Don Cunningham: Millennials are the New Economic Engines
By Colin McEvoy on February 16, 2018
This column, written by LVEDC President and CEO Don Cunningham, originally appeared in The Morning Call and on the newspaper’s website on February 14, 2018. (Click here to read Cunningham’s previous columns.)
Large economic trends are often found in unusual data.
I recently stumbled upon this gem: 31 percent of disposal diapers are now bought for adults
The reason: more old people, fewer babies.
It appears we have another excuse for which to rail upon the millennials. They’re not making babies early enough.
Kimberly-Clark, makers of Huggies diapers, is cutting 13 percent of its global workforce, about 5,000 jobs, due to declining sales. Procter & Gamble, producer of Pampers diapers, also announced a drop in sales, including those of baby bottles, bubble bath and nursing pads.
Turns out, aging baby boomers suffering the misfortune of lost control are saving the diaper market. Therefore, I’ve already thanked my dad and his Florida retirement community friends in advance on behalf of P&G for their service. If that awful day arrives, they need to feel good about creating jobs while strapping on.
As to these confusing millennials in their 20s and 30s who are delaying marriage and children, we need to slow our roll of economic complaints. They may be costing us diaper sales – and early grandchildren – but, otherwise, they are the new economic engines.
The Atlantic reported last month that America’s craft-beer revolution has helped to create 70,000 brewery jobs, almost three times as many as a decade ago. That’s four new brewery jobs for every lost diaper job.
If you’ve never had a Heady Topper, a Saint James Red Headed Stranger, a Pork Slap Pale Ale, or one of the other creative concoctions coming out of America’s 5,300 plus microbreweries, thank a millennial on behalf of a grateful nation.
They are consumers and America is a consumer-driven economy.
Clothing and footwear sales also continue to grow.
Between 2000 and 2015, global clothing production doubled, while the average number of times that a garment was worn before disposal declined by 36 percent, according to Bloomberg News.
During the 80s if I had a favorite T-shirt I wore it until it disintegrated. My 22-year-old son has more clothes in his closet than I’ve worn in a lifetime. He buys footwear on a regular basis, every color, every style for every occasion. My closet has the exciting array of black and brown shoes, standard issue. A pair of black and brown wingtips, a set of matching loafers, a pair of casual shoes and sneakers, if that term is still legal. My son has inherited, however, the family frugality and scours thrift shops and the internet for good buys, often preferring some retro cool style that his grandfather may have worn in the 60s.
Aside from helping to drive the consumption economy, the millennials are a very talented, smart, and discerning generation. They grew up with technology, understand it, don’t fear it and, therefore, are the first-round draft picks of the American workforce. There are 83.1 million of the them, according to the U.S. Census Bureau, compared to 75.4 million baby boomers. That means that us Generation Xers at least did our jobs in cranking out the babies, even if doesn’t appear yet that we passed along the baby-making gene.
The babies will be coming, however, and look out when they do. Along with that, homes will be purchased, which will free up a lot of basement space for my generation. In the meantime, however, they are the new talent that is driving economic development decisions and trends in cities and markets across America.
The nationwide search of Amazon for a second headquarters to serve as home to 50,000 employees has garnered a lot of publicity around economic incentives being dangled by state and local governments. The reality is economic incentives will be much less of a decision-making factor than what area can attract and support the talent that Amazon needs.
The Lehigh Valley has turned the corner to compete for millennials, young professionals, and the educated talent needed to attract and retain a larger base of corporate and regional company headquarters. Central to that has been the revitalization and renaissance of all three cities, Allentown, Bethlehem, and Easton. It is a new Lehigh Valley, and one that can support professional development along with serving as one of America’s industrial and manufacturing hubs.
The growth of office buildings, restaurants, bars, performing arts venues, walking trails, and sports teams across the Lehigh Valley is a necessary foundation to attract companies in the bio life sciences, technology, finance and insurance, medical and research sectors. We need look no further than Pittsburgh as a model. Driven by quality higher education and health care networks, the former steel city has transformed itself into a budding technology hub overflowing with young people.
Just as with any successful sports team, talent is the key. Companies want to be where talent wants to be. With nearly full employment, the regions that offer an attractive quality of life, at a competitive price to this new generation will continue to grow.
So, in the end, craft beer matters more than diapers. Microbreweries, distilleries, affordable hip restaurants and new downtown apartments are both the cause and effect of a new economy that retains and attracts the young, along with every other generation. It’s just that longer-term economic models are built on the predilections and preferences of those who are likely to be around and productive for more decades.
In the past, a nice ranch house on a 1/3rd of an acre, close to a good school and a few decent diners did the trick. Times and tastes have changed. Fortunately, the Lehigh Valley is changing. Good schools, safe neighborhoods and a nice place to raise kids will never go out of style but it’s going to take even more Austin, Boston and Brooklyn to attract the talent to win in the new economy.
If the millennials need a few more years to taste every IPA ever created, let them drink their beer here. Sorry, dad, you and the Florida retirees may be stuck propping up the diaper market while I wait patiently for grandkids.
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