Changing Demographics: The Meaning for Advertising and Marketing

October 16, 2009

Presented toNorthern Illinois

American Advertising Federation

Presented byHealth Systems Research

1601 Parkview AvenueRockford, Illinois 61107

815/395-5639

An overview of demographic and social trends in the Rockford area.

Population growthDiversity – trends in racial and ethnic compositionThe economy, income, education and the developing underclassThe changing family environmentThe meaning for advertising and marketing.

2000 Census (2010 Coming!) 2005 – 2007 American Community

Survey 2005 American Community Survey Economic indicators Education indicators Social indicators

From 2000-2008, Winnebago County’s population growth was similar to the nation, greater than the state, but less than nearby “growth communities.”

Area GrowthUnited States 8.0%Illinois 3.9%City of Rockford 4.6%Winnebago County 7.8%Winn. County outside Rockford

11.4%Rockford Park District 6.3%Belvidere 27.1%Loves Park 21.6%Machesney Park 9.9%_______________

Source: Census Bureau estimates.

Rockford lost its position as Illinois’ second largest city to Aurora in 2002 and several other communities are moving up on us very rapidly.

City 2008 2000

Change2000-2008

Rockford

(3) 157,272

(2) 150,115 +4.6%

Aurora (2) 171,782

(3) 142,990 +20.1%

Joliet (4) 146,125

(5) 106,221 +11.5%

Naperville

(5) 143,117

(4) 128,358 +37.6%

Elgin (8) 106,330

(8) 94,487 +12.5%

Others: Springfield (6) 117,352, Peoria (7) 114,114

WINNEBAGO COUNTY HOME SALESYear Q. 1 Q. 2 Q. 3 Q. 4

2009 658 769

2008 837 1,367 1,167 844

2007 1,415 1,933 1,732 1,251

2006 1,385 2,001 2,038 1,616

Source: Illinois Association of Realtors

Average home price declined from $134,244 (Q1-2007) to $123,145 (Q2-2009), or 8.3%. However, the decline was less than Illinois (-20.5%) and the Chicago Area (-21.3%).

Rockford has increasingly annexed land, occupied much of that land and become less dense over the past 35 years.

The Green Communities Survey (2003-2004) revealed significant displeasure among local residents with sprawl and current development.

Commuting to the Chicago area doubled from 1990 (1.7%) to 2000 (3.7%), but still represents a very small part of employment for Winnebago County residents.

87% of Winnebago County workers are employed in Winnebago County, but only 35.8% of Boone County workers are employed in Boone County.

Commuting time for the average worker rose from 17.8 minutes in 1990 to 20.8 minutes in 2000, reaching 21.7 in 2008.

County

In-Migration From

Out-Migration ToNet

Migration

Number

Percent Number Percent2006-2007

Cook 1,502 12.3% 744 7.6% +758Boone 1,234 10.1% 944 9.6% +290Rock, WI 591 4.8% 625 6.4% -34McHenry 531 4.3% 195 2.0% +336Ogle 525 4.3% 565 5.8% -40Kane 522 4.3% 245 2.5% +277Stephenson

435 3.6% 294 3.0% +141

DuPage 391 3.2% 166 1.7% +225Other 6,480 53.1% 6,008 61.4% +472Total 12,211 100.0% 9,786 100.0% +2,425

AverageIncome

$43,000 $45,000

Source: Internal Revenue Service, Statistics of Income for 2006-2007

Winnebago County’s 72.5% home ownership level in 2005 - 2007 was improved over 68% in 1990; higher than the nation at 67.2%.

Black (40.2%) home ownership lags. Hispanic (60.8%), white (77.8%) and Asian (71.2%) are much higher. Hispanic has been rising. (2007 data)

AgeGroup 1980 1990 2000

2005-2007 2020

Under 5 7.4% 7.6% 7.1% 6.9% 7.1%

5-1722.2% 18.6% 19.3% 18.5%

18.2%

18-24 12.3% 9.5% 8.4% 8.6% 8.2%

25-4428.2% 32.3% 29.8% 28.3%

25.9%

45-6419.7% 19.3% 22.6% 24.9%

23.8%

65+10.2% 12.7% 12.7% 12.8%

16.8%

Median Age 29.6 33.4 35.9 36.4 38.1

Over the past five decades, the Rockford area has become increasingly diverse in terms of race and ethnicity.

