to work less. For women, access to a college degree allowed them to enter the workforce. As a result, women put off parenthood to tend to their careers. In addition, access to birth control puts them in charge of their fertility. With the ability to earn for themselves, women did not need to be married for economic survival.
While marriage rates are dwindling, cohabitation is on the rise. The number of unmarried people who cohabit has risen about threefold in the past two decades. From only six million in 1996, it became 17 million in 2017. People who favor cohabitation see it as a middle ground between singlehood and marriage. Thus, people who are hesitant to commit to marriage and want to avoid divorce resort to this arrangement.
3. Women in the Labor Force
Women have made great strides in education. For instance, 2018 data reveals that women outdid men in getting educational degrees at all levels. They earned around 57% of bachelor degrees, while 59.4% of them earned master’s degrees, and 53.3% earned doctorate degrees. In 2018, around 76 million women aged 16 and above made up 46.9% of the overall labor force.
In the workplace, a rosy picture is not in sight for women. Since 2000, women’s participation in the US labor force has declined. This, despite data that reveals that a country’s Gross Domestic Product (GDP) rises when women are at work. Female participation in the labor force is expected to peak at 47.1% by 2025 and will gradually diminish. Researchers believe giving paid family leave and increased access to childcare will keep women in the workplace.
On a positive note, analysts see incremental improvements in the gender pay gap. However, it has taken years to address such inequality. In 2020, women earned ¢98 for every dollar that men earn. This figure takes into account the similarity between their jobs and qualifications or what is referred to as the controlled pay gap. Initially, this started at ¢97 in 2015. It turned to ¢98 and has been stagnant ever since.
Moreover, the pay gap worsens as women advance in their careers based on Payscale’s Gender Pay Gap Report for 2020. Women who hold executive positions are paid ¢95 to a dollar than their male counterparts. To close the gender pay gap, experts recommend organizations to have transparent pay policies.
Source: PayScale Gender Pay Gap Report for 2020
4. Immigrants Drive Population Growth
America is said to be a nation of immigrants. This still holds today and well into the future. In 2018, there were 44.7 million foreign-born individuals or immigrants in the United States. They make up 14% of the country’s population. Mexicans comprise the bulk of the immigrant population at 25%. On the other hand, China and India accounted for 6%, the Philippines for 5%, and El Salvador for 3% of the immigrant population in the US. Immigrant populations are concentrated mainly in three states: California, Texas, and New York. Together, these areas account for 45% or nearly half of the immigrant population in the country.
This trend carries over into the labor force as well. There were 28.4 million immigrant workers in 2018, which form 17% of the US workforce. The health care and social assistance industry has the largest number of immigrant workers at around 4.1 million, with manufacturing at 3.4 million, and accommodation and food services at three million.
The number of foreign-born people in the US is expected to reach 78.2 million by 2065. Together with their descendants, they are predicted to drive 88% of the population growth in the US in the same year.
In contrast, the number of non-Hispanic White people is expected to decline in the upcoming decades. Currently, there are 199 million non-Hispanic White people. In 2060, this number is projected to fall to 179 million, mainly due to decreasing birth rates and increasing death rates. Because of this, pundits predict that non-Hispanic whites will be a minority by 2045.
Immigrant Workers by Industry
Health Care and Social Assistance: 4.1
Health Care and Social Assistance
Accommodation and Food Services: 3.0
Accommodation and Food Services
Retail Trade: 2.9
Source: U.S. Census BureauCreated by CompareCamp.com
5. Migration to South and the West
More and more Americans are moving to the south and the west. They do so not only for greener pastures but also for affordable housing and better weather.
Census data indicate that counties in the south and the west experienced the biggest population growth. For example, Texas, Florida, and Utah registered positive domestic migration in 2018. Consequently, they placed among the top ten fastest-growing metro areas in the country.
