Key Findings July/August 2011
Cultural Influences in Annual Consumer Spending
Whites and Asians typically have the largest household incomes and therefore more disposable income than Hispanics or Blacks. However, Hispanics spend more on women’s apparel than Whites. Blacks spend more on sporting goods than Asians. The following chart provides further details on spending levels by race/ethnicity.
Annual Consumer Spending Report, by Product Category, by Race/Ethnicity
Online Spending: Women vs. Men
Today, women and men each account for 50% of the Internet audience. The majority of each (85% of women and 83% of men) visit retail sites, but their shopping habits vary as shown in the chart below.
Teens’ Cell Phone Use
Some 80% (17 million teens aged 13-19) have a cell phone, reflecting a 40% increase since 2004. Most (57%) say that their phone is the key to their social life, and 47% think their social life would end if they did not have the device. Some 42% claim they could text blindfolded. To most (52%) cell phones are a source of entertainment, with one-third using their devices to play games.
Eight in 10 (80%) say their phones give them a sense of security. They use it when they need a ride home (79%), to obtain important information (51%), or help someone out who is in trouble (35%).
What more do teens want from their cell phones?
- 81% want it to be shock proof and waterproof
- 80% want an unlimited power supply
- 80% want guaranteed secure data access only to the owner
- 66% want it to allow them opportunities to be educated anywhere in the world
- 66% want it to provide access to personal health records
- 58% want it to have a privacy screen
American Dream is Not Attainable
Most Americans say the “American Dream” is just an impossible imaginary goal – as opposed to a real achievable ideal. Majorities of Hispanics (76%), Blacks (75%), and Whites (68%) agree the dream is not attainable. However, majorities – including 84% of Blacks, 82% of Hispanics and 78% of Whites – also say that one of the best things about America is its cultural diversity.
America’s Standing in the World
The following chart shows how American’s feel about the country from a global perspective.
American Exceptionalism
Source: Pew Research Center, March 2011
Postal Mail vs. Email
About 53% of U.S. adults say they are more likely to pay close attention to information they receive by postal mail than email. Reasons they prefer postal mail to email include:
- Ability to read information whenever it is convenient for them (79%)
- Ability to refer back to information when needed (66%)
- Ability to take mail to different places to read (46%)
- Information is more private when sent via postal mail (36%)
- Think a lot of online information cannot be trusted (25%)
- Are simply more trusting of information sent by mail than email (20%)
How consumers Prefer to Receive Information, Postal Mail vs. Email
Sports Fans Favorite News Sources
More than two-thirds (68%) of sports fans say they are casual fans who follow sports from time to time, the other 32% are avid fans who try to stay as up-to-date as possible on sports scores and news. Some 74% of avid fans are male, with 26% female. Causal fans are 53% male and 48% female. Three in 10 sports fans (30%) say they are more likely to buy a product that is endorsed by their favorite team or player. Among avid fans, the percentage rises to 41%. The following chart shows sports fans’ favorite news sources.
Primary Medium That Sports Fans Use to Get Sports News and Information, 2010
Mobile Technology and Coupons
One in 10 cell phone owners (10%) have visited a store because they received a coupon on their mobile phone. For 18-34-year-olds, this proportion increases to 20%.
Almost one-half (45%) of shoppers say they prefer to receive mobile coupons via text message, compared to 28% who want to find coupons themselves via an app, and 27% who want coupons texted to them while they are in the store.
Male mobile shoppers are more likely than average to prefer to locate mobile coupons themselves via an app (51%) and to receive them via text while in the store (39%). They are also more likely than average to use mobile coupons in these locations:
- Clothing stores (35% of male mobile shoppers vs. 15% cell phone owners overall)
- Department stores (30% vs. 15%)
- Electronics stores (30% vs. 10%)
- Service locations (16% vs. 7%)
Medical and Productivity Losses Related to Smoking
The combined cost of medical spending and productivity losses caused by smoking in the U.S. is about $193 billion a year, according to the U.S. Centers for Disease Control and Prevention. Tobacco use is responsible for 20% of U.S. deaths. Employers find that a smoker is 18% more expensive than a nonsmoker.
