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Demographic Trends

Wetzstein, Cheryl. "American Birthrate Rises" Insight on the News, Washington, DC: May 15, 2000 (p. 33).

Abstract:

According to a recent report, an increase in the number of women entering their prime childbearing years has led to an increase in the birthrate--as well as a record number of so-called "unwed births." The most positive trend reported in the study is the continued decline in the teen birthrate, which fell for the seventh year in a row.

Full Text:   (Copyright Washington Times Corporation May 15, 2000)

An increase in the number of women entering their prime childbearing years has led to an increase in the birthrate as well as a record number of so-called 'unwed births:

More than 3.9 million babies were born in 1998, up 2 percent from 1997, according to a report issued by the National Center for Health Statistics, or NCHS. Meanwhile, the number of "unwed births" - 1,293,567 - reached a new high, which experts attribute largely to a surge in cohabitation.

Data from the early 1990s indicate that 40 percent of unwed births are to cohabiting parents. That is, while these children are counted as out of wedlock, they may be living in relatively stable homes. Cohabitation is replacing marriage "as the first living together union," especially among young adults, sociologists Barbara Dafoe Whitehead and David Popenoe reported last year. Studies show that cohabiting is less stable than marriage, however; cohabiting parents break up at higher rates than married parents.

The NCHS, an agency with the Centers for Disease Control and Prevention, also reported that:

* Birthrates for women in their thirties are at their highest in three decades. This 1998 increase was the first since 1990, when there were 4.1 million births.

* The number of births to girls age 10 to 14 dropped 7 percent from 1997 and now is the lowest in three decades. The birthrate for these very young girls was one birth per 1,000 girls in 1998, with 9,462 babies born.

* Birthrates to high-school teens (ages 15 to 17) and older teens (18 and 19) declined in 1998, by 5 percent and 2 percent, respectively.

* Cigarette smoking by pregnant women was down by 2 percent, with 12.9 percent saying they smoked. But smoking among pregnant teens increased for the fourth year in a row.

* The age of the father was missing on more birth certificates: In 1990,16 percent of birth certificates had the father's age; in 1998, only 14 percent of certificates had the father's age.

* Twin births rose 6 percent to 110,670 - the largest single-year increase in several decades. The number of triplets and other multiple births climbed 13 percent.

One reason for the overall increase in births: More U S. women entered their childbearing years – there were 28.6 million women between the ages of 15 and 44 in 1997, for instance, and 29.2 million such women in 1998. This increase helped nudge the overall birthrate to 14.6 births per 1,000 persons, according to NCHS demographer Stephanie J. Ventura.

Perhaps the most positive trend reported in the study is the continued decline in the teen birthrate, which fell for the seventh year in a row These declines "almost fully reverse" a 24 percent increase in teen birthrates that occurred between 1986 and 1991. "The continued improvement in teen birthrates is good news for all of us who are working to help our teenagers make responsible choices," said Health and Human Services Secretary Donna Shalala upon the report's release. "However, the increase in births to unmarried mothers, as well as the increase in teen mothers who smoke, are troubling."

Some critics put it more bluntly. "Why is giving birth when you're under 18 a national catastrophe, but giving birth at 18 years and one month is not?" asks Robert Rector, welfare analyst for the Heritage Foundation. Political leaders are not doing enough to combat illegitimacy, says Rector, which he calls a much bigger problem than teen pregnancy. While welfare reform's mandate is to reduce illegitimacy, governors are reluctant to target their excess welfare funds to that issue.

Last year, the United States had a record-low birthrate - 14.5 births per 1,000 persons; by comparison, the baby-boomer years of the 1950s and 1960s saw 24 births per 1,000 persons.

King, Carole Ann. "Researchers Say U.S. Is Giving Birth To First Affluent Mass Market" National Underwriter, Cincinnati, OH: May 8, 2000 (p. 7 & 13).

Abstract:

Researchers say the US may be giving birth to its first affluent mass market ever, but they warn that it is a mistake for marketers to treat the wealthy as one homogeneous group. Larry Cohen, director of Consumer Financial Decisions, a research and consulting firm in Princeton, New Jersey, that has been tracking wealth trends for the last 10 years, said that in 1998, the number of households classified as wealthy climbed to 25 million. In 1996, a CFD study classified 20 million people in the US as wealthy. "Does this mean, projecting into 2000, that there will be another large increase? I don't know," he said, adding, "it is reasonable to say that we will have more affluent people" in the future.

Full Text:   (Copyright National Underwriter Company May 8, 2000)

Researchers say the United States may be giving birth to its first affluent mass market ever, but they warn that it is a mistake for marketers to treat the wealthy as one homogeneous group.

Larry Cohen, director of Consumer Financial Decisions, a research and consulting firm in Princeton, N.J., that has been tracking wealth trends for the last 10 years, said that in 1998, the number of households classified as wealthy climbed to 25 million. In 1996, a CFD study classified 20 million people in the U.S. as wealthy. "Does this mean, projecting into 2000, that there will be another large increase? I don't know," he said, adding, "it is reasonable to say that we will have more affluent people" in the future.

As part of its "Affluent Market Research Program," New York-based Spectrem Group estimated that in 2004, there will be 31 million households with incomes of at least $100,000 and/or net worth of $500,000 or more. Spectrem said its research indicated that the affluent market is growing five times as fast as the general population.

Spectrem cautioned, however, that to tap into this potential, "providers need to execute strategies that reflect the diversity among these high-net worth households-from Gen X 'emerging affluent' to early-retiring Boomers."

CFD had similar advice. Its 1998 report, "America's Affluent: On the Threshold of the New Millennium," said that while the number of affluent American households has grown by 20 percent over the last two years, the growth has not been the same across all the affluent. `The danger for financial institutions seeking to serve these households is in malting the assumption that they are all alike. As this group grows, so do the variations that make a difference."

Wealthy households are growing at an unprecedented rate, and contrary to predictions, much of this wealth is new money and not inherited. To meet their needs, financial advisers of every stripe need to adjust their marketing and planning techniques.

CFD classified as affluent households with incomes of $75,000 (excluding business owners and retirees) and assets of $300,000 (excluding primary residence). In its 2000 study of the of fluent, these measures will be pushed up to $100,000 for household income and $500,000 in assets, Mr. Cohen said.

In the 1998 study, CFD's researchers segmented the households into groups that "have a demonstrably different aspect that dominates their financial services needs and decisions." Each of these segments, it said, is found to react differently to external events and marketing appeals.

Some insurers are already responding to these trends by refining their definitions of the affluent in ways that give them greater access to existing markets as well as upcoming ones.

Hartford Life, which uses CFD's research, is targeting the emerging of fluent market with one of its programs. It defines this market as households with combined annual incomes of $100,000 or more. Hartford believes that its best prospects for life insurance in this group have yet to reach their prime earning years, have young children and financial protection needs such as income replacement and supplemental retirement income.

To reach this market, Hartford is using a new wholesaler network to reach the stockbrokers who already provide investment products to the emerging affluent and now will be offering the insurer's variable life insurance products as a natural cross-selling opportunity. (See NU, April 3.)

Another insurer that is starting to segment the wealthy marketplace is Phoenix Mutual Life, Hartford.

"The demographics of the wealthy have widened by age and diversity," said Walter Zultowski, senior vice president of marketing and market research with Phoenix.

The company has just launched an ad campaign that emphasizes this point with the theme "money isn't what it used to be." A sub-theme of the ad campaign is that the affluent cohort is getting younger and most of its wealth is first-generation and not inherited.

The insurer is using study results that show that 45 percent of the nation's millionaires are younger than 55, compared to 26 percent in 1990. Forty-four percent of that wealth comes from wages, not inheritance, and another 23 percent comes from investment earnings.

"We are targeting three groups," said Mr. Zultowski, "senior corporate executives (they have high incomes, relatively expensive lifestyles, wealth tied up in 401(k)s and stock options); business owners (in a similar situation because their wealth is tied up in their businesses); and high-net-worth individuals near retirement or in retirement, (stock options, 401(k) assets are freed up)."

Obviously, "pre-retirement is a major sweet spot in the high-net-worth markets," he said.

Traditionally, marketers have assumed that wealthy individuals want "high-touch" and face-to-face interaction with advisers. Not so, according to Mr. Zultowski. `The wealthy want high-touch and high-tech. It's not true, however, that high-tech appeals only to the young. They all want to be masters over where and when they have these interactions and they want information 24-7."

Basically, "you have to approach this market with an open architecture and you have to provide value the way they want it," Mr. Zultowski said.

And they want more than just information on Web sites, focus groups told Phoenix. They want applications, strategies and solutions. In response, Phoenix is revamping its Web site to be more interactive, with features like calculators and exercises. "It has to take them somewhere," Mr. Zultowski said, adding that "we are not there yet, but we've made great strides."

For one, Phoenix is working on providing clients with a single account statement for all their business with the insurer. Right now, clients can get this through the home office or their adviser, but in the future, it should be available over Phoenix's Web site, Mr. Zultowski said.

The wealthy also want their particular needs as business owners or corporate executive or retirees to be understood by their financial advisers, he said, warning: "They don't want someone who merely brings them products; they want someone who brings them solutions for life situations. They want to know how to keep their kids from becoming spoiled by their wealth. As first-generation wealthy they ask questions like, `Why me? Why was I so lucky?' This has been a driver for philanthropy," Mr. Zultowski said.

Surprisingly the word "wealth" was not a turnoff for focus group participants. Mr. Zultowski was concerned that younger participants might have negative feelings about wealth, but this wasn't the case, he said: "Most didn't see themselves as wealthy" Their definition of wealth was "when you didn't have to think about money every day."

Zellner, Wendy. "Wooing the Newbies: As the Masses Hit the Net, E-merchants Will Have To Do More Hand-Holding" Business Week, New York, NY: May 15, 2000 (pp. EB116-EB120).

