Census Reveals Changing Markets

CUNA's Escan
October 27, 2011 | COMMENTS

The unemployment rate for young adults is the highest since World War II, and they’re risk of living in poverty now stands at nearly one in five.

The wrenching impact of a recession that officially ended in mid-2009 comes through in data from the 2010 U.S. Census, released in September. Missed opportunities and dim prospects are becoming the norm for a generation of mostly 20-somethings and 30-somethings coming of age in a prolonged period of joblessness.

“We have an enormous jobs problem, and young people are the biggest losers,” Andrew Sum, an economist and director of the Center for Labor Market Studies at Northeastern University, tells the Associated Press.

Recent college graduates getting by on waitressing, bartending, and odd jobs will have to compete with new graduates for entry-level career positions when the job market does improve.

“Their high levels of underemployment and unemployment will haunt young people for at least another decade,” Sum adds.

A changing nation

The latest figures also show how the nation has changed since the 2000 census and projecting changes during the next five years. Highlights from research firm Bancography’s Bancology  journal include:

• In the decade from 2000 to 2010, the nation added 11 million households. Every state gained in population during that time, with Texas adding 1.5 million households and Florida and California each adding 1 million households.

• In percentage terms, Western states experienced the fastest household growth. The household bases in Nevada, Arizona, and Utah increased more than 25% from 2000 to 2010. Over the next five years, the nation’s household base is expected to grow 4.9% with Western and Southern Atlantic states showing the highest projections.

• The nation continues to become more urbanized. About 83% of U.S. households now live in metropolitan areas, up two percentage points since the 2000 census and perpetuating a long-term trend of urban migration.

For rural banks and credit unions, this can present a challenge, as the household base in their markets ages or migrates to nearby metros for job opportunities. Institutions facing such situations might need to expand into those nearby urban areas to generate balance growth.

Hispanic growth

About 17% of U.S. residents are of Hispanic origin, and this statistic is projected to increase to 19% by 2016.

For credit unions serving heavily Hispanic communities, it’s critical to develop bilingual marketing and collateral and focused community outreach programs, notes Bancology. Staffing the branch with a single bilingual teller is no longer sufficient. 

Immigrants are likely to pursue entrepreneurial ventures, and as those ventures mature, today’s immigrant class becomes tomorrow’s middle class. This established pattern of immigrant assimilation through business formation indicates broad consumer and business banking opportunities in the immigrant population.

Affluence and poverty

More than one in three young families with children were living in poverty last year, according to analysis of census data by the Center for Labor Market Studies.

Among young families with a head of household younger than 30, the poverty rate jumped from 30% in 2007 to 37% in 2010. In contrast, poverty remained at a low 5.7% for families with a head of household 65 or older.

“Young families with children are now six times as likely to be poor as elderly families,” says Andrew Sum. “This is a major generational change.”

About one in four families with children is headed by single mothers—another record.

Affluence, meanwhile, is heavily skewed toward suburban communities of major northeast metropolitan areas, with other wealthy areas concentrated in or near Los Angeles, suburban Denver, Los Alamos, NM, Chicago, San Francisco, and suburban Detroit.