American kids, teenagers, and young adults, aged 8 to 21 years, have annual incomes totaling $211 billion, according to latest projections based on results of a nationwide survey of the Generation Y population by Harris Interactive. The survey suggests this group is spending at a rate of approximately $172 billion per year and is saving at a rate of $39 billion per year.
Interestingly, 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 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.
“There are more than 57 million individuals in the 8-21 age group, and their influence on the consumer economy is immense,” said John Geraci, vice president of youth research at Harris Interactive. “Generation Y’s needs and opinions drive many adult purchase decisions, and they, literally, represent the future market for most consumer brands.”
The study results indicate that youth income is down over the past year, but spending is up. “This shows that this age group has been willing to forgo savings in order to keep their spending levels consistent,” said Geraci. “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.”
Fifteen percent of youth spending is done online, a percentage that remains consistent across the 8-21 age range. However, boys remain more comfortable with e-commerce, as they spend 1.7 times as much as girls do online.