Generation Y article

February 3, 1997

The Next Big Population Bulge: Generation Y Shows Its Might

By MELINDA BECK
Staff Reporter of THE WALL STREET JOURNAL

Call it "the piglet in the python."

A population burst unlike any since the heyday of the baby boom has entered the American system. And although its members are still children, their impact on business and society is already immense.

Companies that sell toys, videos, software and clothing to kids have boomed in recent years. Nine of the 10 best-selling videos of all time are animated films from Walt Disney Co. Club Med, the French vacation company, now earns half its U.S. revenues from resorts that cater to families. Last fall, many schools across the country reported severe overcrowding; in New York City public schools alone, there are 44,000 more students in kindergarten through third grade than there were five years ago, an increase of nearly 17%.

And this is just the beginning. It is this generation that will determine how -- and how well -- the baby boom will live in their old age. Indeed, the tastes, habits and beliefs of this group -- call it Generation Y -- will reverberate through American culture well into the next century.

The annual number of U.S. births started rising around 1980, ending the baby-bust years. In each of the years from 1989 to 1993, U.S. births exceeded four million for the first time since the early 1960s. Today there are roughly 57 million Americans under age 15 -- and more than 20 million in the peak years between four and eight. Many of their parents, born during the waning years of the baby boom, helped to remake America's social, political and economic institutions. And though Generation Y is much smaller than the baby boom, which lasted nearly 20 years and produced 78 million children, its members are plentiful enough to put their own footprints on society.

"Technologically, this generation is going to make the Gen-Xers look like fuddy-duddies," says Frank Gregorsky, a 41-year-old social historian at the Discovery Institute, a Seattle think tank. He predicts that within five years, members of Generation Y will be producing term papers with full-motion video. "They're on fast-forward," he says.

Generation Y was born into a world so different from the one their parents entered that they could be on different planets. The changes in families, the work force, technology and demographics in recent decades will no doubt affect their attitudes, but in unpredictable ways. Among those changes:

Nearly 60% of children under the age of six have mothers who work outside the home, compared with just 18% in 1960. * Some 61% of U.S. children aged three to five are attending preschool, compared with 38% in 1970.
Nearly 60% of households with children aged seven or younger have personal computers, according to IDC/LINK Resources Corp., a market-research firm in New York.
More than one-third of elementary-school students nationwide are black or Hispanic, compared with 22% in 1974. If current trends continue, "minorities" will make up the majority of the U.S. population by 2050, according to the Census Bureau.
Approximately 15% of U.S. births in recent years were to foreign-born mothers, with origins so diverse that more than 100 different languages are spoken in the school systems of New York City, Chicago, Los Angeles and Fairfax County, Va.
Nearly one of three births in the early 1990s was to an unmarried woman. With approximately one in three marriages ending in divorce, that means a significant portion of this generation will spend at least part of childhood in a single-parent home.
One-quarter of children under age six are living in poverty -- that is, with cash income of less than $15,141 for a family of four.

Generation Y is also growing up largely untroubled by the threat of nuclear war, in contrast to the Cold War tensions and air-raid drills of the boomers' youths. But in other, more immediate ways, children today are less innocent and insulated than their parents were -- though, at the same time, less independent. Because of their exposure to the media or, increasingly, because of personal experience, young children now know more about guns, drugs, homelessness, mental illness and job insecurity. Many city schools have metal detectors at their doors. "You have young people, especially in urban areas, worried about being shot at the bus stop," says Carol J. De Vita, senior research demographer at the nonprofit Population Reference Bureau in Washington. "Whether that threat is real or more like the air-raid drills were for us, it still weighs on their minds. And that fear has spread into suburban areas."

It troubles parents, too. Today, most don't feel comfortable letting kids hop on a bike and take off for points unknown. Instead, many urban and suburban parents turn to indoor playgrounds. "Getting lost in a maze, and finding your way out, is really exciting. Psychologists call it 'safe risk-taking,' " says Steve Duesbury, national marketing director of the Discovery Zone Inc., the chain of 210 indoor playgrounds, which is currently operating under Chapter 11 bankruptcy protection. As the peak of the boomlet has moved out of the sandbox years, Discovery Zone has added after-school activities and is testing a program called Night Zone, with fog machines, to appeal to older children.

Generation Y will also never know a world without computers. Global conversations -- even chess games -- over the Internet will bring distant cultures close. What's more, they won't even realize how remarkable that is. "This generation views computers as basic equipment, like pencil and paper, not something to be feared," says Larry Mondry, executive vice president of merchandising for CompUSA, a computer retailer.

