Economic Generational Differences

Sarah Kaderavek

Mrs. Straub

AP Economics

17 March 2016

Economic Generational Differences

With growing generational diversity in today’s workforce, employees who hold similar positions and salaries to one another may not exhibit similar consumer behaviors as expected. This being so when examining a workplace, one will find Traditionalists, Baby Boomers, Generation X-ers, Millennials and eventually the up in coming Gen. 2020 (see Figure 1). Each generations have unique characteristics that impact how they act. These characteristics, as well as the state of the economy, translate to their likeliness to spend or save their additional income. In other words, although taxes and the economy dictate consumer’s marginal propensity to consume (MPC) and marginal propensity to save (MPS), generational differences also have a large influence in this same matter.

Figure 1. Breakdown of the workplace by generation

Traditionalists are the oldest generation found in the workplace. This generation was born between 1900 and 1945 and highly influenced by The Great Depression and World War II (West). The downturn of the economy during The Great Depression started with the collapse of the stock market and the failure of banks in the United States. The failure of banks lead to many bank runs which only worsened the issues faced by the economy. If you’re interested in learning more about this watch this video. These occurrences caused much of this generation to grow up poorer, therefore instilling the importance of saving in this generation. Additionally, because they grew up with less, this generation is comfortable living with less. Because of these values, their MPS is much higher than other generations while their MPC is often much lower.

Baby Boomers are the second oldest generation found in the workplace. This generation was born between 1946 and 1964 (West). Seeing as this generation is post Great Depression and post war, they had a very different life than the Traditionalists before them. According to Gelinda Grimes article, the Baby Boom generation was the first generation for a majority of its population to seek higher level education. Additionally, this is the generation of optimism due to the economic upturn after the war and the social changes that followed. These experiences not only create a sense of hard-work among Baby Boomers but also a sense of materialism (West). Due to this, Baby Boomers are more likely to have a higher MPC than the generation before them, while still remaining fiscally responsible. Generations X-ers are the generation that came after the Baby Boom, being born between 1965 and 1980 (West). Seeing as they were raised by Baby Boomers, this generation was taught to value their own opinion and work hard. This is also the smallest generation in size, so many other traits are shared with the generation before them. But according to Devon Scheef, this generation has “traits of independence, resilience, and adaptability.” Either way, their MPC and MPS can be predicted to be quite similar to Baby Boomers.

Millennials are the most current generation of adults seen in the workforce. This generation was born between 1981 and 2000 (West). When compared to Generation X, this generation “works to live” rather than “lives to work.” This generation has helped develop the greater demand  for technology as well. Thus, they are generally less stingy with money, so long as their career allows them to be. However, because their parents from Generation X pursued higher education, and they did as well, parents from this generation are interested in investing in their children’s futures. Due to these factors, it can be argued that their MPC and MPS are almost equal but may fluctuate due to certain expenses.

In conclusion, there is far more that goes into determining how an individual will spend there money than just the current state of the economy or tax and interest rates. Overall, as the generations have developed people are willing to spend more money as seen by the mindset of the Millennial versus the mindset of a Generation X-er. While marginal propensity to consume and marginal propensity to save fluctuate, there is a greater psychological understanding of each consumer which can be examined.

Works Cited

Grimes, Gelinda. “How the Baby Boom Generation Works.” HowStuffWorks. Infospace LLC.,

2016. Web. 12 March 2016.

Kadlec, Dan. “Millenials Won’t Cut Spending But Expect to Save More.” Time Inc. Time Inc.,

2016. Web. 12 March 2016.

West Midland Family Center. Generational Differences Chart. PDF file.

Scheef, Devon. “Generation X and The Millennials: What You Need to Know.” Law Practice

Management. American Bar Association, 2005. Web. 12 March 2016.

Spring Break

Alyssa Czerwinski

Mr. Reuter

Economics

29 February 2016

Spring Break

Spring break is an excuse used by many college students to leave their universities for a week and escape to a warmer area. These students dish out hundreds if not thousands of dollars going to to popular areas such as Cancun, Mexico, or Destin, FL. Even though there is opportunity cost in whether to stay home or to leave, with the idea of having fun on their minds, students do not realize how much their vacation have effect on revenue on local and national economies.

Since “ 1934, Sam Ingram, a Colgate College swim coach, was looking for a warm place to keep his swimmers in shape. He chose the small, quiet town of Ft. Lauderdale, Florida. More swimming instructors followed.” (Thompson). Little did Ingram know that his movement to help his swimmers would be the reason for students spends a total of billions of dollars every year to travel during spring break. Florida and Texas alone receive about 1 billion dollars in revenue every spring break.