Because of these costs, many companies use incentives or insurance surcharges to encourage desired employee behavior. Companies such a Macy’s PepsiCo and Gannett make employee smokers pay hundreds of dollars in additional insurance each year. Others, such as Union Pacific and Scotts Miracle-Gro refuse to hire smokers.
The smoking rate is four times higher among teens not headed for college than for teens pursuing higher education. In 2009, almost 30% of adults with at most a high school education were current smokers compared with 22% of those with some college and just 9% of those with at least a bachelors’ degree.
Most state governments have an excise tax on cigarette sales to help discourage smoking and to raise revenue to pay for smoking-related health problems. These cigarette excise taxes range from around $0.17 per pack in Missouri to $4.25 in New York, with a state average tax of $1.45 per pack. A pack of cigarettes costs about $11 in New York, compared with a national average of $4.80.
Medical Tourism
According to Ypartnership, one-half of Americans are familiar with the term “medical tourism” (travel to other countries to undergo medical treatment). Of the 17% who say they would consider visiting another country for medical care, their reasons include:
- Lower cost of care in other countries (84%)
- Comparable or better quality treatment or care (66%)
- The procedure they seek is not covered by insurance (43%)
- Shorter wait time to receive treatment (41%)
- Access to non-FDA approved treatment (22%)
Americans Would Choose Wealth Over Youth, Beauty
When given the choice, Americans say they would rather be richer (43%) than thinner (21%), smarter (14%), or younger (12%). About one in 10 (9%) say they would not choose any of these options.
Women (29%) are more than twice as likely as men (14%) to choose to be thinner, whereas men are more likely than women to choose to be richer (46% vs. 41%) and younger (16% vs. 8%). The following chart shows preferences by age.
Would Americans Rather be Richer, Thinner, Smarter, or Younger? By Age, 2010
Cloud Computing Gains Attention of CIOs
An IBM study of more than 3,000 global CIOs (Chief Information Officers) shows that 60% of organizations are ready to take up cloud computing over the next five years. This is almost double the number of CIOs who said they planned to utilize cloud computing when asked in IBM’s 2009 CIO study. The 2011 study revealed a large increase in the focus on cloud, specifically in media and entertainment (both grew to 73%), automotive (70%) and telecommunications (69%).
A review of specific countries shows that seven out of 10 CIOs in the U.S., Japan and South Korea, as well as 68% in China, currently identify cloud as a top priority. In 2009, CIO interest in cloud was only about 30% in each of these countries.
U.S. Income Disparity Reaches Great Depression Level
Since 1987, repeated surveys by the National Opinion Research Center have shown that 60% or more of Americans agree or strongly agree with the statement that “differences in income in America are too large.”
Income disparity in the U.S. has now reached levels not seen since the Great Depression. For example, in 2008, the top 0.1% of earners took in more than 10% of the personal income in the United States, including capital gains, and the top 1% took in more than 20%.
According to a 2010 landmark analysis of tax returns by economists Jon Bakija, Adam Cole and Bradley T. Heim, the largest chunk of the highest-income earners are executives and other managers in all types of businesses.
The top 0.1% of earners make approximately $1.7 million or more, including capital gains. Of those, 41% were executives, managers and supervisors at non-financial companies with nearly one-half of them deriving most of their income from their ownership in privately-held firms. An additional 18% were managers at financial firms or financial professionals at any sort of firm. The next largest group was lawyers with 6.2% and real estate professionals at 4.7%. Media and sports figures – who are often assumed to be a large portion of very high-income earners – collectively made up only 3%.
