Demographics Don’t Predict the Future
In a data-saturated world, it is understandable that people are striving to find those pieces of information that are most novel, informative and insightful. It is also understandable that sometimes, too much is read into data and conclusions are drawn that look reasonable but are ultimately unfounded.
We see stories about the massive amount of wealth the Baby Boomers have accumulated, roughly $90 trillion, and how millennials are going to be the recipients of this wealth making them the “richest generation in history.” Perhaps in the aggregate and assuming that all that money isn’t spent. Based on Federal Reserve data, the median net worth of people between the ages of 65 and 74 is roughly $409,000; a sizable sum of money, but not the stuff of generational wealth. Similar predictions play out in politics with the expectation that shifting demographics will translate to monolithic voting blocs.
That’s the problem with demographics, as well as generational labels; they’re useful for observations in the aggregate but not so much for understanding people or their experiences.
In the last few months, and through sheer happenstance, I found myself in the audience of two separate keynote speakers who were self-styled demographers. As a discipline, demography has always been decidedly unsexy. Population pyramids don’t really have the same visual impact as an infographic, or a word cloud, or a pithy meme. At least, that’s what I thought.
But when a population pyramid is presented as an oracle revealing future behavior, interests, and market sizes? Apparently that is a compelling image. The corporate audiences wanted to know where their industries were going, and our demographers were more than happy to tell them. Across these separate presentations, we were told that just by looking at demographic data one could see into the future with “scary,” “amazing,” and “undeniable” accuracy; that demography tells us what is coming next. Without a hint of irony, the phrase “demography is destiny” was uttered. More than once.
I’ll be honest, I was a bit jealous – presented this way, demography looks like science and feels like magic. It’s a wonderful hook and the audiences seemed to enjoy it. I kind of wish I’d gotten in on this scheme….
Unfortunately, that’s not how demographics work. An aggressive oversimplification of demography as a science goes something like this: it’s counting how many. It is counting births and deaths, dividing people into age groups, or by race or sex. Maybe we get fancy and sort people into income categories or by educational attainment. But at the end of the day, demography answers the question “how many?” And that question has a lot of value for things like urban planning, uncovering disparities between groups, allocating resources across municipalities, or projecting population growth. Demography absolutely does not answer the question “what are people going to do?”
At some point in these presentations of demographic divination, the chart below – or some version of it – almost always makes an appearance:
The chart shows birth rates in the U.S. That massive spike from the early 40’s through the mid-60’s is the Baby Boomers; the massive drop from the late-60’s through 1980 is Gen X. The rest are Millennials and Gen Z and Gen Alpha. This chart shows up for a couple of reasons. One is that the little spiky bits –especially the ones in the early-80’s, mid-90’s and 2010’s - are great for designating those previously mentioned, though largely overused, generational labels.
The chart also looks like it is showing a dramatic decline in population. It isn’t. There were roughly 69 million Boomers, 65 million Gen Xers, 72 million Millennials, and 70 million Gen Z. It does show an overall decline in the fertility rate. But if one doesn’t explain that, then it looks like it is evidence of a dramatic societal shift – no one is having children, the population is stagnating. It also says nothing about what any of those people were experiencing at any given time.
This is where demography becomes the scientific cover for generational labels, falling back on stereotypes about who individuals are based on their age range and how many of them there are. That is exactly the direction these speakers went – using the sheer number of men, women, immigrants, Millennials, Gen Zers – to say something about what people would want. It had much the same tenor as a psychic’s cold reading with a heavy dose of essentialism – people are going to want cars, houses, children, [fill-in the audience’s industry here], and there are 70 million of them!
Knowing how many is important, but it isn’t the same as knowing why. Demography offers a snapshot – who is there, what they look like, what characteristics they share. But it offers no explanation for their behavior or insights into their lives. That requires a deeper exploration – one where we understand the lives of individuals and the cultural moment in which they live. Only then, informed by their experiences, can we speak to their wants and desires with any clarity.