There are many expenses when it comes to traveling, such as a plane ride, or gas for a car, food, hotel room expenses, passports, clothing and many more. Most of these costs contribute to the national income. Many spring break destinations have a small population prior to spring break, then drastically increasing as more consumers come to their city. As more people come, it can help small businesses stay afloat as well as help their state/county income.

While many think of spring break as a time to get away from classes, it is so much more. Spring break is a positive trip if the person stays in the U.S. and overall helps our income as a whole. Remember that while on your spring break vacation this year.

Thompson, Derek. "2,000 Years of Partying: The Brief History and Economics of Spring Break." The Atlantic. Atlantic Media Company, 26 Mar. 2013. Web. 13 Mar. 2016.

The Hideaway for Music Lovers

Claire Ellington

Economics B2

Reuter

3/13/2016

The Hideaway For Music-Lovers

Nashville, Tennessee, better known as Music City U.S.A., has consistently increased in population for the past century, however in the past 10 years, the population has rapidly increased with every coming day. What attracts individuals in particular is the abundance of job opportunities and growing love for the lively culture. Outpacing the rate of population growth in Nashville is the job growth rate. Not only is the city a notably desirable destination for aspiring musicians, but over 600 jobs will soon open in the Ryder Supply Chain Solutions, over 200 jobs in Servpro industries, as well as additional jobs in hospital chains and Community Health Systems. And although job opportunities open up and the unemployment rate decreases, people across the country are becoming more aware of the entertaining, Music City vibe of downtown Nashville as well, causing a greater desire to develop a life in the area. As seen in the graph below, both population and nonfarm employment show an increase over time, however the job production increased a whole 10% more than population growth.

The influx of people in the community, caused by job growth and an increased desire to live in Music City, alters the demand for housing by the demand determinants: population, income, and consumer taste. As the population increases, the demand for housing increases reflected by real estate market trends’ increase of 11%, or an approximate $21,745. Many homes owned by Nashville natives foreclosed due to the owner’s inability to keep up with the rapidly increasing mortgage payments. Although small town natives have to adapt to developments which may not benefit them, Nashville’s economy continues to boost by this urbanization. Below reads a graph of the increasing prices of properties over the dates August 2011 through October 2015.

The income aspect affects those who live in Nashville and those who aspire to live there since the scene now fills with newer jobs with higher incomes, therefore more people are willing to pay higher prices for homes that used to sell for lower prices. Most importantly, as previously mentioned, Nashville contains a vibrant environment for all kinds of music lovers that attracts a wide range of people, young and old, due to the increased consumer taste in live music.
 
As seen in the graph above, the United States has continually increased sales for live music tickets and sponsorship of which Nashville provides a major role in. Every turn, every coffee shop, and every restaurant is filled with some genre of live music in Music City. The plentiful scenes of live music provides yet another reason for citizens all over the U.S. to move to the area, whether they are artists themselves or simply enjoy listening to the strums of a singer/songwriter’s guitar.

Of the many up and coming cities, Nashville, Tennessee is one of the top in recent growth. The city has a variety of offerings for the public like job opportunities, much desired live music performances around every corner, and more. However, these many opportunities come at a cost: the opportunity cost. While people love to witness a city grow in popularity and urbanize, the natives of the city have to watch the cost of their house mortgages and daily purchases quickly rise. But despite the rising prices of standard living, Music City U.S.A. has become one of the newest hot places to live, attracting people from across the country, and even the world.

Works Cited

Lindeman, Nicholas. "Growth Trends & Forecasts." Nashville Area MPO:. Nashville Area MPO. Web. 13 Mar. 2016. <http://www.nashvillempo.org/growth/>.

"Real Estate Data for Nashville." Real Estate Market Trends for Nashville, TN. Trulia. Web. 13 Mar. 2016. <http://www.trulia.com/real_estate/Nashville-Tennessee/market-trends/>.

"Live Music Industry Revenue in the United States from 2010 to 2019, by Source (in Billion U.S. Dollars)." Statista: The Statistics Portal. Statista. Web. 13 Mar. 2016. <http://www.statista.com/statistics/491896/live-music-industry-revenue-in-the-us-by-source/>.

Ward, Getahn. "Can Nashville's Growth Continue?" The Tennessean. Web. 13 Mar. 2016. <http://www.tennessean.com/story/money/real-estate/2015/08/14/population-gains-key-nashville-job-growth/31509555/>.

MLA formatting by BibMe.org.