When it came to the number of people moving in, Florida experienced the biggest number of domestic in-movers. A total of 566,476 people from other states moved into Florida within the past year. On the other hand, California had the most significant number of domestic out-movers at 661,026 people. These out-movers usually relocate to areas near California, such as Texas, Arizona, Washington, Oregon, and Nevada.
Economists point out a number of reasons behind this trend. First is the flourishing creative marketing and technology industries in the Pacific West region, especially in Portland and Seattle. Secondly, the low cost of living makes these areas attractive to retirees. Also, people from old and young generations alike appreciate access to green spaces and outdoor activities in these areas.
6. More Boomers are Set to Retire
Boomers, or those who born between 1946 to 1964, make up the second-biggest generations in the U.S. In 2019, they were aged 55 to 73 and are estimated number some 71.6 million. Boomers began to reach retirement age by 2011. For the next 19 years, around 8,000 to 10,000 Boomers will reach age 65 every day.
People usually envision going fishing or engaging in other carefree activities upon retirement. However, that may not be the case with the looming retirement crisis for boomers. Among the issues that boomers face is having little savings and miscalculating healthcare costs and retirement income.
What’s troubling is that 45% of boomers have no retirement savings at all. Fifty percent of boomers surveyed plan to use Medicare instead of long-term health care policies. As for retirement income, 44% said they have saved up less than $35,000. In contrast, Americans aged 65 to 74 typically spend $55,000 a year. In other words, boomers are ill-prepared for retirement.
Likewise, the Insured Retirement Institute surveyed boomers on what they plan to do once their funds get depleted. Most boomers said they would downsize or rely solely on Social Security. On the other hand, a third of respondents planned to return to work.
Source: Insured Retirement Institute, 2019
7. The Changing Landscape of Cities and Suburbs
Americans are saying goodbye to top-tier cities like New York and Los Angeles. Instead, they are moving into second-tier metros like Phoenix, Las Vegas, and Dallas-Fort Worth to take advantage of affordable housing. In second-tier metros, rent comprises 14 to 26% of the median income. In contrast, rent makes up 18% to 64% of the median income in top-tier cities. For example, the median home price in Maricopa, Arizona is at $280,000 or 21% of the median income, while in Los Angeles, it is around $630,000 or 38% of the median income.
Similarly, the suburbs are far from what they used to be. Compared to rural areas, suburbs are growing at a much quicker pace. Experts noted a 16% increase in the population of suburban counties since 2000. In contrast, populations in rural counties grew by only 3%. One reason is that immigrants choose to live in the suburbs because of easy access to schools.
Moreover, suburbs are turning into a cultural melting pot of sorts. Whites make up only 10% of the suburban population in 100 of the largest metros in the US. Such changes can have political repercussions. This is especially important as adults in urban areas tend to side with Democrats while those in the rural areas identify as Republican.
Trends That Will Shape the Future
To sum up, trends that cut across generations, race, and geography will shape the way Americans live and work in the future. Firstly, current demographic trends predict how millennials’ digital-first spending habits will drive the economy. Secondly, boomers will be retiring in droves but have to deal with financial issues. Meanwhile, traditional views of marriage start to crumble with the rise of cohabitation arrangements that take less commitment. Women and immigrants will continue to contribute to the labor force. But with low wages and increasing housing rates, people will be forced to move out of expensive cities to relocate to more affordable areas. Business owners and policymakers would do well to keep an eye out for these trends. Doing so will enable them to serve their customers and constituents with insight and understanding.
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- Women in the Workforce – United States: Quick Take.
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- 10 demographic trends shaping the U.S. and the world in 2017.
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- The US will become ‘minority white’ in 2045.
- New Census Bureau Estimates Show Counties in South and West Lead Nation in Population Growth.
- Three New Census Bureau Products Show Domestic Migration at Regional, State, and County Levels.
- Oregon Ranks as Top Destination.
- Goodbye LA, Hello Phoenix: Affordable Housing Makes Second-Tier Metros Top Choices for Moving.
- Key findings about American life in urban, suburban and rural areas.