Furthermore, Mr. Mondry says that innovations that seem like gimmicks >from "The Jetsons," such as using computers for instant video communication and to control the functions of the home, will be commonplace for this generation. "My son is seven, and the other day he asked me what videos I liked to watch when I was his age," Mr. Mondry says. "When I told him they hadn't been invented then, he was dumbfounded."

Generation Y is also driving the educational-software industry, which has grown to a $600 million business from practically nothing in 1990. Titles like Baby-ROM from Byron Preiss Multimedia Co. are designed to help infants as young as six months learn to identify numbers, shapes, colors and body parts.

The same boomer compulsion to give their kids an educational edge is fueling the booming business of "educational playthings," sold by national retail chains like Noodle Kidoodle and Zainy Brainy. Such stores tend to shun violent or licensed products and stress multimedia learning. Brian Lynch, vice president of operations at the Learningsmith, a chain of 36 stores based in Cambridge, Mass., says the motivation for the company was "quite frankly, the belief that consumers can't spend enough time with their children, and when they do, they want it to be something that will help them go to Harvard."

Like their parents, the members of Generation Y seem destined to be pressed for time. The afternoons and weekends that many baby boomers spent "just hanging out" have now been taken over by chess clubs, soccer leagues, tennis lessons and tae kwon do. Diane Novick, owner of Creativities in Ridgefield, Conn., which sells craft materials, worries that with so little free time, kids today don't have enough opportunity to experiment, get messy and invent new things. "Creativity takes time, and that's something this society has lost all conception of," she says.

At least this generation is reading and being read to. Publishers have responded with an outpouring of titles and series for young readers; annual sales of juvenile books have more than doubled, to $1.4 billion, since 1987. "We have babies in here, and one-, two- and three-year-olds coming to our story hours," says Maureen Golden, vice president of merchandising for Barnes & Noble Inc. Ms. Golden says that for this generation, bookstores have become what local libraries used to be, while libraries are becoming more like college resource centers.

Apparel manufacturers from Ralph Lauren to Gap Inc. are also targeting the Gen Y crowd, which infinitely prefers jeans, sports jerseys and baseball caps to dress-up clothes. Auto makers are courting their parents with minivans and sport-utility vehicles, many with built-in child seats. Hotels and cruise lines are offering kids' programs. Some malls, furniture stores and even supermarkets provide on-site baby-sitting. Restaurants are setting out crayons, putting changing tables in restrooms and offering more take-out services, all to serve families with children.

About the only sector of society that didn't react quickly to the arrival of Generation Y is the education system. Many demographers are amazed that school planners did not see the wave of children coming and start planning for their arrival years ago. But many communities that built schools for the baby boomers in the 1960s converted the buildings into senior centers or condos in the 1970s and '80s.

In affluent Westport, Conn., for example, where school enrollment has nearly doubled since 1987, residents are locked in a bitter dispute over whether to reclaim an old school that was converted into a town arts center. Urban areas have had even more trouble accommodating Generation Y. In Dallas's Vickery Meadow neighborhood, blocks of sprawling apartment complexes were built in the 1970s for twenty-something baby boomers. Now those boomers have moved on to bigger quarters, and have been replaced by mostly low-income minority families -- a total of 4,000 kids, without a single library, park or school. "There's really no place to play," says a resident, Rosa Lopez, as she watches her four-year-old son and two friends run through a stairwell.

The gap between the haves and the have-nots of Generation Y is already wide, and in areas like technology and education, that could have a dramatic impact on the nation's economy in the 21st century. The former U.S. Office of Technology Assessment estimated that it will take more than $50 billion over the next five years to provide a multimedia computer for every seven elementary school students, the ratio some experts say should be the minimum. Although such an investment is unlikely, Education Secretary Richard W. Riley notes: "These young people represent the work force of tomorrow -- the very people who will be working to support the baby boomers in retirement."

So far, they are off to a promising start. Trend forecasters say that besides being technologically adept, this generation is growing up environmentally conscious, achievement-oriented and far more tolerant of differences than their parents were. As toddlers, they loved the sweetness of "Barney." As they've grown, they've embraced cuddly low-tech toys like Beanie Babies and Tickle Me Elmo and been far more active in political projects for youth than the Gen-Xers were. "As they come of age, they will be team players and they will look for ways to solve big national problems collectively," predicts generational scholar Neil Howe.

All in all, Generation Y is growing up "as good scouts," says Mr. Gregorsky of the Discovery Institute. "You can already see the beginnings of a generational shift: Teenagers aren't as angry as they used to be, and the generation right behind them shows much less hostility, much less nihilism."

What sort of world will these savvy, sociable preschoolers create in the 21st century? At this point, it's hard to see that far around the millennial corner. Members of Generation Y could easily live beyond the year 2070, which will make the 1990s seem like "The Flintstones."

--Louise Lee contributed to this article.