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What Do All Those Well-Off Millennial Renters Do, Anyway?

Consultants, managers, and marketers lead a cohort of younger adults who would rather rent than buy in the city.

One of three high-rise apartment buildings planned for Wolf Point   Photo: John J. Kim/Chicago Tribune

After I wrote about how well-off millennial renters are the biggest demographic in the Cook County housing market, someone asked me: What do all these people do, anyway, to afford such nice apartments?

I started with the American Community Survey. Six industries had median incomes above $70k in 2014. Overall, employment change in those industries has been positive, and the industries with positive growth shouldn’t be terribly surprising—health care, computer and mathematical occupations, and management.

Jobs Paying More than $70,000

Occupation Number of jobs in Cook County
Legal occupations
2014 median income: $105,088
 
35,347
 
34,782 (-1.6%)
Management occupations
2014 median income: $78,467
197,495
200,674 (+1.61%)
Computer and mathematical occupations
2014 median income: $77,745
 
51,229
 
61,031 (+16.06%)
Law enforcement workers including supervisors
2014 median income: $76,448
 
22,565
 
21,428 (-5.04%)
Health diagnosing and treating practitioners and other technical occupations
2014 median income: $74,832
 
57,696
 
70,466 (+18.12%)
Architecture and engineering occupations
2014 median income: $73,334
 
29,929
 
28,571 (-4.54%)
 
 
2009    
 
2014
Source: U.S. Census Bureau

I also looked at employment change in industries where the median income is less than $50k in 2014. (A side note, but a telling one: they weren’t the same industries in 2009. In 2009, Construction and sales had median incomes over $50k in 2014 dollars; in 2014, they had median incomes below $50k.) Employment fell precipitously in construction, office and administrative support, and production. It wasn’t all bad news—employment in transportation grew substantially—but the ACS data suggests a decline in lower-middle income workers.

Jobs Paying Less than $50,000

Occupation Number of jobs in Cook County
Sales and related occupations
2014 median income: $48,637
176,102
166,225 (-5.61%)
Installation, maintenance, and repair occupations
2014 median income: $46,513
 
48,612
 
45,118 (-7.19%)
Construction and extraction occupations
2014 median income: $45,485
 
72,296
 
54,490 (-24.63%)
Health technologists and technicians
2014 median income: $45,027
 
22,537
 
22,770 (+1.02%)
Community and social services occupations
2014 median income: $44,418
 
30,940
 
30,905 (-0.11%)
Transportation occupations
2014 median income: $41,456
 
51,589
 
66,145 (+22.01%)
Fire fighting and prevention, and other protective service workers including supervisors
2014 median income: $41,012
 
25,391
 
25,953 (+2.17%)
Office and administrative support occupations
2014 median income: $39,520
245,694
232,459 (-5.39%)
Production occupations
2014 median income: $32,304
131,581
119,308 (-9.33%)
Healthcare support occupations
2014 median income: $29,733
 
26,307
 
31,067 (+15.32%)
Material moving occupations
2014 median income: $29,325
 
44,336
 
45,056 (+1.6%)
Building and grounds cleaning and maintenance occupations
2014 median income: $26,768
 
60,350
 
57,237 (-5.16%)
Farming, fishing, and forestry occupations
2014 median income: $26,119
 
1,738
 
1,409 (-18.93%)
Personal care and service occupations
2014 median income: $25,595
 
40,154
 
44,522 (+9.81%)
Food preparation and serving related occupations
2014 median income: $23,345
 
64,824
 
68,749 (+5.71%)
 
 
2009    
 
2014
Source: U.S. Census Bureau

But that doesn’t account for age, obviously. For that, I used the powerful IPUMS (Integrated Public Use Microdata Series) database at the University of Minnesota’s Population Center to slice up the numbers for millennial renters in the city of Chicago.

First, how many people in this age group are choosing to rent versus buying? I looked at people ages 25-34 with 2014 incomes of more than $75k, $100k, and $200k, via the 2014 American Community Survey, as compared with similar groups from 2009 (adjusting income for inflation).

2009, $68k+ 2014, $75k+ 2009, $91k+ 2014, $100k+ 2009, $181k+ 2014, $200k+

63%

47%

68%

55%

66%

76%
 
Owners    
 
Renters

The number of these high-income 25- to 34-year-olds is down overall (though it’s more of a wash if you don’t adjust the incomes for inflation). But dwelling habits have changed; a majority go from buying to renting, except at the top of the income bracket, where the most well-off millennials are more likely to buy than rent.

This seems to line up with what Chris Hagan and Daniel Kay Hertz have observed: In some of Chicago’s wealthiest neighborhoods, lower-density apartment buildings are being torn down for single-family homes or luxury condos. Meanwhile, reasonably well-off but not wealthy younger adults are opting to rent, creating a market for the kind of high-end transit-oriented development John Greenfield writes about in Streetsblog today.

So what do these millennials do to make so much money? Again, I queried the IPUMS database, using the 2014 and 2009 ACS data. Here’s what 25- to 34-year-old renters with individual (not household) incomes of $68k or more, again adjusting for inflation, were doing in 2009. I limited it to occupations with about 1,000 people.

Occupation Total employed
Lawyers/Judges 3,870
Securities/Commodities/Financial Services 2,553
Computer systems analysts 1,530
Management analysts 1,450
Marketing and sales managers 1,275
Sales reps, services, other 957

Now, from the 2014 ACS:

Occupation Total employed
Management analysts 2,532
First-line supervisors of non-retail sales 1,718
Sales representatives 1,634
Marketing and Sales Managers 1,557
Misc. managers 1,557
Computer software engineers 1,386
Lawyers/Judges 1,328
Production/planning clerks 1,019

First, there are now more occupations representing 1,000 or more renters, because there are more renters. And the changes seem to reflect broader economic trends. There are way fewer lawyers—in 2010, Crain’s reported that “a parade of notable law firms in Chicago has laid off attorneys in the midst of the recession.” There are more management analysts—in 2013, Crain’s reported that “it’s a good time to be in the consulting business.” Marketing and sales managers held strong—last year, Forbes reported that “Chicago is still known as the place for finding the geniuses of the consumer packaged goods marketing sphere.”

Based on the ACS data at least, Chicago’s spate of high-end apartment development doesn’t seem to be coming so much from more well-off younger adults, but from changing preferences in the housing market. If the Emanuel administration’s planned downtown zoning changes go through, they’ll have even more options closer to the city center, where 90 percent of its job growth came from 2002-2014. What remains to be seen is if the city can lock them in as residents, whether or not they’re renters.

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