Most Workers Enjoy Their Jobs, While Open to Change
Most workers (95%) do not expect to work in the same job for the remaining years of their careers. Since the recession, 62% feel less secure in their jobs and 37% feel more negative about their job than they did before the recession. Some 53% have had to assume added responsibilities during the recession because coworkers were laid off. About 59% say they enjoy their job but would consider another one with better pay and/or benefits; 27% dislike their job and are actively looking for a new one; and 9% say they dislike their job but will wait until another opportunity presents itself or for things to improve before they look for a new job.
Capital vs. Labor Spending
Since the recession recovery began in mid 2009, U.S. companies’ spending on capital has grown much faster than spending on labor. For example, spending on equipment and software has jumped 25.6% in the last seven quarters, while companies’ aggregate spending on employees has grown only 2.2%.
Historical analysis shows that it’s typical for hiring to lag capital spending, but the gap in spending growth is significant this time around. In the seven quarters immediately following each of the last 10 recessions, equipment and software spending rose on average 15.6%, while labor spending rose on average 8.8%.
One reason hiring has been so sluggish is that equipment and software prices have been dropping quickly, while labor costs have been rising fast. The higher cost of labor is primarily being driven by rising benefits costs and, in particular, rising health insurance costs. For example since mid 2009, wage and salary costs have only grown about 2.8% while healthcare costs have risen almost twice as much. On the other hand, the cost of equipment and software dropped by about 2.5% during this period.
Building Owners Expect Rise in Energy Prices
Some 80% of building owners expect double-digit energy price increases over the next year, which has prompted them to set an average energy reduction target of 12%, according to Johnson Controls annual global energy efficiency survey of almost 4,000 building owners and operators around the world. The most popular energy efficiency improvements include lighting and heating, ventilation, air conditioning and controls improvements.
The main motivation for energy efficiency projects was energy cost savings. Government incentives and enhanced public image came in second and third in the survey. Greenhouse gas reduction, which was the second highest motivator in 2010, ranked fourth in 2011.
Access to funding was the top barrier for conducting energy efficiency projects for respondents in the U.S./Canada (38%) and Europe (30%). Still, some 77% of U.S./Canada building owners are planning to include green building elements in their facility plans over the next 12 months.
World Greenhouse Gas Emissions
Greenhouse gas emissions reached their highest point ever in 2010, which the International Energy Agency says will making it “extremely challenging” to prevent the global temperature from rising to dangerous levels.
The IEA reported that 30.6 gigatons (Gt) of carbon dioxide were emitted in 2010, up 5% from 2008’s level of 29.3 Gt. The 2009 emissions had dropped to 29.0 Gt due to the recession.
About three-quarters of the 2009-2010 emissions increase was from developing countries, although they only accounted for 60% of global emissions last year. Some 44% of the estimated CO2 emissions in 2010 came from coal, 36% from oil, and 20% from natural gas.
The IEA says that for a two degree increase in global temperature to be averted, worldwide energy-related emissions in 2020 must not be greater than 32 Gt. This means that over the next 10 years, emissions must rise by less than they did between 2009 and 2010.
Plastic Disclosure Project to Raise Awareness
About 300 million tons of plastic is produced globally each year. Only about 10% of that is recycled. Of the plastic that is trashed each year, an estimated seven million tons ends up in the sea. There, it breaks down into smaller and smaller fragments over the years and is eventually swallowed by marine life. (One study found that fish in the North Pacific ingest as much as 24,000 tons of plastic debris per year).
Plastic is light, cheap and durable – it does not “go away.” Over one-half a century’s plastic is now out there. To prevent plastic from getting into the environment, companies around the world are being asked by the Plastic Disclosure Project to voluntarily assess their plastic use. This effort is expected to raise worldwide awareness of the problem and highlight potential savings to be had through changes in plastic production and consumption practices.
Bullets
- Married women who earn 60% or more of their household income are 38% more likely than average to get divorced.
- Four in 10 American parents (41%) say that texting makes them closer to their children.
- Some 77% of women say they live by the philosophy “women empowering women.”