Over the next couple of posts, we’re going to be talking about income trends and how they may affect a museum’s earned income (particularly admissions and membership) and charitable gifts. But we have two very different lenses to look through.
Today’s lens is income growth by age, taking a look at how different age groups have fared financially over the course of the last decade. On the surface, at least until the Great Recession hit, it appeared as if most Americans were doing rather well and earning more than previous generation. When we went deeper into the US Census's data to look at how inflation-adjusted median income changed from 2000 to 2009 for different age groups, however, we found that most Americans were worse off than their predecessors were:
If you take a look at, for example, people who are 35 to 44, the median income of householders in that age band in 2009 was about 8% less than the inflation-adjusted median income of the average householder in that same age band in 2000. From that, you can assume that the typical 40-year-old householder in 2009 was making less than the typical 40-year-old householder in 2000. Ditto for every ten-year-age band up to age 55. Those who are 55 or older are doing better than those 55+ were ten years ago, and the really healthy income shift doesn’t show up until you are looking at those over 65.
Additionally, we’ve also analyzed household debt burden by age, and we found a second financial constraint for young Americans: adults currently younger than 45 years of age have a much heavier debt burden in the form of mortgages than those over 60. Why? It’s all about whether they bought before the housing bubble expanded, or closer to the housing market peak prices.
Is it any wonder, then, that in our surveys we continually find that families are the audience segment constantly worried about their family budgets, are looking for high-value opportunities to entertain and engage their families, and are most likely to purchase memberships as a means of saving money? Or that young adults under 30 are the ones most likely to think museums are just too expensive in the first place? It should be no surprise because they all have less money to spend than the same age groups did 10 years ago.
Looking ahead, what does this data mean for museums?
- That museums seeking to attract young adults have to be very much aware that discretionary income is tight, and even a modest admission fee may keep them away.
- Family audiences are constantly weighing what is the best value for their families. Admission fees that total $50 or more become daunting very quickly for a family (never mind admission fees that exceed $100 for a family; and then there are the typical add-ons of food, shop purchases, etc.) Memberships that provide reciprocal admissions at other sites, guest passes, free parking, and just a great bang for the buck do continue to be popular, however.
- For adults under 55, philanthropy may be changing. If incomes are down, commodity prices are increasing (among other things), the budget for charitable giving is likely shrinking, jeopardizing the pipeline of future donations as visitors, even members, become unaccustomed to making charitable gifts, and don’t have the money to do so anyway.
- But older adults overall may be seeing more financial resilience, given their incomes, at least over the last decade, have increased. There may be opportunities for growth in both earned income and charitable gifts with this segment (keeping in mind that not all Americans 55+ have seen income growth, just most!).
Next week, we are going to continue our examination of incomes, and take a look at aggregate earnings during the peak earning years by race and ethnicity.
What do you think? Do you see these changes in income dynamics in your generation? How do you think it will affect your museum? To share your thoughts, simply click on “comments” below. (If you are reading this from your e-mail subscription to the blog, please go to our blog's website to add a comment.)
Interested in digging through the hard data yourself? You can find loads of historical data on income at the US Census’s website, http://www.census.gov/hhes/www/income/data/historical/household/index.html.