The Crime Rate Perception Gap
There’s a persistent belief across America that crime is on the rise.
Since the late 1980s, Gallup has been polling people on their perception of crime in the United States, and consistently, the majority of respondents indicate that they see crime as becoming more prevalent. As well, a recent poll showed that more than two-thirds of Americans feel that today’s youth are less safe from crime and harm than the previous generation.
Even the highest ranking members of the government have been suggesting that the country is in the throes of a crime wave.
We have a crime problem. […] this is a dangerous permanent trend that places the health and safety of the American people at risk.
— Jeff Sessions, Former Attorney General
Is crime actually more prevalent in society? Today’s graphic, amalgamating crime rate data from the FBI, shows a very different reality.
Data vs Perception
In the early ’90s, crime in the U.S. was an undeniable concern – particularly in struggling urban centers. The country’s murder rate was nearly double what it is today, and statistics for all types of crime were through the roof.
Since that era, crime rates in the United States have undergone a remarkably steady decline, but public perception has been slow to catch up. In a 2016 survey, 57% of registered voters said crime in the U.S. had gotten worse since 2008, despite crime rates declining by double-digit percentages during that time period.
There are many theories as to why crime rates took such a dramatic U-turn, and while that matter is still a subject for debate, there’s clear data on who is and isn’t being arrested.
Are Millennials Killing Crime?
Media outlets have accused millennials of the killing off everything from department stores to commuting by car, but there’s another behavior this generation is eschewing as well – criminality.
Compared to previous generations, people under the age of 39 are simply being arrested in smaller numbers. In fact, much of the decline in overall crime can be attributed to people in this younger age bracket. In contrast, the arrest rate for older Americans actually rose slightly.
There’s no telling whether the overall trend will continue.
In fact, the most recent data shows that the murder rate has ticked up ever-so-slightly in recent years, while violent and property crimes continue to be on the decline.
A Global Perspective
Perceptions of increasing criminality are echoed in many other developed economies as well. From Italy to South Korea, the prevailing sentiment is that youth are living in a society that is less safe than in previous generations.
As the poll above demonstrates, perception gaps exist in somewhat unexpected places.
In Sweden, where violent crime is actually increasing, 53% of people believe that crime will be worse for today’s youth. Contrast that with Australia, where crime rates have declined in a similar pattern as in the United States – yet, more than two-thirds of Aussie respondents believe that crime will be worse for today’s youth.
One significant counterpoint to this trend is China, where respondents felt that crime was less severe today than in the past.
An Investing Megatrend: How Demographics and Social Changes are Shaping the Future
As societies evolve, demographics and social change also evolve, reshaping the world and resulting in new investment opportunities.
For millennia, people have found support and community through defining factors, ranging from age and race to income and education levels.
However, these characteristics are not static—and drastic demographic changes are starting to create powerful ripple effects in the 21st-century economy.
The Impact of Demographics and Social Changes
Today’s infographic from BlackRock delves into the significant impact that demographics and human rights movements have on global markets. Of the five megatrends explored in this series, demographics are predicted to have the farthest-reaching impact.
What are Demographics?
Demographics are the characteristics of populations that change over time. These include:
- Birth and death rates
- Education levels
- Income levels
- Average family size
As a result, major demographic trends offer both unique challenges and opportunities for businesses, societies, and investors.
The Biggest Shifts
What are the biggest shifts in demographics that the world faces today?
1. Aging Population
The global population is aging rapidly─as fertility rates decline worldwide, those in the 65 years and older age bracket are steadily increasing in numbers.
2. Future Workforce
As the population continues to age, fewer people are available to sustain the working population. For the first time in recorded history, the number of people in developed nations between 20 to 64 years old is expected to shrink in 2020.
3. Immigration Increase
Immigration has been steadily increasing since the turn of the 21st century. Primary migration factors range from the serious (political turmoil) to the hopeful (better job offers).
In particular, areas such as Asia and Europe see much higher movement than others, causing a strain on resources in those regions.
4. Consumer Spending
A steadily aging population is slowly shifting the purchasing power to older households. In Japan, for example, half of all current household spending comes from people over 60, compared with 13% of spending from people under 40.
How Does Social Change Play a Part?
Demographics are the characteristics of people that change over time, whereas social change is the evolution of people’s behaviours or cultural norms over time.
Strong social change movements have often been influenced by demographic changes, including:
- Ending poverty and hunger
- Expanding healthcare in developing nations
- Reforming education quality and accessibility
- Championing gender and racial equality
Examples of major human rights movements include creating stronger environmental policies and securing women’s right to vote.
Opportunities for Investors
These changes pose some exciting opportunities for investors, both now and in the near future.