Abstract:

Web shopping is rapidly spreading to the masses. Getting newbies to click the buy button may be a far more complicated and costly proposition than online merchants ever expected. These folks may be averse to surfing new sites, concerned about security, or have less cash for online purchases. E-tailers however, have little choice but to court the new shoppers. Nabbing even a small piece of these new millions of customers may mean the difference between life and death for e-tailers struggling to build revenues. The shift in demographics is sure to force e-merchants to adjust not only how they approach Web buyers but also what they want to sell. With a more diverse group of consumers, online merchants must either become a much broader e-tailer, or stick to a narrow, defendable niche.

Full Text:   (Copyright 2000 The McGraw-Hill Companies, Inc.)

What with plunging stock prices, cash shortages, and massive consolidation, e-tailers have plenty of headaches these days. But one thing should cheer them up: Web shopping is rapidly spreading to the masses. The number of households shopping online will nearly double, to 38 million, in the next two years, predicts market watcher Forrester Research Inc. ``The Internet has reached the least common denominator,'' crows Mark H. Goldstein, president and chief executive of BlueLight.com, a free Internet service provider and shopping site majority-owned by Kmart Corp. ``It's completely mass-market now.''

Even if Goldstein's right, e-tailers' joy may be short-lived. Getting newbies to click the buy button may be a far more complicated and costly proposition than online merchants ever expected. These folks may be averse to surfing new sites, concerned about security, or have less cash for online purchases. For many, just one thing matters, says David Pecaut, senior vice-president of market researcher Boston Consulting Group: "What does this mean to me in my daily life?"

E-tailers, however, have little choice but to court the new shoppers. Nabbing even a small piece of these new millions of customers may mean the difference between life and death for e-tailers struggling to build revenues. ``At the end of the day, this is a business of scale,'' says America Online Inc. President Robert W. Pittman. ``We're more profitable with each incremental subscriber.''

Already, the demographic profile of the Web is expanding beyond the mostly male, high-income, highly educated techies of the Internet frontier. New users over the last year--which BCG dubs ``the first of the masses''--are almost evenly split between men and women. Half have incomes below $50,000, vs. about 35% of the first wave of online users. And 35% have only high school degrees or less, compared with 17% of the Internet pioneers. Research firm Jupiter Communications Inc. figures 42% of the U.S. population will be online by the end of the year, up from 14% in 1996.

Stark choice. That shift is sure to force e-merchants to adjust not only how they approach Web buyers but also what they sell. With a more diverse group of consumers, online merchants must make a stark choice, says Jupiter analyst Ken Cassar: Either become a much broader e-tailer, as Amazon.com is doing, or stick to a narrow, defendable niche.

As women catch up with men in online buying power within the next two years, female-dominated categories such as apparel should become much bigger pieces of the online pie, predicts Cassar. He expects online apparel and accessories to account for less than 1% of the categories' total sales this year, but grow to 4% by 2003.

The new masses may well use the Web differently, too. Research shows that even those who first adopted the Net, the presumed risk-takers, were quick to settle on a limited number of Web sites. ``If early adopters are settling at that pace, imagine what vast Middle America is going to do,'' says John Hagel III, leader of McKinsey & Co.'s e-commerce practice. ``There's a huge imperative to be first to get that person to come to your site.''

Once there, they could get hooked by convenience. David H. Morganlander, a radio advertising salesman in New York City, was simply curious when he got online a year ago, but now can't imagine life without it. He spends a couple hours a day on the Net, using it to buy everything from pizza to flu medicine. Most convenience seekers, however, will spend far less time on the Net, figures McKinsey. A group it calls the ``simplifiers'' uses the Web fewer than seven hours a month and accounts for 29% of active online users--but 50% of transactions. Many belong to dual-income households with children and want to locate, compare, and buy products quickly.

At the same time, with less disposable income, many newcomers are expected to be more price-sensitive than earlier Web shoppers. That's why J.C. Penney Co. is adding a liquidation area to its site. ``The two biggest things our online customers want is price and then price,'' says George Stasick, Penney's director of Net commerce.

Priceline.com believes that it's perfectly positioned to serve the masses with a ``name-your-own-price'' system, which promises to save consumers 20% to 50% on everything from groceries to long-distance telephone service. ``Many of the things on the Internet today are skewed to what I would consider to be just the convenience market or the high-demographic subset,'' says Priceline President Daniel H. Schulman. ``When people can save 20% to 30% on their groceries, don't underestimate how powerful that is.''

Of course, price and convenience won't matter if these customers can't find what they want. ``Navigation and every aspect of how they shop online needs to be significantly simplified,'' says BCG's Pecaut. Increasingly, ``visible'' technology--such as one-click shopping--will be less crucial than ``invisible'' technology, such as a system that alerts a help desk if a consumer appears to be lost on the site, says Forrester research director James McQuivey.

Simplicity. Consider the experience of Debbie Herbst, a 46-year-old hairdresser in Beaver Dam, Wis. She got online in November so she could e-mail her daughter in another part of the state. Since then, she has shopped online--to buy clothing for her 22-year-old son--with his help. When she tried, on her own, to buy a book from Amazon.com--considered one of the easiest sites--``I got mixed up, and it was taking too long.'' Herbst gave up.

While newcomers demand simplicity, serving them won't be simple or cheap. Early Net shoppers were willing to put up with poor service, out-of-stock items, and clumsy return policies, says Jeanne P. Jackson, the new CEO of Wal-Mart.com: ``They wanted to be cool for having shopped online.'' As the Net becomes more mainstream, she says, easy access to customer service, hassle-free returns, and speedy refunds will become more important. Many e-commerce companies have underestimated the cost of this kind of service, says McKinsey's Hagel.

When it comes to the masses, ``click-and-mortar'' retailers such as Wal-Mart and Gap may have a leg up on virtual rivals. By cementing brand loyalty via multiple channels--stores, catalogs, and the Net--they can produce two or three times the annual sales volume per customer of a single channel, figures David C. Court, director of McKinsey's North American marketing practice. That's why Sears, Roebuck & Co. heavily promotes its Web site--which sells tools, appliances, parts, and (soon) consumer electronics—in weekly circulars and TV ads. Says Dennis J. Honan, vice-president of Sears Online: ``More and more of our customers are using the Internet as a research tool and then coming into our stores to purchase.''

Moreover, the next wave of Internet users likely will favor the traditional brands. ``Established store retailers have huge opportunities,'' says Andy Johnson, president of e-commerce at cataloger Fingerhut Cos. ``They have first shot at the customers.'' If e-merchants thought the battle for customers was tough before, just wait until they face a real mass market.

The Net crowd is looking a lot more like every other crowd these days in terms of gender, income, and education.

A glance at the early Netizens, who've been online for three years or more, vs. the newbies shows a shift toward what is more in keeping with the mass population. E-tailers need to watch these changing demographics carefully if they hope to survive.

Littman, Margaret. "How Marketers Track Underage Consumers" Marketing News, Chicago, IL: May 8, 2000 (p. 4 & 7).

Abstract:

Marketers increasingly are using Web sites aimed at the so-called Generation Y market (generally teenagers) to collect information as much as sell goods - staying within federal privacy guidelines, but also counting on parents' inattention to how their kids are surfing the Web. And they often are focusing on collecting more general information on trends rather than specific addresses.

Full Text:   (Copyright American Marketing Association May 8, 2000)

The advent of the Internet as a widely used communications vehicle is doing more than lower costs for the direct mail and database marketing industries. The shift in preference from epistles to e-mail among younger consumers has wide-ranging consequences. But at the same time that marketers are trying to collect information on these up-and-coming target markets, concerns about underage Web surfers' privacy loom large for parents and for the federal government.

Marketers increasingly are using Web sites aimed at the so-called Generation Y market (generally teen-agers) to collect information as much as sell goods-staying within federal privacy guidelines, but also counting on parents' inattention to how their kids are surfing the Web. And they often are focusing on collecting more general information on trends rather than specific addresses.

According to New York based Jupiter Communications Inc., two-thirds of teens already have researched or bought products online, and the Internet research firm predicts by 2002, $1.2 billion of all e-commerce dollars spent will come from the pockets of underage shoppers. (See "Today's game is keep-away," July 5, page 1.)

The need to collect information on this market is irresistible. To that end, for example, Kibu.com, operated by Redwood City, Calif.-based Kibu Inc., plans this month to launch a Web site targeted toward the 12.5 million girls in the United States between the ages of 13 and 18-with a twist: It will be one of the first Web sites to offer the subscription-- style, reward-for-information model so popular with adults, for the under-18 set ("News Roundup," March 27, page 25).

Kibu.com "complies with Federal Trade Commission [regulations] which require Web sites to post privacy policies and to obtain parental consent before collecting personal information from children under age 13. Kibu will not knowingly collect any personal information from or allow the registration of girls under the age of 13," according to a message posted on the site from Kibu CEO Judy MacDonald. Kibu executives, however, were not available for further comment.

Despite such assurances, the Jupiter study revealed that parental concern regarding advertising to kids more than doubled between 1998, when 17% of parents registered concern, and 1999, when 45% of parents did.

Nevertheless, few marketers or industry experts think parents are monitoring their kids' Web site use that carefully. Parents may have blocked out pornographic and other adult content and may keep tabs on credit card purchases, but in terms of watching their kids surf and helping their children decide when to provide personal information to a company parents are more than a click away.

"In the past, parents had greater awareness. They had access to the malls. They could see what teen-agers were being exposed to. But the Internet is different. Parents are not bothering to go to Internet sites," says David Schumann, a professor of marketing and associate dean for the College of Business at the University of Tennessee in Knoxville, who specializes in marketing to children and teens.

Schumann notes that while parents are less and less cognizant of how their teens interact with the Web, the number of marketers using Web sites to collect information on Generation Y is increasing. New York based Delia's Inc., a popular teen mail-order clothing catalog and Web site, has a database of more than 9 million names and collects another 100,000 every month. Delia's is affiliated with iTurf.com, a teen content site, and Schumann says having that other outlet is an additional way for the firm to get names for its direct mail list. iTurf.com gets 800,000 impressions per month, he says. (Delia's and iTurf executives weren't available for comment.)