In 1950, just 2.6% of Winnebago County residents classified themselves as nonwhite. By 2005-2007, one-quarter (24.4%) were nonwhite.

The diversity increase from 1950 - 2007 has been significant for several groups.

1950 – 2005/07 GROWTH

Race/Ethnic

Numerical

Change

Black +29,305

Hispanic +27,993

Asian +5,122

Race/Ethnic

2005 – 2007 20002000-2005/7

Change

No. Pct. No. Pct. No. Pct.

White 222,429

75.6% 220,817

79.3% 1,612 +0.6%

Black 33,187

11.3% 29,038

10.4% 4,149 +14.3%

Hispanic 28,440

9.7% 19,206

6.9% 9,234 +48.1%

American Indian 615 0.2% 584 0.2% 31 +5.3%

Asian/Pacific Isl.5,862 2.0% 4,795 1.7% 1,067

+22.3%

Multiple Races/Other

3,638 1.2% 3,978 1.4% -340 -0.2%

Total 294,171

100.0%

278,418

100.0%

15,753

+5.4%

Except for Hispanic, all races are non-HispanicSource: U.S. Census Bureau

From 2000-2005/07, Winnebago County grew by 15,753 from 278,418 to 294,171.

Net growth was primarily composed of additional minority persons.

Numeric Pct. of Race/Ethnic Group Change GrowthWhite +1,612 +10.2%Hispanic +9,234 +58.8%Black, non Hispanic +4,149 +26.4%Asian +1,067 +6.8%

From 2000-2005/07, growth was 80% minority.

Race/Ethnic

Winnebago CountyOutside Rockford

City ofRockford

Number

Percent

Number

Percent

White, non Hispanic

132,528

87.0% 91,515

62.5%

Black, non Hispanic

5,146 3.4% 29,187

19.9%

Hispanic 9,605 6.3% 20,528

14.0%

Asian 3,800 2.5% 2,083 1.4%Multi-Racial 1,132 0.7% 2,360 1.6%Other 177 0.1% 698 0.5%Total 152,38

8100.0

%146,3

71100.0

%

The City of Rockford and remainder of the County differ appreciably in their racial/ethnic makeup.

Race/Ethnic

City of Rockfo

rd

County exc.

Rockford

Percent in

Rockford

Black 28,537 5,102 84.8%Asian 4,489 2,269 66.4%Hispanic 22,937 8,100 73.9%

Population

154,128

146,124 51.3%

Rockford may have the seventh largest Hispanic population among Illinois cities.

Community

HispanicPopulation

1. Chicago 770,386 2. Cicero 75,8221 3. Aurora 63,091 4. Waukegan 49,3635. Elgin 44,4706. Joliet 38,8877. Rockford7. Rockford 22,97322,9738. Berwyn 20,5432

9. Bolingbrook 17,56210. Melrose Park 12,4852

12007 data.22000 data, 2008 not available.

Asians living in the Rockford area come from a variety of backgrounds.

Ancestry

Number

Percent

Laotian 1,176 24.9%Asian Indian

746 15.6%

Vietnamese

646 13.5%

Filipino 637 13.3%Chinese 451 9.4%Korean 443 9.3%Japanese 179 3.7%Other 496 10.4%Total 4,780 100.0

%

In 2007, only 43% of Rockford youth were white non-Hispanic, the majority were non-white. The older population 65+ is mostly white, non-Hispanic about 86% in 2008.

In fall 2008, only 38% of studentsin Rockford District 205 schools were white, 31% black, 22% Hispanic and 3% Asian.

Year(Sep

t. 30)

TotalEnroll-ment White

Black

Hispanic

Asian

Amer.

