The CQ | The White Collar Recession and Americans' Addiction to Cheap Junk
Plus The Team's Must-Reads of the Week
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What We’re Talking About on Slack:
Welcome to the white-collar recession. Amid reports of low unemployment and increased wages and job growth, a closer look at hiring data from Vanguard reveals something else: a blue-collar boom and a white-collar recession. For workers who make less than $55,000, the hiring rate is at 1.5%; for those who make more than $96,000, hiring is at 0.5%. There may be several explanations for this divide, including that companies may be preparing for tough times ahead and cutting back on expensive workers to reduce costs. It could also mean that fewer white-collar workers are quitting (because no one is hiring) so there are less jobs to fill, which could be a sign of a “trapped-in-place economy.” As more companies adopt AI to take on writing, coding, and analysis tasks, high earners will increasingly be at risk.
While there’s been much reported on the transfer of wealth from boomers to their millennial children ($16 trillion expected over the next decade; $84 trillion by 2045), the New York Times sheds light on the wealth shift that could leave some younger Americans behind, namely families that don’t have much—or any—assets to pass down. According to Federal Reserve data, the average net worth for those 65 to 74 in 2022 was close to $1.8 million. However, that number is skewed by those at the upper end of the wealth spectrum. At the median, the average net worth of this age bracket was about $410,000, which accounts for the values of homes and investments. A recent survey also found that half of millennials expected they would inherit at least $350,000; though 55% of boomers who say they plan to bestow assets to their kids say the amount will be less than $250,000. There’s also the fact that many aging parents will require care as they get older, which will eat into their assets.
And also: Young Americans are getting left behind on rising home prices and higher stocks. Due to these constantly increasing prices, a large gap is developing between the wealth of older generations and their kids and grandchildren. Older Americans were able to get in on lower prices of homes and investments years ago when prices were lower. Today, younger generations are finding it much harder to attain the American dream. The median household now needs more than 40% of its income to cover payments on a median-priced home. “Our parents can’t process that this is the new norm for home prices.” Not only that, but those 55 and up hold about $31 trillion of the $40 trillion in corporate equities and mutual funds owned by households.
Considering the wild popularity of Temu and Shein, will Americans ever get sick of cheap junk? According to The Atlantic: not likely. A recent report found people making over $130,000 a year account for nearly half of Temu’s American sales. “Wealthier people have more buying power in the first place, but that’s exactly the point: If even they haven’t yet gotten their fix of cheap stuff, we might be nowhere close to the extremes we’re ultimately capable of.” What’s also perplexing is that the consumers who are critical of this type of consumption still participate in it. A different report showed that Shein shoppers are considerably more likely to express concern about the environment and sustainability than shoppers overall.
Along those lines, the wealthy are less willing to spend on sustainable products, says a new survey. Over half of respondents say they’d be willing to make lifestyle changes to support sustainability, with 52% who would be willing to pay 10% extra for a sustainably made product. But when you remove the responses of those whose household income is less than 100,000, the percentage drops to 45%. “The more wealthy this consumer is, the more they scrutinize, interestingly enough, how they spend their hard-earned money.”
While much has been reported on the mental health of young people, new data shows that mental health diganoses have jumped among seniors. Between 2019 and 2023, mental health diagnoses have risen 40% nationally, but for those 65 and up, the number is 57%. Several factors, from stress from the pandemic to more access to telehealth and reduced stigma, may have contributed to the increase. Overall, generalized anxiety disorder was the most common diagnosis last year.
Bloomberg puts a spotlight on the long, slow death of urban nightlife. From London, Berlin, and Sydney to Montreal and Nashville, cities are seeing the effects of sky-high rents, limited overnight mass transit, stringent noise rules, safety fears, and stigma as more and more young people are drinking less. Between 2020 and 2023, around 13,800 clubs, bars, and restaurants shuttered in the U.K. A few cities are implementing plans to try to save their nighttime economies. Montreal is looking into creating “noctunal zones” with soundproofed venues and improved transportation. “Cities may need to generate new demand by offering a wider range of high-quality activities. That may include shows and special parties at unique venues, night markets and other cultural activities.”
How will Gen Z’s contradictory values will reshape the travel industry? Gen Z’ers travel more than other generations: 63% of them have made travel purchases in the last year. And 67% of them are also more concerned than other generations about the need for climate action. These stats bode well for ecotourism to become a rising trend. What’s more, 25% of Gen Z’ers say they look to social media for travel inspiration. And even though they’re known for spending a lot of time online and on social media (approxiamately 9 ½ hours a day), they say they prefer authentic experiences off the beaten path, with many opting for “destination dupes” instead of traditional tourist spots.
Instagram is updating its algorithm to surface more content from smaller, original creators after criticism over the negative impact of its algorithm. In addition to offering a new way to rank recommendations that will offer smaller creators more distribution, Instagram will recommend original original content instead of reposts, and it will add labels to reposted content to link users to the original creator.
Millions of American kids are caregivers now. Compared to 1.3 million two decades ago, it’s estimated that there are 5.4 million children under 18 caring for relatives with medical conditions or functional decline. Researchers say the increase is because many families can’t afford or find in-home care, in addition to an aging population with complex medical needs and shorter hospital stays becoming the norm.
Portfolio Highlights:
Chime is on the cover of Forbes in a feature that chronicles CEO/Founder’s Chris Britt’s journey building the company from a small startup to one of the most important fintech companies today.
CNN Decoded explores women’s health tracking with Holly Shelton, Oura’s chief product officer. Then, Tom Hale, CEO of Oura, offers tips for better sleep hygeine in a Forbes’ video.
Wired reports on the trend of fractal home ownership startups, including Arrived and quotes CEO Ryan Frazier.
Ritual founder and CEO Katerina Schneider spoke at the WWD Los Angeles Beauty Forum along with Olive & June founder and CEO Sarah Gibson Tuttle.
Forbes covers Faire’s launch of an academy for aspiring retailers.
Sunday is mentioned in ModernRetail’s story on eco-friendly gardening brands entering big-box stores.