Lets shape an economy that values connection over consumption

[Music]

[Applause]

what happens to an economy

when its people retire and begin to

consume less

it’s a silly question if the economy is

tied to

banking like in luxembourg or oil like

the united arab emirates

but here in the united states of america

more than two-thirds of our economy is

tied

to how much people consume

like wallpaper ripped off an old

plastered wall

the covid pandemic revealed what it

really looks like when people stopped

consuming

how do we know well all economies

measure their value or their worth by

totaling up the cost of everything

produced or consumed within their

borders

this is what we call gdp or gross

domestic

product and our gdp declined by 32

in the months that surrounded the

pandemic induced economic shutdown

it even tipped us into a recession all

because

people began to consume a little bit

less

but the shutdown revealed a hidden crack

behind that wallpaper

a glimpse into yet another consumption

crisis

right around the corner the graying of

the u.s

economy you know what we’re talking

about here right like some people call

this the silver tsunami

others call this the gray wave or the

silver wave

we prefer our term grey economy because

well it has the word economy in it

but we are all talking about the same

thing

the aging of the us consumer into

retirement

my name is neely taminga and if economic

data were nutrition

i’d be a nutritionist the company i

co-founded

distill advises ceos and boards about

consumer behavior

all through an economic lens i have been

researching

and writing about consumerism for more

than half my life

and as nerdy as i can get into the

details and data

i have found that personal experiences

truly do spark the best insights

so when i was a little girl around the

age of 12

i used to love to hop on my bike and

ride into the center of the town i grew

up in called webster groves missouri

there in the center of town stood this

ben franklin

five and dime store known for its

endless aisles of candy

before it hop on my bike i’d be at home

scraping together this like sweaty wad

of coins and cash amounting to five

dollars before stuffing them in my

pocket

on those trips my economic reality was

five dollars and my life’s priority was

to purchase

all the swedish fish my money would

allow me to buy which was a lot back

then

because when i was a kid it was one

penny per fish

kids are not getting as much these days

for their five dollars i’ve calculated

it because i

am nerdy like that they’re paying 1.3

cents per fish

the point of the story is this all

consumer purchases

yours and mine begin with an economic

reality

and a life stage priority let’s consider

together how these

realities and priorities shift as we age

at 12 it’s five dollars in candy at

22 it’s a little more than five dollars

and candy becomes beer at 32

it’s a lot more than five dollars and

candy becomes a really cool car

at 42 you’re making some good money

but candy starts to become whatever your

mate

wants to remodel in that home you just

bought in the burbs

and at 52 you’re making some of the best

money of your career

but you also have some of your biggest

bills as you

seek to put kids through college

possibly pay for big weddings

it’s also an age where you begin to look

out onto the horizon

and contemplate your retirement as you

watch your parents

live out theirs and at 62 you find

yourself at that doorstep of retirement

and there’s a single but significant

calculation that greets you

in the form of a question before you

decide to step through that threshold

at which age do you begin to take social

security benefits

now at a lower amount or later at a

higher amount

whatever you decide that amount

basically remains fixed for your

remaining years on this blue earth

as a child or as an adult

all consumer purchases begin with an

economic

we can only spend what we think we have

in our pockets or what we think we’re

going to have in our future

when we’re early in our adult years we

tend to think of our income potential

as one with an infinite horizon which

just feels boundless optimism and

sometimes boundless consumption as we

seek to keep up with the joneses

but as we near those retirement years

that horizon becomes a little bit more

finite

and pragmatism sets in as it turns out

there’s math that supports the shift in

mindset

in research findings by our firm we

uncovered a chilling statistical

relationship between social security

benefits

and retail sales now retail sales is

this commonly monitored measurement of

our economy

it’s part of the consumption component

of that gdp we talked about earlier

we found that as social security

benefits begin to

accelerate like a foot on a gas pedal

going faster and faster

retail sales begin to decelerate about a

year later

like another foot pumping on the brakes

as consumers age into this economic

reality of retirement