While parents may be concerned about the information databases marketers are compiling on their kids, Schumann and other experts say marketers worry their messages will be ignored by these young but extremely ad-savvy consumers. Few baby boomers or even Gen X'ers remember getting junk mail as a teen-and certainly there was no junk email-but Generation Y has grown up ever-- exposed to messages from marketers. Research from the nonprofit Takoma Park, Md.-based Center for a New American Dream found that kids process ads as early as 3 years old and are increasingly exposed to advertising in schools, libraries and other formerly noncommercial venues.

"This generation grew up at the feet of (the) most consumerist generation in history," says Dick Nye, cofounder of U30 Group, a Knoxville, Tenn.-based youth research firm. "They know how to shop, how to use credit cards. They are seasoned shoppers, and their parents have given them more and more responsibility, more leeway in spending the family dollars."

Because of that, some Web sites are compiling information not for direct-mail databases, but for trend data on what these kids want, depositing in the database not addresses, but such information as the kinds of products they'd like to see, the hobbies they're involved in and the types of features they'd like to see on the site. For example, New York-based www.edu.com, a Web site where registered college students can buy items online with a student discount, gets personal information on all its users; it even calls the schools to make sure the kids are enrolled. The company then passes that information on to its partners—computer makers such as Cupertino, Calif.-based Apple Computer Inc. and Armonk, N.Y.-based International Business Machines Inc., and credit card issuers such as AT&T Corp. and Citibank, both in New York-in exchange for the right to sell those companies' products at a discount.

"We don't sell names or any specific individual information on students," explains Linda Kanner, chief marketing officer for the firm. The group data, however, allows marketers to tailor their products for college kids. Kanner believes even if that individual information was sold to marketers, it wouldn't do them much good if used as a direct-mail database. "The attitude of college students is clear about this: If you go to the mailroom on a college campus, all the junk mail is on the floor. They just look for personal mail. Sending that out is a real waste of time and energy."

Nye agrees. "There is a significant difference between the two generations (baby boomers and Gen Y. Baby boomers still communicated by mail; this generation is electronic. The traditional means of database marketing are up against that trend," he says. "My children don't even check the mail when they get home."

(Author Note:    Margaret Littman is a Chicago-based free-Lance writer.)

Raymond, Joan. "The Joy of Empty Nesting" American Demographics, Ithaca, NY: May 2000 (p. 48-54).

Abstract:

By some estimates, 30% of the US' 78 million baby boomers are - or are about to become - empty nesters this year. The rest will enter this phase over the next decade; somewhere in America, 7 boomers will turn 50 every minute from now until 2014. Yet many marketers are ill-prepared to reach this new class of empty nester - consumers who have more money to spend than their parents' generation. Besides making more money, empty-nest boomers will be looking for places to spend it. Finance, travel and home remodeling are only some of the sectors that are likely to benefit from the boomers' aging process. Those who want to be successful at marketing to this group should recognize its need for value.

Full Text:   (Copyright PRIMEDIA Intertec May 2000)

Somewhere in America, seven baby boomers will turn 50 every minute from now until 2014. Marketers' most important customers are these newly liberated parents.

Don't call Chris Klepeis "a woman of a certain age." Or, heaven forbid, a senior. If you do, chances are the 52-year-old from Smithtown, New York, might become a little ballistic. Although some marketers may rank Klepeis among the delicately phrased "mature" cohort, she doesn't consider herself "a geezer," "a fogey," or even all that mature. Rather, this human resources exec, who recently moved jobs to a dot-com, says she's in better shape now-physically, mentally, and financially-- than a decade ago. Ever since their only daughter, Jill, graduated from college and moved out on her own seven years ago, the Klepeises have added about $15,000 a year to their discretionary funds. And the couple isn't shy about spending that money on life's little luxuries. On weekends, after logging in 10- to 12-hour workdays, Klepeis and her husband, Richie, a 55-year-old master printer, may hop on their motorcycles (fully loaded BMWs, with BMW clothing accessories, of course) for a road trip. Or they may go out to dinner, an activity they indulge in as often as three times a week. If they want a cozy night at home, the Klepeises settle into their home theater, just one of the perks of the estimated $40,000 the couple has spent on remodeling the house in recent years. "I'm not my mother's 52," Klepeis says. "I'm not in the second half of my life. I'm in the first chapter of a brand new book."

Welcome to the golden age for the Age of Aquarius. By some estimates, 30 percent of the nation's 78 million baby boomers are-or are about to become-empty nesters this year. The rest will enter this phase over the next decade; somewhere in America, seven boomers will turn 50 every minute from now until 2014. Yet many marketers are ill-prepared to reach this new class of empty nester-- consumers who have more money to spend than their parents' generation. "Empty nesters today are affluent, and they are disproportionately represented among most retailers' customer bases," says Sandra Gudat, president of Denver-based Customer Communications Group, which designs relationship marketing programs for companies. "It's typical for a company to say the average customer is 40 years old, has two kids, and makes $40,000 a year. Once you drill down and look at the customer base, it's illuminating. Their most important customers are the empty nesters."

This generation isn't the first to see its discretionary income rise when the kids are grown and out of the house. The median household income of married couples without children at home has grown 25 percent since 1974, after adjusting for inflation, according to American Incomes: Demographics of Who Has Money (New Strategist Publications, 3rd edition). Historically, previous generations have squirreled away that money for retirement. But by all accounts, boomers will have more money and use it differently than their predecessors-even if some of their kids end up moving back home. That's because this group is expected to stay in the workforce longer. They may "retire" from a particular profession when the children are grown, but they're unlikely to give up work completely. These income trends will only intensify in the coming years, according to Age Wave IMPACT of Emeryville, California. About 84.5 percent of the empty-nest parents the company surveyed experienced a boost in discretionary income when the kids left home; more than one-third reported a rise of $ 10,000 or more.

But few marketers have figured out how to best target the new empty-nest boomer. Perhaps that's because trying to neatly define the boomer's empty-nest psyche is proving as vexing as trying to discern the messages hidden in the Beatles White Album. While one empty nester might be gearing up to test his or her entrepreneurial spirit by starting a business, others might be taking early retirement, thanks to some wisely planned investments. Still others, like Chris Klepeis, a former airline executive, have changed careers and plan to work well past the traditional retirement age. Marketing products to this tie-dye mix of consumers may prove challenging. But ignoring this market may prove even more costly. Says Bill Burkart, CEO of Age Wave: "The empty-nester boomer represents a real marketing opportunity."

Scudder Investment Services Inc. is one company that recognized the potential of empty nesters early. Now it's poised for high growth as boomers enter this stage of life. The financial services firm, in association with the AARP, in 1986 created an investment portfolio geared to the over-50 market. Last year, Scudder surveyed 5,000 boomers and found that 69 percent felt their financial situation will be even better in five years. According to the survey, more boomers (82 percent) feared that they would have deteriorating physical health than not have enough money (66 percent).

But the real change in the maturing population is their will to keep on working: According to Scudder's survey, 53 percent see retirement as an opportunity to dabble in a new career. "That was our wake-up call," says Laura Trumble, a Scudder spokeswoman. "These people don't want to agonize about investing. All the research shows they want to travel and have fun." Adds Marilyn Capelli Dimitroff, a boomer and president of Capelli Financial Services Inc. in Bloomfield, Michigan: "The boomers as a whole, and the empty nesters as a subset, will continue to set trends for the rest of the population."

Besides making more money, empty-nest boomers will be looking for places to spend it. Finance, travel, and home remodeling are only some of the sectors that are likely to benefit from the boomers' aging process. Those who want to be successful at marketing to this group should recognize its need for value, says Communications Group's Gudat, who helps design marketing programs that reward "best customers" with special services such as pre-sale notices, special shopping hours, newsletters, and handwritten thank-you notes. The typical results: sales increases ranging from 8 percent to 15 percent, says Gudat, who has created relationship marketing programs for companies such as Pier I Imports and Macy's. "Some companies have just begun to realize that empty nesters represent a disproportionate amount of their profits," she says.

Take Mary and Jim Parsons of Wadsworth, Ohio. The couple's daughter, Tangee, graduated from college last year. Since then, the Wadsworths have added about $15,000 a year to their discretionary income, Mary, a hospital marketing executive, and Jim, a rep for a tool-and-die company, so far have invested the money. But they're not opposed to spending it on travel and other luxuries, Mary says. Their first big-ticket purchase is likely to be a new condo, with all the maintenance-free perks that come with luxury living. "I'm basically going to be looking at a mortgage as large as the house I'm selling," she says. "But, oh well."

That "oh well" factor is what all industries, including the housing and remodeling market, can count on. Last year's $135 billion home improvement market is likely to grow to $150 billion by the end of the year, thanks partly to boomers' propensity for comfortable and maintenance-free homes, according to the National Association of the Remodeling Industry (NARI). During 1996 and 1997, 47 percent of the 2.8 million new homes built in the United States were purchased by baby boomers.

Cynthia Latta, chief U.S. economist for Standard & Poor's DRI, a division of McGraw-Hill, expects the trend to continue for at least the next five years. "This is a move-up market," Latta says. "Even in previous generations, after the children left, parents got bigger or nicer homes. They're not inclined to buy down."

Spotting a demographic shift is just the first step in eventually profiting from it. Although these empty nesters are the least homogenous of any cohort, there are certain factors that help define who they are and what they want, explains Jock Bickert, president and chief executive of Denver-based marketing research firm, Looking Glass. His recommendation for an effective marketing strategy: "Don't talk down to these people," says Bickert, who believes the generational stereotype of the "sweet, saccharine older couple" is the kiss of death for marketers who want to tap the empty-nester market. "Although empty nesters are all over the map in terms of what they want, the common factor is these people aren't getting older no matter what the calendar says. Empty nesters and boomers will be young forever."

Allergan, Inc., a $1.5 billion pharmaceutical company, is focusing some of its efforts on helping aging boomers stay youthful. The company already manufacturers Botox, a drug plastic surgeons and dermatologists use to minimize wrinkles. Last year, sales topped $175 million from $12.6 million just eight years ago. In 1995, the company launched a line of over-the-counter skin care products called MD Forte. Priced higher than traditional drugstore brands, MD Forte is exclusively sold through doctors' offices-an important component for this demographic. "Baby boomers are the drivers," says Chris Dax, director of marketing for Allergan's skin care line. "They want the latest, greatest, most technologically advanced ingredients. But most of all, they want something that works. This is an educated cohort who wants value for their dollar."

