Businesses Try To Cash in on Boomers
Friday, August 4th 2000, 12:00 am
By: News On 6
WASHINGTON (AP) â€” Message to aging baby boomers: Lorain, Ohio, wants you. Or at least your money.
The city hopes to revitalize its downtown economy by enticing prosperous members of the baby-boom generation to spend some of their money on waterfront townhouses that cost as much as $300,000.
The Lake Erie city is not alone in trying to cash in on the wealth of graying boomers, who find themselves with much more green in their wallets than their parents had in middle age.
``They do have a sense of newfound income, not having to take care of two or three kids,'' said Frank DiTillio, president of the Lorain County Chamber of Commerce. ``This is the time of their life when, after 20 or 30 years of hard work, they can enjoy the money on themselves now.''
``You have people who are trying out expensive new beauty products, and others who are trying out new technology,'' said Ken Dycthwald, founder of Age Wave IMPACT, an Emeryville, Calif.-based marketing firm that focuses on middle-aged and older Americans.
``The 1990s were incredibly prosperous times for these adults. They are becoming the power consumer in this millennium,'' he said.
Today, there are about 78 million baby boomers, typically defined as people born between 1946 and 1964. The oldest boomers will be 54 this year.
Some analysts predicted that boomers would not be so successful as their parents, simply because so many were competing for what was then thought to be scarce jobs, said Lori Keister, sociology professor at Ohio State.
Census figures tell a different story: the median family income for a household headed by someone between 45 and 54 rose from $3,440 in 1947 to $61,833 in 1998. Accounting for inflation, the 1947 figure equates to $23,170 in 1998 dollars, Census officials estimate.
``We see a real contrast between people in the first half of productive life investing and running up debts'' to get their children through school, ``and in the second half, reaping and harvesting the benefits,'' said demographer Martha Farnsworth Riche, former head of the Census Bureau.
Citing today's robust economy, good salaries and pension plans, Ohio State's Keister said, ``Social Security won't be a major concern for boomers on average. If they don't have Social Security (when they retire), it's probably not going to matter much.''
She also said boomers are more likely than their parents to have more wealth than income, meaning they have more than a year's worth of salary in savings. That also holds true for liquid financial assets and home equity, but boomers also have fewer other financial assets and more debt.
Only now is the advertising industry, dominated by people in their 20s and 30s, trying to target older generations en masse for things beside luxury cars, said Beth Barnes, advertising professor at Syracuse University. She says it will take Madison Avenue a while to change.
``When you talk about messages that appeal to older groups, ... it's a problem that agencies are trying to address,'' she said.
Not all boomers will benefit from the good economic times. Some are taking care of elderly parents even after their kids have left.
Income distribution also is not evenly distributed, and great disparities exist between the poorest and richest baby boomers. Many boomers delayed child-rearing until their late 20s and 30s and are only now saving up for their children's college.
After getting divorced nine years ago, and with her children out of the house, Linda Cheney of Bryantown, Md., needed something to fill her newfound time and shore up her finances. She went back to school and graduated after eight years with a bachelor's degree in information services technology from the College of Southern Maryland.
``I'm 50, a baby boomer, and I look proudly back on that time when I grew up,'' she said. ``But this is a totally different situation to where I expected I'd be at this point in my life.''