they begin to spend less in the economy

think of it this way if you’re 52 and

you’re still working

you don’t even think twice about picking

up the tab to a really big family dinner

at a really nice restaurant

but if you’re 72 and you’re no longer

working

you might have to think twice about

picking up that tab because your budget

your income

it’s fixed see

as consumers age into this new reality

and their mindset shifts from optimism

to pragmatism

retail sales consumption our economy

are all connected and affected retail

sales

consumption our economy are all

connected and affected the pandemic

induced economic shutdown

proved that to be an undeniable truth

yet here we are with another consumption

crisis right around the corner

the precipice of great economy with the

aging of the us consumer into the

retirement years

each year we see a steady growth in the

number of people aging into the

retirement years

we’re here in the year 2020 and 20 years

ago

we had 40 million people aged 62 and

older

10 years ago that 40 million grew to 47

million

do you know how many people are aged 62

and older this year

66 million people

66 million people that’s a 65

increase from 20 years ago 66

million people that’s the entire size of

the population in the united kingdom

look around you one in five people

are either in or very near retirement

and this

is growing there are more people turning

62 in the next two years here in the

united states than history has ever seen

before

the baby boomers are aging into

retirement

which means the baby boomers are aging

into a new economic reality

a simple but seismic truth retirees

report lower income

and they spend less money our research

found that when we compared folks

age 65 and older to those that are age

55 to 64 reported income was 18

lower and not surprisingly spending was

less it makes sense work less

have less spend less okay

so more people are aging into a new

economic reality called retirement

with a fixed and lower income and

therefore they’re consuming less and

spending less

big deal big deal the health

of the us economy is built on people

buying things

and spending money on services from

homes to health care food to gas

clothes to phones travel to baseball

games goods and services

our nation’s identity is shaped by how

much people consume

so what happens

to a consumer driven economy

when so many more of its people begin to

retire

and consume less can the economy grow

while consumers gray

we don’t know the precise answers to

these questions this is a

very new chapter in u.s economic history

but it will repeat itself again with the

aging of the millennials so

we would be wise to contemplate our

economic future

try to get it right with the aging of

the baby boomers

what we do know is that for the past 70

years

it’s been a codependent relationship so

goes the consumer

so goes the economy

the grading of the u.s consumer

is really an economic identity crisis

revealed

we are highly dependent on consumption

we cannot reshape our economic identity

our gdp

overnight it’s not possible overnight

perhaps we need a new one like banking

is for luxembourg or oil is for the

united arab emirates

maybe we do need a new dominant driver

say like manufacturing or some

technological version of that until we

get there

we can gently guide our individual

consumption identities

to one that is mindful choosing

quality over quantity buying products

intended to last spending money where

there’s really meaning

or spending on services that we truly

need

as individuals searching for our own

identities

maybe we need to think a little bit less

about keeping up with the joneses

and more about connecting with the

joneses

caring for the joneses being kind to the

joneses

maybe if we saved or invested more

during our working years we could then

spend more in our retirement years or

even better

invest more in the generations that

flattening the curve of consumption

while building a more sustainable

economy along the way

what if we bought a little less candy

a little less beer a more pragmatic car

a slightly smaller home hosted

meaningful not

showy weddings chose gap years to go

learn a trade and earn money before

heading off to college in order to

reduce our dependence on debt while

there

small moments of individual discernment

can pay big dividends in the future

here’s what i want for us

let’s be a people that shapes an economy

not an economy that shapes a people

the consumer has proven that they’ve

been in the driver’s seat of this

economy

for the past 70 years so let’s shape it

together get in a more pragmatic car

and drive

as individuals let’s choose an economy

that evolves from placing value on its

citizens

solely by how much they consume into one

that values how

they consume mindfully

with future hindsight with the kind of

wisdom that only a 62 year old

at the doorstep of retirement can offer

thank you

thank you very much