Aside from being well educated and increasingly well preserved, empty nesters are becoming more techno-savvy, especially the affluent 45-to-54-year-olds with annual incomes of $50,000 and up. The youngest and the most affluent empty nesters, according to Bickert, will continue to use online capabilities for everything from the drudgery of e-mail to the high-stakes game of investing. Most of these empty nesters will also use the Net for shopping, information, and news-gathering research on financial markets, general education, medical services, and health and wellness information. "Two or three years ago, if you were over 30 you just didn't get the Internet," says Bickert. "Now everybody is on the Net, and the people who have embraced the technology are the middle-aged." Bickert expects the love affair to continue for one simple reason: "Empty nesters don't want to be bothered with the mundane. The Net simplifies their lives, so they can go on about the business of living."

Steak and Ale Restaurants recently realized it could grow its business by feasting on the aging boomer market. For now, fewer than 20 percent of the Dallas-based company's customers are true empty nesters. But they represent a far greater share of sales volume, says Bill Watson, vice president of marketing. "Frankly, it's going to require us to continue to reshape the proposition and image of our brand," he says. "We need to catch this next wave."

Reshaping the brand means that Watson and company are creating new offerings, like the nine-pepper filet and other exotic sauces to pique the taste buds of the 45-plus crowd. But food, says Watson, is just one part of the equation. With large disposable incomes and many choices in dining experiences, Steak and Ale wants to create an atmosphere, too. According to the National Restaurant Association (NRA), per capita households consisting of only a husband and wife spent the most amount of money 0981) on food-65 percent higher than the $596 per capita expenditures of couples with children. And the NRA expects that to continue in the near future. "The reasons we've seen baby boomers eat out more often than most other age groups is due to convenience and the exploding economy," says Michael Mount, NRA spokesperson. "People are making more money and are not as worried about the costs of dining out."

They're not worried about the cost of travel, either. According to the Travel Industry Association of America (TIA), one-half of all U.S. adults (nearly 98 million) took an adventure vacation within the past five years. Some 56 percent of these travelers were boomers. The TIA projects the rate of travel by Americans will rise 7 percent by 2002, fueled largely by the boomers. Says TIA spokesperson, Cathy Keefe: "Boomers are important to the travel industry because, along with the current rock-solid economy, many will continue to have much higher discretionary income due to solid financial retirement plans, increased individual investing, and the rise in stock options. With many planning early retirement, they'll have more time to travel."

You don't need to tell that to Kerry Touloumis. As supervisor of TravLtips, a travel organization based in Flushing, New York, he's already begun to see a shift in the kind of trips people want. About half of the group's 40,000 members are baby boomers, including empty nesters who are "sick and tired" of cruise ships. Instead, they're looking for "the great adventure."

To help fill the bill, Touloumis is booking vacations on working freighters cargo ships that go to exotic ports-of call and provide clients with a thrill a minute. "The passengers love it," says Touloumis. "They get to go to such cool places. We're not getting the calls for the seven-day trips to Mexico. We're getting boomers who want the 21-day trip to Fiji or Australia."

The cool factor is also helping to drive the business of Harley Davidson, especially among the boomer cohort. Buyers of the "king of the road" have a median age of 44.6 years old (91 percent are male, 9 percent female), with a household income of $73,800. "A lot of our buyers are baby boomers, and of that segment a lot are empty nesters," says Paul James, director of communications for Harley Davidson. "Some owned motorcycles in the past and got rid of them because of family duties. Now they're coming into the Fold." It's the Harley mystique, says James, that's luring these buyers. "It's about the open road, the camaraderie, the individualism," he says. And it doesn't hurt that there are bunches of Harley accessories, too, that can set your Hog apart from everybody else's motorcycle. "If they want to be the Terminator, they can be the Terminator. If they want Easy Rider, we can do that, too," says James. At a price that's affordable and value-driven. Boomers want individualism and freedom, notes James, but they're "too savvy" to throw money away.

There's no doubt that empty nesters and marketers are at the early stages of what promises to be a long-term and lucrative love affair. just as boomers have transformed every other stage of their lives, they'll do the same in this new phase. Smart marketers can bet on one ubiquitous theme: Now that the kids are away, the empty nesters are going to play.

(Author Note:    Joan Raymond is a freelance writer whose articles have appeared in Newsweek and The Plain Dealer Sunday Magazine. )

Song, Juan A. "The N-generation" Far Eastern Economic Review, Hong Kong: April 20, 2000 (p. 46).

Abstract:

These days in Seoul it is unusual to find teenagers who do not have several e-mail accounts and a mobile phone. Youngsters in their late teens to early 20s are called the N-generation, or Net-generation. They grow up interacting with the Web and view new technology as an integral part of their lives. They are creating a whole new culture that has profound implications for business and politics in Korea.

Full Text:   (Copyright Dow Jones & Company Inc April 20, 2000)

Young people are taking to the Internet in droves to create a whole new world in business and politics

Lim Soon Suk, a 16-year-old Seoul high school boy, couldn't believe his luck when he was hired by Unitel, the second largest Internet service provider in Korea. The company offered him a year's scholarship as well as an MP3 music player and high-speed Internet access in return for his advice about the Internet company's new services. It all seemed too good to be true for this young tech-savvy student, who enjoys surfing the Net and creating computer graphics.

Lim started using computers in the fifth grade, and since then the Internet has considerably changed the way he thinks and acts. Every day, he receives dozens of e-mails and text messages through his mobile phone, mostly from his classmates. After school, he spends hours chatting in cyberspace or playing Internet games. "I can't imagine my life without a computer and a mobile phone," he grins. "It would be really inconvenient."

These days in Seoul it is unusual to find teenagers who don’t have several e-mail accounts and a mobile phone. According to a survey by the Korea Institute for Youth Development, go/ of teenagers nationwide use computers, and half of these are Internet users.

Youngsters in their late teens to early 20's are called the "N-generation," or Net-- generation. They grow up interacting with the Web and view new technology as an integral part of their lives, notes Hwang Jin Koo, a senior researcher at the institute. They are creating a whole new culture that has profound implications for business and politics in Korea.

Telecoms and Internet companies are striving to attract young customers with splendid ads and new brands. Take SK Telecom, for example, the nations largest mobile-phone service provider. With its new TTL brand targeting teenagers, it has expanded its subscriber base to z million teenagers or 20% of overall subscribers last year, up from 8% the previous year.

Big conglomerates are also scrambling to learn the new generations culture and way of thinking. Executives at the conglomerates have to understand this generation, or lose many of their young and talented recruits to venture-capital companies and Internet start-ups.

For instance, Jung Jin Hyuk, a 22-yearold computer-engineering major from the elite Seoul National University, surprised people by choosing to work at a small venture-capital firm in February. His job is to evaluate the growth potential of hi-tech start-ups for future investment. "I want to do something I like. Here, I can make the best use of my ability, which would be hard in big organizations," he says.

Such ideas affect the corporate culture and style of personnel management at conglomerates, notes Gong Byeong Ho, a former president of the Centre for Free Enterprise, a private think-tank in Seoul. Such aspirations for a free work environment are shaking up the bureaucracy in big organizations, he says.

The N-generation is also changing the political landscape by on-line participation in a recent civic movement to keep corrupt politicians out of elections. Chong Kyu Hwan, a 27-year-old entrepreneur who runs a Web site for such movements, says he was surprised at the explosive reaction from young "Netizens." "They are not as indifferent to politics as some people might think," he says.

Both ruling and opposition parties are striving to win over the N-generation online. The ruling Millennium Democratic Party has set up an Internet broadcasting system to publicize its policies, while the opposition Grand National Party has recruited three students as its cyber-spokesmen to interact with young voters.

One of these cyber-spokesmen is Chang Joo Yong, a 21-year-old student at Korea University in Seoul. "Now we are not just being passively broadcast to," he says. "Instead, we voice our opinion on the Net and get some feedback. It's a big step in the direction of political development."

Anonymous. "Study Shows Shift in Populations" News for You, Syracuse, NY: April 12, 2000 (p. 2).

Abstract:

According to a study of US population trends, the ethnic makeup in the US cities is changing. The study also shows that aging baby boomers are leaving the big coastal cities for small and medium-sized cities located in the South and the West.

Clark, Kim; Shute, Nancy & Kelly, Katy. "The New Midlife: As the Biggest Class of Boomers Hits 40, It is Redefining Middle Age and Reshaping the Nation" U.S. News & World Report, Washington, DC: March 20, 2000 (pp. 70-83).

Abstract:

This year, 4.7 million Americans--more than ever before and more than in the foreseeable future--will celebrate their 40th birthday. Clark takes a look at where these 40-year-olds stand in health, home life and work.

Full Text:   (Copyright U.S. News and World Report March 20, 2000)

It's an epidemic: Every 6.8 seconds, another pair of eyes start to strain; another baby boomer starts hearing an internal voice wondering if his boss or spouse might want someone younger. This year, 4.7 million Americans--more than ever before and more than in the foreseeable future--will "celebrate" their 40^th birthday.

The cresting of this demographic wave will have strange and wonderful implications for Americans of all ages. It will help create a stronger economy, a more stable society, and even comfier pants. The reality for the new 40-somethings, however, is bittersweet. They are healthier, better educated, and have more opportunities than previous middle-agers. But they are also more financially insecure than their parents or older siblings were at this stage. The boomers have resisted growing up more than any previous generation; they've had kids later and cosmetic surgery sooner. As a result, today's 40s are facing an unprecedented time crunch. They are working harder at their jobs, rushing home to care for younger children and older parents, and still trying to squeeze in a little age-defying exercise. "I feel," says Patricia Eisemann, a 45-year-old mother of two and a vice president of Scribner books, "like I'm duct-taped to a merry-go-round."

