Gallup.com recently released results of a survey of Baby Boomers’ discretionary spending, which suggests that, as a group, Boomers’ spending fell from 2008 high of $115/day to a low of $55/day in early 2009. Since then, it’s rebounded back to $105/day. I.E., Boomer spending has nearly doubled since the bottom of the recession.
While the methodology of the survey leaves a lot to be desired, the results still provide some interesting food for thought. Based on the numbers reported, Gallup suggests that there are really two distinct Boomer cohorts. They dub them ‘leading-edge’ (born 1946-’55) and ‘trailing-edge’ (born 1956-’64). Gallup’s not the first to make such a distinction. Way back in 1985, Schuman and Scott conducted a broad survey of Baby Boomers, asking them to recall seminal social memories. Older Boomers cited the Cuban Missile Crisis, the assassinations of JFK and MLK, the civil rights movement, feminism; and sex, drugs, and rock ‘n’ roll. Younger Boomers cited the cold war, Vietnam war & protests, and Watergate. The second group is less cohesive and more cynical. But, I digress...
According to Gallup, leading-edge (technical term: ‘older’) Boomers are more likely than trailing-edge (younger) ones to report that they’re spending more this year than last year. Gallup draws this conclusion: “Leading-edge boomers appear to have greater latitude in their spending—and are applying it to things they would prefer to do rather than things they have to do.” [Their italics]
There are a number of reasons that members of the older cohort would have different financial situations, compared to the younger cohort. Most of the older ones are over 65; they’re more likely to be retired, hence less burdened by work-related expenses and more likely to have their financial situation tied to the stock market, which has recovered to pre-recession levels. Trailing-edge Boomers are the ones most likely squeezed from both sides, too; they could still be helping pay for their kids’ college educations, and are more likely to have surviving parents who also need assistance.
For all that Gallup’s study prompts as many questions as answers, it’s nice whenever a mainstream organizations views “Baby Boomers” and/or “Seniors” as more than a monolithic group. The distinction of leading-edge and trailing-edge Boomers is a start.
There are close to 100 million Americans over 50. No group that large could possibly be made up of people who all think, or for that matter spend, the same.
The Statistician’s Curse: Gallup’s methodology notes are sparse, and do not address any of these issues...
- We haven’t been told whether or not these figures are inflation-adjusted. If they are not corrected, today’s $105 figure is still quite a bit shy of 2008’s $114 peak. Full recovery would equate to about $125 today.
- This study is based on a telephone survey in which random respondents self-reported an estimate of the amount they’d spent that day, in various categories. Self-reporting is notoriously inaccurate.
- If Gallup has research examining whether or not the recession has influenced self-reporting errors, they haven’t shared it.