Chapter 5 - Economic Indicators

Today's Young Affluents Are the 'Want-It-All' Generation

The article I found is about the transition between the Baby Boom generation and the generation X. It talks about how marketers for luxury products are shifting from their previous target market (Baby Boom generation) to generation X. The people from the Baby Boom generation are getting closer to retirement and their views on luxury items are different from the younger generation X. Today, the younger generation spends more on luxury items then the previous generation, “2006 the 40-and-under young affluents spent 32 percent more on luxuries than the over-40-year-olds, an average of $65,294 as compared to $49,485” (paragraph 4). The incomes were nearly identical for both age groups. The article also talks about how the younger generations are more exposed and aware of the internet, which could be used to buy and sell internationally. This would create much more revenue for international companies since the generation X people spend more on luxury goods. Now marketers for luxury products must adapt to the new generation by figuring out their different views and spending habits on luxury items.

http://www.furninfo.com/absolutenm/templates/NewsFeed.asp?articleid=7484

This is tied into chapter five because it involves the close retirement of the Baby Boom generation which makes up a large percentage of our population. When most of them retire, there will be a higher participation rate wanted by employers from the dramatic loss of employees. This situation may also increase frictional unemployment because since there will be many opportunities for new jobs, younger people with underemployment may most likely be able to acquire those open positions that fully utilize their skills. Also, many more people from the younger generations will come out of hidden unemployment because there will be more jobs available that might be suitable for them. The large amounts of retirement due to the baby boom generation is a natural rate of unemployment. People get old, therefore they wont be able to work. Many luxury businesses will invest into research and development so they can satisfy the younger generations wants and needs. If businesses have not already done so, they should invest in new equipment such as using new technology. For example, the internet, it is widely used by the younger generation and will be a vital necessity.

I can easily predict that many counties GDP will drop because of all the Baby Boomer people retiring. Since they a large population will be retiring, they wont be able to work and have an income. There is not enough people in the younger generations to accommodate for the loss of spending that will occur. But, since the spending habits of the younger generations is much higher than the Baby Boom generation, I think that the decrease in GDP will be gradual. As well, there are always new advances in technology which makes production much more efficient.