More Americans are jumping on that carousel than ever before, reshaping society. Forty-somethings take over as the biggest age group with 42.5 million members, or 15.4 percent of the population. They are throwing around more cash; this year, they'll spend more than $1 trillion. Economists say that because 40-year- olds tend to be productive workers and good savers, the benefits will be higher productivity, lower inflation, and a robust stock market.

The new 40s are also changing the nation in a thousand smaller ways. How are the fashion houses adapting to the growth of the harried, slightly overweight 40-something population? In three ways, says Denise Seegal, president of Liz Claiborne: carefree (read wash- and-wear) fabrics, lots of slimming black, and "stretch, a key part of comfort and key to our development."

Yet for the 40s themselves, the prospects are mixed. The fact is, says cultural historian Jackson Lears, that today's 40-year-olds join a game in which "the ante has never been higher." While their parents had little choice but to age gracefully, the new 40s are popping pills and taking shots to lower cholesterol and raise libido. Of course, in this war, victory is only a delay. The stress has intensified at home, too, where 40-year-olds today are far more likely to have a newborn than their parents were at this age. They are also more likely to be caring for aging parents. Yet the typical caregivers--women--have less time to spend at home as they are clocking more hours on the job.

The stakes are higher there, too. Growth in the number of stable middle-aged workers is fueling the productivity and investment booms. Yet the very number of late boomers led to a labor glut that depressed wages for much of their careers. So while the economy is creating a record number of 40-ish millionaires, today's middle-agers are five times as likely to be laid off as their parents were.

The end wave of boomers are about to face an eternal truth: The life that begins at 40 is, in many ways, harder. But there is a payoff: People in their 50s say they're happier.

Health

Accept the bifocals, but work off that potbelly

In his 20s, John Houck had a dream job, demonstrating Dwork rollovers, flamingos, and other freestyle Frisbee moves at schools and shopping malls. Then he started a business, and life in his 30s was all work and no play--even though the business included running a 36-hole Frisbee golf course in Wimberley, Texas. He knew his fajita- filled diet wasn't great, so when the doctor told him last September- -as he approached 40--that his cholesterol was an unhealthily high 217, "I wasn't totally surprised," says Houck. He had reached middle age.

Most people first realize that they're not so young anymore when they hit their 40s. The belly laps over the belt, knees creak, and hair shades to gray. Vision becomes less acute, strength is sapped, and it's harder to remember names. The sad reality is that this isn't the start of aging. The physical decline begins much earlier, often in the 20s. Even more depressing is that these changes are normal.

But there's plenty of good news about turning 40 now. Today's 40- year-olds are much healthier than their parents were at the same age. Deaths from heart disease in the 35-to-44 age group have dropped by more than 50 percent since the 1970s; cancer deaths, by one third. Forty-year-olds are much less likely to have high blood pressure and are less likely to smoke and drink. Doctors say that if today's 40- year-olds exercise and eat right, they'll minimize aging's toll and be hale and happy for decades.

For many people, the first intimation of mortality comes at the eye doctor's. "They come in complaining of nebulous things," says David Hays, a Tacoma, Wash., optometrist. "When I tell them the answer is bifocals, they're not too sure," adds the 41-year-old Hays, who must wear bifocals himself. Many ignore the prescription until menus become indecipherable.

A kindergartner can hold a penny right up to his nose and focus on it because the lenses in his eyes are so flexible. But over time, the lenses stiffen as cells build up in them. "There's a steady decay in lens power," says Rick Ferris of the National Eye Institute.

Alas, science offers no cure aside from reading glasses or bifocals. Laser eye surgery can't restore the lenses' flexibility. In fact, nearsighted 30-year-olds who have embraced laser surgery in order to throw out their glasses won't be without them for long. By getting rid of their nearsightedness, they've also guaranteed that they'll later need reading glasses.

Bifocals may be the most obvious harbinger of aging, but other, more subtle signs have larger significance. Starting in the 20s, the body's ability to use oxygen to power physical activity drops by about 1 percent a year. Muscles begin to lose mass, and the body's metabolic rate slows. In the 30s, adrenal hormone and estrogen levels start creeping downward. Scientists don't know what sets off these physical changes, but their effects are depressingly predictable: A typical 45-year-old has a lot less strength and endurance than a typical 25-year-old.

Much the same thing happens in the brain. The declines are most obvious in processing speed, which decreases by about 1 percent a year from age 25 on. The ability to cope with novel information deteriorates, too, by about half a percent a year. That probably stems from changes in the brain, including loss of neurons and a reduction in neurotransmitting chemicals.

My keys? My keys? The result is that typical 45-year-olds take a little longer to remember someone's name or where they put the car keys. Fortunately, says Ronald Petersen, a neurologist who directs the Mayo Clinic's Alzheimer's Disease Research Center, "in a normal person, the machinery still works." Alzheimer's is exceedingly rare in the 40s and 50s, he says. Persistent cognitive problems in a 40- something are almost always the result of a treatable problem: depression, side effects of medication, or drinking too much. Thus, it's worth seeing a doctor if thinking gets muddled.

For most 40-year-olds, focusing on the task at hand can help make up for any lost edge; so can cutting back on multitasking--talking on the phone while surfing the Web while paying bills, say. "As we get older, we keep fewer balls in the air successfully," says Petersen. What was once called wisdom can also help 40-somethings to compensate. Says Timothy Salthouse, a Georgia Institute of Technology psychology professor and a leading researcher of processing speed: "Most people are not doing abstract-type things. They're doing things in the context of experience, and experience increases with age."

Steadiness and discipline, two blessings of maturity, also help in coping with the physiology of the 40s. That's been the case for Cathy Morgan. After an athletic youth, she gained 30 pounds by spending her days at a stressful San Francisco law firm and nights out with friends. Last August, one month after her 40th birthday, she signed up for an Ironman triathlon. "I also do karate and kickboxing and can regularly beat 20-year-olds," she brags. The weight doesn't come off like it did at 25, but Morgan says she has never felt better.

Such dedication can slow the clock. "You can reverse age-related declines on a short-term basis, even into your 80s," says Jerome Fleg, a cardiologist with the Baltimore Longitudinal Study of Aging. Although declines in strength and endurance continue, by getting fit a person can gain the muscle tone and cardiovascular capacity typical of someone 10 to 20 years younger. Regular exercise--the surgeon general recommends 30 minutes of moderate activity a day--also lowers blood pressure and cholesterol and fights weight gain and bone loss. It can have psychological benefits, too, such as preventing depression. Nancy Karabaic, who turned 40 last July, believes her daily one-hour workouts--including a run three days before she gave birth to her son last year--raised her tolerance for pain during natural childbirth. Her 26 hours of labor "hurt a little, but it was great," she says.

Too few follow that advice; most people work out less as they age. But John Houck's a believer. After getting the bad news about his cholesterol, he dropped his fajitas habit. "No more cinnamon rolls or ice cream. No fried chicken or sausage." He also plays Ultimate Frisbee twice a week. In three months, he lost 12 pounds, and his cholesterol dropped to 180. "I realized I needed to make a change, and I did it," says Houck.

Home

Juggling work and kids and stress: Now you're really a grown-up

The 40s. Conventional kvetching says it's when dreams die and reality bites. But really, how dreadful is this plunge from the flirty 30s to the dreary 40s?

You have a lot to cope with--probably more than your parents did at the same age. But you've also got more choices about how to live your life. That's the paradox of turning 40 in 2000.

"People get confronted with more profound and substantial life challenges in their 40s than in any other period in their life," says Ken Dychtwald, boomer guru and author of Age Power. These challenges, he says, are greater than ever.

For many, the stresses are huge. Weekly work hours for women jumped from 18 in 1975 to 28 in 1995. "So now you have the husband and wife simultaneously freaking out about their careers," says Dychtwald. Nearly one of seven 40-somethings is divorced, double the rate of 1975. People in their 40s are also setting records for remarriage and blended families, says Phil Goodman of Generation Transitional Marketing. Some have kids in college and babies in diapers. Some are juggling custody schedules while others are rearranging empty nests. Add their own aging parents to the mix, and today's 40-year-old faces the extreme-sports version of middle age.

As women work longer hours, men have more responsibilities--and stress--at home. Men in their 40s are spending almost four more hours a week doing housework than they were two decades earlier, as women do eight hours less a week, says sociologist John Robinson. Both sexes are making sacrifices. Men are spending less time eating, sleeping, and reading. Women have cut back on hobbies, visiting, and grooming.

Yet there are perks. "In your 40s, you become more sure of yourself," says Rob Forbes, 42, a Bay Shore, N.Y., businessman and divorced father of Kylie, 10. "I'm calmer, more flexible, more understanding and sympathetic to other people."

For many, the 40s are when they really grow up. "In midlife, people are in the highest gear they'll probably ever be in," says Carol Ryff, professor of psychology at the University of Wisconsin- Madison and director of the Institute on Aging. "You're responsible for all of it."

It is an era touched by heart attacks and heartaches. But it is also a time of personal growth. Just ask Ed Zwick, who enshrined the image of the whining yuppie as producer of the 1987-91 hit thirty-something and is again chronicling the baby boom generation with ABC's new Once and Again, a drama that explores just about all the big issues a 40-something is likely to face.

"People in their 40s have a more realistic assessment of their lives," says Zwick, 47. "The 40-something heart--I'd like to think-- is both more bruised and more open. It has accumulated a certain number of wounds. Those wounds define us, not necessarily for the worse."

And sometimes even for the better. "This is an age where you're fulfilling a lot of commitments to yourself and others," adds David Morgan, a 49-year-old Portland State (Ore.) University professor who has studied boomers. "That can be very demanding, and it can be very rewarding. I hear a lot of people say they are pretty proud of who they are now, compared to the person they were in their 20s."

They're also tired. "You can't really pull the all-nighters anymore," says Donna Wagner, director of the gerontology program at Towson University in Maryland. That's "the first sign that [the] body is not cooperating with the spirit." With the physical decline comes what she calls the "big mortality shock. In your 40s you see your first deaths of friends or siblings."