Global healthcare spending is predicted to grow from US$7.7 trillion in 2017 to over US$10 trillion in 2022. To meet the demands of age-related illnesses, companies will need solutions that offer quality care at much lower costs—for patients and an overburdened healthcare system.
With a declining working population, adapting a workforce’s skill set may be the key to keeping economies afloat.
As automation becomes commonplace, workers will need to develop more advanced skills to stay competitive. Newer economies will need to ensure that automation supports a shrinking workforce, without restricting job and wage growth.
By 2100, over 50% of the world will be living in either India, China, or Africa.
Global policy leadership and sales of education goods and services will be shaped less by issues and needs in the U.S., and more by the issues and needs of Africa, South Asia, and China.
—Shannon May, CoFounder of Bridge International Academies
In the future, education and training in these growing regions will be based on skills relevant to the modern workforce and shifting global demographics.
Spending power will continue to migrate to older populations. Global consumer spending from those over 60 years is predicted to nearly double, from US$8 trillion in 2010 to a whopping US$15 trillion in 2020.
Demographics and social changes are the undercurrents of many economic, cultural, and business decisions. They underpin all other megatrends and will significantly influence how the world evolves.
As demographics shift over time, we will see the priorities of economies shift as well─and these changes will continue to offer new opportunities for investors to make an impact for the future of a global society.
Generation Rent: How Millennials are Fueling the Rental Economy
Today’s infographic explores how the millennial generation are fueling the short-term rental industry—is it a passing fad or a shift in buyer behavior?
It’s long been said that millennials have the power to disrupt and reshape entire industries.
Most recently, this effect has been seen in the retail landscape, where millennial spending habits are setting the tone for the market’s future.
Not only does the millennial generation demand the convenience of making instant purchases—but they can now rent almost anything they want, anytime, and anywhere.
Visualizing the Growth of the Rental Economy
Today’s infographic from Adweek takes a deeper look at the consumer goods rental economy, and the potential long-term impact of this shift in buyer behavior.
Although the current market for rentals is still in its early stages, the sheer momentum that the industry has gained in the last year is enough to threaten even the largest retailers—forcing them to reconsider their own business models.
The data for the visualization above comes from market research company Lab 42. In a survey of 500 people, they found that 94% of the U.S. population has participated in the sharing economy in one way or another.
While the sharing economy spotlight typically shines on global behemoths like Airbnb and Uber, the research used to populate this infographic focuses on renting consumer goods for a short period of time, as a sub-segment of the sharing economy.
The Renting Revolution
Offerings within the rental sector have exploded over the last decade, with furniture being the number one category that consumers rent.
According to the infographic, reasons for renting furniture include:
- Temporary housing: 45%
- Expensive upfront costs: 43%
- Testing products before committing: 41%
- Hosting events at home: 35%
- Moving into a new home: 29%
- Redesigning a house: 27%
Other products that consumers rent include gaming systems, clothes, tools, and technology. Female renters are more likely to rent furniture, clothes, and jewelry, while male renters are more likely to rent tools and gaming systems.
Renting goods is predominantly done on an as-needed basis. The Lab 42 report states that for clothing, 77% of respondents indicate that they either rent, or would rent for a formal event.
The End of Ownership?
Despite the common misconception that millennials are driven by emotional needs, the reasons behind why they rent consumer goods are much more pragmatic.
- Test things before purchasing: 57%
- Need a temporary solution: 55%
- Need an item or a service for a short time-frame : 52%
- Less expensive than buying: 43%
- More convenient than buying: 42%
Further, only 6% said that they rent because they do not like owning things. This tells us that the rental economy does not indicate the end of ownership, but rather, provides a strategy for consumers to try before they buy.
Attitudes Towards Sustainability
According to the research, very few millennials choose to rent consumer goods because it is better for the environment. However, Nielsen claim that 73% of millennials are willing to pay more money for sustainable offerings—impacting both retail and rental industries.
As evidence of this, Ikea will test a range of subscription-based leasing offers in all 30 of its markets by 2020 in a bid to appeal to environmentally conscious consumers and boost its sustainability credentials. If Ikea’s evolving business model is a success, it could open the floodgates for others to follow suit.
A Promising Market
In the clothing rental space, brands like Rent the Runway pave the way, but there has also been an explosion of startups entering the market in the last year.
One example is the monthly subscription service Nuuly. The company offers consumers access to over 100 third-party brands and vintage items. Consumers can borrow up to six items a month for $88. Similarly, American Eagle’s Style Drop program rents out the latest collections for a flat monthly fee of $49.95.
As more companies incorporate short-term rental services into their offerings, more millennials will shift their behavior from buying to renting—disrupting the traditional retail business model as we know it. With that being said, the impact of millennials having it all, and owning none of it, is yet to be determined.
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