Commentary

Generation Y Earns $211 Billion and Spends $172 Billion Annually

Generation Y Earns $211 Billion and Spends $172 Billion Annually

American kids, teenagers, and young adults, aged 8 to 21 years, have annual incomes totaling $211 billion, according to latest projections based on the findings of Harris Interactive YouthPulse, an online study of the Generation Y population. Results show that this group is spending at a rate of approximately $172 billion per year and is saving at a rate of $39 billion per year.

The economic downturn and recovery has been felt in the youth market. The annual incomes among 8 to 21 year olds is down from Harris Interactive's projection of $231billion in 2002, although spending is up from a projection of $155 billion in 2002. The study projected the income, spending, and savings habits of Generation Y. The spending power of young consumers grows substantially with age and is concentrated in the upper end of the Generation Y age range:

  • Pre-teens (ages 8-12) spend at a rate of $19.1 billion annually, or $946 per capita;
  • Teens (ages 13-19) spend at a rate of $94.7 billion annually, or $3,309 per capita;
  • Young adults (ages 20-21) spend at a rate of $61.3 billion annually, or $7,389 per capita.

    John Geraci, vice president of youth research at Harris Interactive, said "There are more than 57 million individuals in the 8-21 age group, and their influence on the consumer economy is immense. Generation Y's needs and opinions drive many adult purchase decisions, and they, literally, represent the future market for most consumer brands. It is a very optimistic generation, and they demonstrate a great deal of confidence that the economic rebound is around the corner and that good times are ahead for them "

    87% of income for children under age 13 years is parent-supplied - either through allowances, asking parents for money, or through money earned from special chores or household work. In contrast, 37% of teens' income and 7% of young adults' income is parent-supplied.

    Fifteen percent (15%) of youth spending is done online, and this percentage was consistent across the 8-21 age range. However, boys remain more comfortable with ecommerce, as they spend 1.7 times as much as girls do online.

    Geraci also noted, "On average, young people carry less than $30 with them, so they need to constantly connect to their income source or savings to buy things."

    You can find out more here.

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    About the Author

    Jack Loechner is the Editor of The Center for Media Research's daily Research Brief. You can reach him at jack@mediapost.com.