Brownies. How do you flourish at 40? Ample sleep, exercise, and a healthy dose of realism. Tricia Mosher, who will be 40 in July, remembers watching a TV commercial decades ago that promised a have- it-all lifestyle. A woman sang, "I can bring home the bacon, fry it up in a pan, and never, ever let you forget you're a man." Mosher, who like her husband, Doug, 33, is a social worker in Falmouth, Maine, is mother of Rebeckah, 7, Jacob, 3 1/2, and Hannah, 2 1/2 months. She now realizes that "I can have a lot of it--most of it--but I'm probably not going to have it all." The fun stuff "has to fit into the evenings and weekend," she says. "What might have seemed like relaxation 30 years ago is now connected to Brownies. We read because we have to do a book report."

Stressed? Sure, but "We have lived a lot," says Mosher of her pre- parenthood years. "We won't sit around and say, `Gee, we never got to travel or be young and single or live in an apartment.' "

For many, being content at home is a part of the 40s package. Eisemann, the Scribner executive, cherishes her time with her family. "Why do I want to go to France to look at Le Gap over there?" she says. Perhaps sentiments like these are the reason that the moving rate continues to drop steadily among households headed by people in their 40s.

At 48, Tish Niehans is comfortable with her choices. "I'm realizing I'm not going to be a Sandra Day O'Connor or a [Hewlett- Packard President] Carly Fiorina," says Niehans, a Menlo Park, Calif., lawyer who has spent most of her time as a stay-at-home mom. "I'm now realizing that life is not infinite, but I have no regrets. " A "big part" of her joy is her 20-year marriage to her husband, Dan.

She gained some of this wisdom as many do in their 40s--after facing adversity. She was diagnosed with breast cancer at 40--when her daughter, Christi, now 17, was in the fourth grade--and her own mother died when Niehans was 46. Now, Niehans is "thriving."Among the lessons she has learned: "Enjoy being alive, and be grateful for what you've got."

But the second paradox of being 40 is that though satisfied, in the best baby boomer tradition, many yearn for more. "I'm looking forward to doing something big for myself," Niehans says. "I don't know what it will be, but it will be great."

And if it's not? "I'll try something else."

Work

Sock it away while you can; job risks rise with each birthday

An aching back, gray hair, and turning 40--that's about all typical baby boomers think they have in common with baseball ironman and multimillionaire Cal Ripken Jr. They're wrong. Just like Cal, who turns 40 in August, they've got to worry that management might be thinking about replacing them with someone younger, says Ron Shapiro, Ripken's agent. "From the CEO to the sales manager," he says, "they are burning out and being turned out" earlier than ever.

In many ways, workers in their 40s today have it great. They are healthier, better educated, and benefiting from a stronger job market than any previous generation. The booming economy and stock market are minting about 40,000 new millionaires a month, according to the Spectrem Group. But the risks are rising along with the rewards. The spread of technology and American culture's infatuation with youth are creating a job market that increasingly rewards flexibility and speed over age and experience. And if that weren't bad enough, these career threats arise in an era when middle-aged workers will have to work longer and earn more than their parents did to retire in comfort.

This job vulnerability often comes as a shock to 40-somethings who feel that they are at the top of their game. At 46, Frank N. Rodriguez Sr., a Houston machinist, thought he wouldn't have a problem finding a new job after a labor dispute threw him out of work. But even when he outscored them in tests, younger workers got the new jobs. "You can call it naive," Rodriguez says, "but I never dreamed age would be held against me." Though he's earning more than ever, at a new job at a silicon wafer plant, he's worrying more, too. "What do I think about my 50s? They're scary."

But Ripken may be a role model for mere mortals. Even though he continues to make a good living as a ballplayer, for the past several years he has been spending his off-seasons running baseball fantasy camps and investing in minor-league teams. "He's prepared for the next step," Shapiro says.

Age can hurt. Of course, the mere act of blowing out 40 candles shouldn't dim one's career prospects. Most of us aren't trying to hit 98-mph fastballs. Yet a growing number of employers believe experience is a handicap when they're trying to make or do something brand new. "It is sort of like the Army. You don't hire 40-year-olds to charge a machine gun. They're too smart to do that," explained one high-tech CEO. Seniority, which once protected job security, has become the career equivalent of a laser dot on the forehead. A study conducted by an economist at the San Francisco branch of the Federal Reserve found middle-aged men in the 1990s were five times as likely to be laid off as their fathers were in the 1970s.

And judges have become increasingly hostile to age discrimination suits. A study by Richard Posner, chief judge of the U.S. Court of Appeals for the Seventh Circuit, found that employers won 89 percent of all the age discrimination claims in the mid-1990s. That's as it should be, says Posner, one of the nation's most influential judges. His 1995 book Aging and Old Age argues that employers should be allowed to make employment decisions based on age because research shows that after 45 or so, most workers become less productive, he says. (Except, writes the 61-year-old, for federal judges.)

He's partly right; there is plenty of evidence that, for example, older workers learn new skills more slowly and are more reticent to adopt new technologies. But other studies find that job performance rises with experience, especially in the first five years. One of the biggest analyses to date found there is a tiny, but positive, relationship between age and work quality.

Still, stereotypes die hard. Today's career doctors recommend planning for accelerated obsolescence. David Opton, executive director of Exec-U-Net, a Norwalk, Conn., company that helps executives find jobs, tells his 40-something clients they can't afford to delay. Take the class or do the off-hours work needed to prepare for that next step now. Fight for that promotion or job. The reason: "It gets noticeably harder to place candidates over the age of 45."

The Grecian plan. If you can't outrace 'em you can try using the starlet strategy--fool 'em. When Henry Daniels got laid off from an Internet start-up late last year, he noticed that the most experience requested in the want ads was 10 years. So Daniels, who at 35 had been programming for 13 years, erased the college graduation date from his resume. He figured out a way to honestly say he had only eight years of experience (with one particular software tool). Although employers are starting to wise up to the missing-graduation- date ruse, it is illegal for them to ask about age. Daniels's approach paid off. He landed a job in January as a senior programmer at a Phoenix computer firm. He expects to go to more extreme lengths to get his next job. "I'd cut my hair to look 10 or 15 years younger. I'd use Grecian Formula. I'd understate my experience" even more, he says. The reason: He looks around his office and wonders: "Where are the 40-year-old programmers?"

The wisest career move may be to, like Ripken, step aside into a new field altogether, says Dean K. Simonton, a psychology professor at the University of California-Davis. He's the one who figured out that people in most careers peak in their mid-40s--but not because of anything special about 40-year-olds. Instead, Simonton discovered people tend to do their best work 10 to 20 years after they begin a trade, no matter at what age they started.

That's what Arlene Vincent-Mark discovered. After 12 years working for an Atlanta sports marketing firm, she woke up one day shortly after her 40th birthday and decided not to delay her dreams any longer. She enrolled in a Ph.D. program in international relations and development. It was hard. It sometimes took her 12 hours to write papers that younger students polished off in two or three. But Vincent- Mark, who ran the marathon in the 1988 Olympics for her native Grenada, had mastered discipline and efficiency. She studies cards of French verbs on her daily runs, for example. Now 45 and preparing to graduate in December, she says she has to "work harder, but I'm feeling better and thinking clearer" than she did in her 20s.

Vincent-Mark may not get rich in her new field, but even in this earn-fast, burn-out-young economy, career coaches say that shouldn't matter. Shapiro tells his clients, rich and poor alike, to do something they love. His rich clients who don't "are miserable. . . . You are a human being, and you need some meaning in your life," he says.

40 facts

Number of people turning 40:

1975: 2.3 million

2000: 4.7 million

Total number of 40-somethings in the United States:

In 1975: 23 million

In 2000: 42.6 million

In 2005: 44.9 million

Percentage that 40-somethings make up of the U.S.:

1975: 10.6

2000: 15.5

Average annual spending of families headed by 40-year-olds:

1975: $38,313*

1998: $42,154

Total spending by all families headed by 35-to-44-year-olds:

In 1975: $461 billion *

In 1998: $1 trillion

Average annual spending on food away from home:

1975: $1,891*

1998: $2,439

Median investment portfolio:

Of a 40-something in 1999: $5,000

Of a 30-something in 1989: $1,300

Percentage that complex reasoning ability will slow:

From ages 30-50: 7.2

Percentage that visual-spatial reasoning and memory declines:

From ages 30-50: 11.5

Percentage that ability to recall words after distraction declines:

From ages 30-50: 6

How many more calories a 30-year-old burns than a 40-year-old:

120 per day

Percentage of 40-year-olds who are overweight:

Men in the 1970s: 65.5

Women: 46.5

Men in the 1990s: 67.7

Women: 54.5

Percentage who currently wear glasses:

30-somethings: 62

40-somethings: 74

50 and over: 94

Number of cancer deaths among 40-to-44-year-olds:

1975: 71.2 per 100,000

1997: 51.6 per 100,000

Live births to women ages 40 to 44:

1975: 4.6 per 1,000

1997: 7.1 per 1,000

Men ages 35 to 44 who smoke cigarettes:

1974: 51 percent

1995: 31.5 percent

Percentage of 40-year-old women who are childless:

1975: 8.8 1997: 16.6

Amount a typical 40-year-old has shrunk since 30:

5/8 of an inch

Heart-disease deaths among 40-to-44-year-olds:

1975: 76 per 100,000

1997: 40.1 per 100,000

Remaining life expectancy of a 40-year-old:

Today: 38.4 years

In 1975: 35.8

40-to-44-year-olds calling their life "exciting":

In 1975: 39.9%

In 1998: 53.3%

Average daily sleep time of 40-somethings:

7 hours, 33 minutes

Hours per week 40-something women spend on housework:

1975: 24

1995: 16.2

Hours per week 40-something men spend on housework:

1975: 6.1

1995: 9.8

Most common names of 40-year-olds:

David and Mary

Most common names of 40-year-olds in 2040:

Michael and Emily

Average number of minutes per day spent grooming or in the bathroom:

30-34-year-olds: 49.2

40-44-year-olds: 50.8

50-54-year-olds: 52.8

Percentage who own their own home:

40-to-44-year-olds in 1982: 73

30-to-34-year-olds in 1988: 53.2

40-to-44-year-olds in 1998: 70

Number of workers in 1999:

Age 30: 3.2 million

Age 40: 3.6 million

Age 50: 2.8 million

Percentage of population employed in 1999:

30-year-olds: 80.6

40-year-olds: 81.8

50-year-olds: 80

Percentage of 40-year-olds who are divorced:

1975: 6

1999: 13

Percentage of 40-year-olds who have attended college:

1975: 31.5

1999: 52.6

Most common college major of 40-year-olds:

Today: business

In 1975: education

Percentage who think their jobs are secure:

30-to-34-year-olds: 66.9

40-to-44-year-olds: 64.5

50-to-54-year-olds: 70.6

Percentage who think it would not be easy to find a job just as good as the one they've got:

30-to-34-year-olds: 20.5

40-to-44-year-olds: 39.1

50-to-54-year-olds: 43.1

Number of weeks it takes an unemployed person to find another job:

25-to-34-year-olds: 13.5

35-to-44-year-olds: 16

45-to-54-year-olds: 16.7

Compared with their parents' standard of living, percent of 40-to- 44-year-olds who think:

Theirs will be much better: 36.2

Somewhat better: 28.3

About the same: 20

Somewhat worse: 13.6

Much worse: 1.9

Median ratio of debt to income for households headed by 40-year- olds:

1989: 17.9%

1998: 19.4%

Median household income of a 35-to-44-year-old:

In 1975: $45,077*

In 1998: $48,451

Percentage of women ages 40 to 44 who say they are virgins:

2.4

*In 1998 dollars

Forties Rule

Over the hill? No way

Pick your favorite historical characters. Odds are they did their best work in their 40s. Dean K. Simonton, a psychologist at the University of California-Davis, says that, on average, scientists do their best research at 42. Authors write their best novels at 43. And generals win the most battles at 45. Don't believe it? Check out this list.

At Age 40

Mohammed heard the angel Gabriel tell him he was the messenger of God and founded Islam in 610.

Paul Revere made his midnight ride in 1775.

Florence Nightingale established a nurse-training school in 1860.

At Age 41

Christopher Columbus discovered the New World in 1492.

Mao Zedong started the Red Army's Long March in 1934.

At Age 42

William Shakespeare wrote Macbeth in 1606.

Christian Dior remade women's fashions with his New Look in 1947.

Rosa Parks ignited the Montgomery bus boycott in 1955.

At Age 43

Marie Curie isolated pure radium in 1910.

Johannes Brahms finished his first symphony in 1876.

At Age 44

Adam Smith started writing the bible of modern capitalism, The Wealth of Nations, in 1767.

Sam Walton opened his first Wal-Mart in 1962.

At Age 45

Henry Ford introduced the Model T in 1908.

Mohandas Gandhi returned to India to start his nonviolent campaign for independence in 1915.

Christiaan Barnard performed the world's first heart transplant operation in South Africa in 1967.

At Age 46

Benjamin Franklin flew a kite in a thunderstorm to prove lightning was electricity in 1752.

The Duke of Wellington defeated Napoleon (who was 3 1/2 months younger) at Waterloo in 1815.

Thurgood Marshall defeated public-school segregation by successfully arguing Brown v. Board of Education before the Supreme Court in 1954.

At Age 47

Charles Darwin started writing On the Origin of Species in 1856.

Alexander Fleming discovered penicillin in 1928.

Mother Teresa opened her leper colony in 1957.

At Age 48

Julius Caesar invaded Britain in 54 B.C.

Howard Carter made archaeological history when he opened the tomb of Tutankhamen in 1922.

Marlon Brando won--and refused--an Oscar for his performance in The Godfather.

At Age 49

George Washington secured American independence by defeating the British at Yorktown in 1781.

Julia Child co-authored Mastering the Art of French Cooking in 1961.

Andrew Grove restructured a troubled Intel, closing memory chip plants, focusing on more lucrative microprocessors, in 1985.

Marcus, David L. "Generation X Turns Out To B Generous: Under-40 Alumni Shape Up To Be Major Donors" U.S. News & World Report, Washington, DC: February 21, 2000 (p. 54).

Abstract:

Dot-com fortunes, Wall Street bonuses, and large inheritances have left many recent college graduates flush with cash and stocks, and they're giving it back to dear old alma mater in quantities never seen before.

Full Text:   (Copyright U.S. News and World Report February 21, 2000)

Ever since she graduated from Wesleyan University in 1988, Sarah Killough has sent a small annual check to help the Connecticut school's fund-raising campaign. Then, last summer, she made a windfall investing in an Internet start-up that went public. She quickly gave her alma mater $300,000 to endow a scholarship. "I want to make a difference," says Killough, 34, who plans to add an additional $200,000 to the fund in a few years.

Dot-com fortunes, Wall Street bonuses, and large inheritances have left many recent college graduates flush with cash and stocks, and they're giving back to dear old alma mater in quantities never seen before. "It's noticeable across all types of charities: Younger donors are making larger gifts," says Prof. Timothy Seiler of Indiana University's Center on Philanthropy. Meanwhile, college development offices have used savvy marketers to pursue alumni under 40; Georgetown University's Graduates of the Last Decade volunteers, for example, sent out a mailing expressly designed for the irony generation that read, "Here's the perfect Annual Fund letter for busy people: Blah, blah, blah . . . ." The response? A remarkable 10.5 percent return rate--three times normal.

Hey, big spender. Colleges have long wooed young alumni, but mainly to get them in the habit of giving. "We are ecstatic if a person who graduated in the past 10 years gives us $500," says Vicky Devlin, vice president of development of Bates College in Maine. She was astounded last year when lawyer Marjorie Northrop Friedman, 26, and her husband, Internet entrepreneur Peter Friedman, 28, who met at Bates, gave $150,000 for a scholarship. The money came from Marjorie's family's foundation. During a short meeting with a vice president from the University of Toronto last year, Jeff Skoll, a 34- year-old eBay executive, agreed to give more than $5 million to endow three chairs and build an engineering lab.

Schools that graduate large numbers of techies are especially successful, because their students are especially successful. Rensselaer Polytechnic Institute keeps careful track of alumni who start companies--and starts making pitches for donations before the companies go public. It worked with John Haller, the 36-year-old co- founder of MapInfo, a software firm. In the past year, he and his colleagues have given stock worth $2 million to RPI.

While those with new money can be generous, they also tend to be unseasoned donors. The dot-com entrepreneurs are a special challenge. "Quite a few of them are still sleeping in their offices, and they don't even know how much they're worth," says one college fund- raiser. David Glen, Stanford's director of principal gifts, is more tactful: "These people don't have the time to sit down and think about how they want to give. A true philanthropic spirit is not something you read about in a book." Stanford, surrounded by newly minted millionaires, is known for its soft touch in fund-raising. Last year Steve Jurvetson, a venture capitalist, and his wife, Karla, who also attended the school, decided to give back something. They chose what they describe as a "reasonable" figure. But after a dinner with Stanford's president--during which the issue of money was never raised--they decided to increase their gift 10-fold. Although they won't specify how much the Jurvetsons donated, Stanford officials say it was a record for a 10th-year reunion gift. "Entrepreneurs who hit it rich early in life don't feel they have to buy a second house or jet," says Steve Jurvetson. "And colleges are the first charity they know and understand."

While older alumni often like to pay for bricks-and-mortar structures and "naming opportunities," younger donors are interested in more personal projects. Investor Doug Ross, 30, wanted to thank the University of Richmond for helping him spend his junior year in Spain. So he gave $25,000, which his employer matched, to pay for students to study and travel abroad. Then he persuaded several friends to kick in to what he hopes will be a $1 million endowment. He also stipulated that the donation be kept apart from the university's endowment and overseen by a committee of students and professional money managers, so students would have an opportunity to learn about markets firsthand.

Colleges have also started focusing on women under 30--a group that was largely ignored two decades ago. "Women don't ask, `Where will you put my name and how large will it be?' They ask, `What impact will my donation have and how can I be involved?' " says Lilly Skok, who served as director of alumni affairs during a $42 million fund-raising campaign at Hollins University, an all-female school in Roanoke, Va. As for Killough, now that she has started a scholarship at Wesleyan, she is preparing to target other classmates who have reaped Internet riches. But first she's going to work on a business consultant who "really is not giving up to his level." That would be her father, James, class of '57.

Nagourney, Eric. "Study Finds Families Bypassing Marriage" New York Times, New York, NY: February 15, 2000 (p. F.8).

Abstract:

The study, by a sociologist at the Institute for Social Research at the University of Michigan, reports that about two in five children will spend at least some time living with their mother and her unmarried partner. Less often, children will live with their father and his partner.

The report also suggested that the number of children believed to be living in single-parent homes may be significantly exaggerated. About 40 percent of children born outside of marriage are actually living in homes with two adults, the report said.

''A large share of children born to supposedly 'single' mothers today are born into two-parent households,'' Dr. [Pamela J.] Smock wrote. ''Moreover, the widely cited increase in recent years in non-marital childbearing is largely due to cohabitation, and not to births to women living without a partner.''

Nagourney, Adam. "Youth Today: Not So Bad, by Comparison" New York Times, New York, NY: February 15, 2000 (p. F.8).

Abstract:

Adults who like to think of America's young as a bunch of lazy, cigarette-packing television addicts may be disappointed by a major new study that finds that adolescents in the United States smoke and watch television less than those in many other industrialized nations.

That still leaves lazy -- or, at least, sedentary -- and the study, conducted by the World Health Organization, finds that American teenagers exercise less than their peers elsewhere. And they eat more junk food.

Kotler, Philip. "Future Markets" Executive Excellence, Provo, UT: February 2000 (p. 6).

Abstract:

The only certainty is that things will change. Specifically, you an anticipate the following eight developments: 1. shifting demographics, 2. entertainment explosion, 3. high-income consumers, 4. convenience, 5. new media, 6. the importance of brands, 7. quality, pricing and service, and 8. cause-related marketing.

Full Text:     (Copyright Executive Excellence, Inc. February 2000)

Our only certainty is that things will change. Back in the 1950s, who would have anticipated Internet home shopping, home banking, satisfaction guarantees on new automobiles, customized bicycles, and factory-outlet shopping malls?

We will see the marketplace go through more radical changes. Specifically, we can anticipate the following eight developments.

1. Shifting demographics. More consumer marketing will focus on mature consumers-the 55-year-olds and older. The focus will shift toward health products, retirement homes, and forms of recreation and entertainment.

Mature consumers will want to be healthy forever. We'll see healthcare facilities where mature consumers pay to have regular diagnostic checks. Medical people will present a complete recommendation on exercise, nutrition, and stress management.

We will also witness a growing demand for light foods, low-calorie beverages, home exercise equipment, vitamins, beauty care and skin-care cosmetics-anything that will make you look and feel younger and healthier. Mature consumers will pay for luxuries like cosmetic surgery, personal exercise coaches, exotic travel, and continuing education. They will have youthful attitudes and outlooks.

At the other end of the age spectrum, children and teenagers will be more grown-up. These "mini-adults" will master computers and have access to information over the Internet that was never before available. They will be smart consumers who shop electronically.

2. Entertainment explosion. I expect an explosion in entertainment. People will want to be entertained whatever they are doing, whether they're working, shopping, or consuming. Recently, I saw a cyclist on an expensive bike, peddling at a furious speed while listening to music on his Walkman. These multiprocessing consumers will do two or three things at the same time, primarily because their time is short and there is so much they still want to do. Smart retailers, restaurants, hotels, museums, and orchestras will build special atmospheres and surprises into their offerings.

3. High-income consumers. We'll see the buying market segmented into high-income consumers and low income consumers, while the middle class will diminish in size. Many companies will still target the middle class. But more companies will clearly target their products and services at either the high-income or low-income class. High income consumers will demand high quality products and personalized services. At the opposite end will be people who just want basic, no-frills products and services at the lowest possible price. Each class can be further segmented by education, occupation, and lifestyle variables. High-income consumers will be high-achieving people with technical knowledge. They will work to live, not live to work. They will want more quality time apart from work to enjoy other pursuits.

4. Convenience. Time-starved, high income people want products and services made available to them in a hassle-free way. Their resistance to buying something may not be the price-it's the time, risk, and the psychic costs involved. There will be a great increase in home-based shopping and banking. More people will order clothes, appliances, and other products and services from catalogues.

5. New media. The key is response measurement. Direct marketing is about sending messages to specific addressable consumers and learning which ones placed an order. It started with direct mail and moved to telemarketing. Today, we have added infomercials, audio and videotape, CD-ROMs, computer disks, fax-mail, e-mail, and voicemail. Companies are rapidly building customer databases from which they can draw the best prospects for an offer. Products, too, will increasingly be customized. Companies will work with you to design your own bicycle, bathing suit, computer, and car. The buying process will become far more interactive, with consumers co-designing the product.

6. The importance of brands. Brands will always be important, although the importance of national brands is diminishing. Consumers are comparing the brands on price, and if one is on sale they will buy that brand, regardless of preference. No wonder more money is pouring into sales promotion and price incentives, and less into advertising. And with less advertising, perceived brand differences are eroding. Also giant retailers are introducing private brands that cost less. If your brand is not No. 1 or 2, you may be kicked out of the market.

7. Quality, pricing, and service. If your company doesn't produce high quality, you must either sell to low-income groups or go out of business. High product quality will become a ticket into the marketplace. But to win, companies offer high quality for a lower price. The key to good pricing is to figure out to whom you want to sell the product and what they think the product is worth-and then to design the product and its service bundle so it can be priced that way. You will need to justify your prices, using arguments with substance rather than relying on image alone. Service will grow as a competitive tool, especially as products become more similar. Companies must enhance the use-value, or service-value, which goes beyond purchase-value.

8. Cause-related marketing. Many companies will differentiate themselves by seriously sponsoring high-consensus social causes, such as environmental protection, helping the homeless, and saving the whales. Building a civic character, not just a business character, can build interest, respect, and loyalty.

(Philip Kotler is the SC Johnson & Son Distinguished Professor of Intl. Marketing at the Kellogg Graduate School of Management and author of Philip Kotler on Marketing (Free Press). This article was adapted with permission from Rethinking the Future (Nicholas Brealey), edited by Rowan Gibson; 800-462-6420.

Anonymous. "Marriage Rate Decline in New York City Mirrors National Trend: Report" Jet, Chicago, IL: January 31, 2000 (p. 35).

Abstract:

The number of new marriages in New York City is at its lowest point since the 1970s, pushed down by a decline in the number of people in their 20s, an end to the taboo on living together and financial incentives that can make it more appealing to stay single. In New York, the total number of new marriages fell 30% between 1997 and 1999.

Full Text:     (Copyright Johnson Publishing Company January 31, 2000

The number of new marriages in New York City is at its lowest point since the 1970s, pushed down by a decline in the number of people in their 20s, an end to the taboo on living together and financial incentives that can make it more appealing to stay single, The New York Times recently reported.

In New York, the total number of new marriages fell 30 percent between 1997 and 1999. The 1997 figure was thought to be artificially high, though, since changes in federal immigration laws prompted many immigrants to marry quickly.

In the last several years, city marriage rates have been at the lowest levels since the late 1970s. In 1999, the marriage rate in New York was 7.6 per 1,000, down from 9.1 per 1,000 in 1997.

Although the city has long been a haven for singles, the decline in marriage rates appears to mirror a national trend. In 1998, 8.3 per 1,000 Americans married, the lowest rate since 1958.

"The baby boomers basically have all had their initial marriage by now," Tom Smith, who runs the National Opinion Research Center at the University of Chicago, told the Times. "And we have a relatively small pool of people in the prime ready-to-get-married age now."

That age is generally around 25. Among causes cited by sociologists is a greater acceptance of living together outside marriage. Financial incentives may also play a role. Some low-wage workers lose tax credits when they marry and the so-called "marriage penalty" affects some double-income couples.

Byron, William J. "The Economics and Politics of Aging" America, New York, NY: January 15-January 22, 2000 (p. 25).

Abstract:

Byron reviews Gray Dawn: How the Coming Age Wave Will Transform America--and the World by Peter G. Peterson.

Full Text:     (Copyright America Press January 15-January 22, 2000)

Gray Dawn: How the Coming Age Wave Will Transform America-and the World, By Peter G. Peterson,Times Books/Random House. 280p $23.

If this book sold only 535 copies, and each found its way into the hands of a member of the U.S. Senate and House of Representatives, it would be a great publishing success.

Bookstore browsers may be deterred by the rather ambitious subtitle, "How the Coming Age Wave Will Transform America-and the World," but those who pause to read the opening sentence may want to consider the possibility that the contents of this book could be quite helpful to their personal and national economic health: "The challenge of global aging, like a massive iceberg, looms ahead in the future of the largest and most affluent economies of the world."

An investment banker and a former secretary of commerce, Peter Peterson advances and defends the thesis that global aging will be the "transcendent political and economic issue of the twenty-first century." Acknowledging a long and generally familiar list of "great hazards" looming large before the human community, Peterson uses the iceberg metaphor to suggest that demographic aging is a global challenge calling for a global solution. Some readers may find the arithmetic of the early chapters uninspiring, but abundant graphs and a sprinkling of cartoons make the ratios intelligible, even interesting. And those who are not much inclined to think globally will find in these pages more than enough to get them thinking and acting locally or, better, nationally to assure the future of both Social Security and adequate health care for all.

Much of the ongoing national debate about health care finance reform and the reform of Social Security is biased, uninformed and narrowly self-interested. This is why I would hope this book will be read by elected representatives, public officials and those who advise them on these two pressing issues. Peterson is accurate in presenting the data, clear in declaring his own preferences and passionate in calling for action before a point of irreversibility is passed.

The challenge of global aging is a byproduct of the affluence, individualism and technological progress that most of the world appears to want. Given the strength of these social forces, demographers will tell you, you can expect a shift from high fertility and high mortality to low fertility and low mortality; they call this "the demographic transition." The economic consequences of this transition are what Peterson wants to bring to the awareness of a wide audience.

"Pay-as-you-go" entitlements describe the social security system in most advanced nations. But what happens when the ratio of workers to retirees (fewer workers supporting more retirees) signals an unmanageable payment burden on the workers? Peterson presents a salad of six basic strategies for the consideration of policy makers. Some combination of these six could be fashioned, he says, into a "workable paradigm":

Lower retirement ages and longer life-spans add to the weight of benefit costs, so reduce dependency among the elderly by encouraging longer work lives.

In order to attend to the problem of the shrinking denominator (fewer workers), encourage more work from the non-elderly- either by getting working-age citizens to work more or by increasing the inflow of working-age immigrants.

Raise more numerous and productive children in order to spread the cost burden over a larger and more affluent rising generation. The affluence, presumably, will be a function of the productivity, which, in turn, depends on better education.

Stress filial obligation and hope that tomorrow's grown children will be more willing to support, through familial and informal devices, their own elderly parents.

Target benefits on the basis of financial need; this will increase the "carrying capacity" of the younger generation by reducing benefits to the affluent elderly.

Require people to provide in advance for their own old-age dependency by saving and investing more of their income during their work lives.

Nobody said it is going to be easy! Peterson addresses the predictable complaints, as well as criticisms elicited by his suggestions; they come from all ideological bases and from all the warring policy camps. The beauty of his book, in my opinion, is that it provides a well-lighted arena within which conflicting views can literally mix it up.

What, you might ask, does the author really think? "To be successful," he writes, "any new paradigm must draw on various and diverse strategies: from later retirement, to investing in children, to stronger families, to means testing. But I believe that transitioning to a funded and mandatory system of personal retirement accounts is probably the most essential strategy of all."

If leaders in government (especially Congress) and non-governmental organizations (like AARP, AFL-CIO and many other special interest groups) read this book, it will help them face up to the hard choices. If voters and ordinary citizens read it in order to arrange better the pros and cons of all possible policy choices in their minds, they will be able to encourage the decision makers to keep the issue on the table. The ensuing policy debate will, one might hope, generate sufficient light to see the iceberg and less heat. Heat alone will never melt what Peterson sees as "the iceberg dead ahead."