Indian

Multi-

Racial1

200826,95

0

10,22737.9%

8,255

30.6%

6,04022.4%

8623.2

%

340.1%

1,5325.7%

200026,04

7

13,34051.2%

8,184

31.4%

3,67814.1%

8003.1

%

450.2%

NotAvaila

ble1990

26,554

18,53469.8%

5,975

22.5%

1,2754.8%

7432.8

%

270.1%

198032,40

7

24,61375.9%

6,384

19.7%

8662.7%

3671.1

%

1770.5%

1Multiracial added as a category beginning 2004.Source: Rockford School District Fall Housing Report

Rank

1870 1910 1950 1990 2000

1. Sweden Sweden Sweden Mexico Mexico

2. Ireland Germany

Italy Italy Laos

3. England Italy Germany

England

Bosnia

4. Scotland

Russia Lithuania

Germany

Poland

5. Germany

England England Laos Italy

Rank

County 2007

2006

2005

2004 2003

Total

1. Mexico 170 262 267 344 136 1,179

2. Bosnia/Herzegovina

6 22 93 61 26 210

3. Philippines 41 40 33 19 24 1574. Vietnam 32 27 28 18 14 1195. India 15 12 28 21 35 1116. China 21 18 28 17 16 1007. Serbia/

Montenegro1

13 13 22 9 13 70

8. Poland 8 13 15 16 8 609. Laos 10 9 10 9 17 55

10. Korea 0 11 13 16 13 531Includes Macedonia

An emerging ethnic group in the Rockford area comes from the former Yugoslavia.

Using an ICE (INS) methodology, the number of undocumented residents is estimated to be:

County Number

Boone 3,237

Ogle 1,504

Winnebago 9,705

3-County Area

14,446

Minority populations will continue to grow and constitute a larger proportion of the population.

“Hispanic Wave” continuing, though immigration may be slowing. Hispanic community established

Minority birth rates are much higher than white, non-Hispanic.

Young minority populations, median ages – white (40.8), Asian (32.0), black (27.3), Hispanic (25.7).

At the current growth rate, the county will have nearly 55,000 Hispanics by 2020 or one-sixth of the projected county population.

YearHispanicPopulatio

n1990 7,7712000 19,2062006 28,4402010 (est.)

37,752

2020 (est.)

54,470Source: 1990-2006 Census Bureau2010-2020 Health Systems Research

Household size declined from 1960-2000 due to lower fertility, declining marriage, more persons living alone, but increased after 2000 with the Hispanic influx.

WINNEBAGO COUNTYAVERAGE HOUSEHOLD SIZE: 1960 -

2005 - 2007Year Household Size2008 2.632000 2.531990 2.571980 2.761970 3.171960 3.31

Source: Decennial Census, American Community Survey

Category2005-

07 2000 1990 1980

Total Households 100.0% 100.0%

100.0%

100.0%

Married couples with children

20.9% 23.0% 27.0% 33.0%

Married couples w/o children

30.3% 29.3% 29.9% 30.8%

Female single parents 8.3% 7.6% 6.8% 5.7%

Male single parent 2.3% 2.4% 1.6% 1.0%

Elderly living alone 10.0% 9.6% 9.5% 8.0%

Others living alone 18.0% 16.7% 15.0% 13.4%

Others/group quarters 10.2% 11.4% 10.1% 8.1%

Family Type

Winnebago

CountyRockford

City

In family households

73,795 37,695

Married couple 64.6% 52.3%

Male single parent

7.2% 8.5%

Female single parent

27.7% 38.7%

Non-family household

0.1% 0.1%

Grandchildren 5.4% 5.7%

Race/Ethnic

MarriedCouple

SingleFemale

Grand-Parent

White 73.2% 14.0% 4.0%

Black 26.5% 49.5% 12.2%

Hispanic

60.7% 16.8% 5.8%

Asian 80.7% 6.8% 4.3%1Updated information not available

Unemployment fell to 5-6% in recent years, but has risen to August 2009 - Rockford 16.9%, Winnebago County 15.2%.

The MSA has lost about 15,000 manufacturing jobs in the past decade and remains prone to severe cyclical swings, especially as housing and auto demand varies. Manufacturing fell from 33,000 to 30,300 in the past year.

Second highest manufacturing proportion (25%) among larger counties in the nation (2004 ACS).

New jobs being created are primarily in the services sector, but service jobs with lower wages and often without benefits are replacing manufacturing jobs.

Rockford industries have increasingly lost local control.

Few corporate headquarters; no large firms have headquarters here.

Rockford area needs to add professionals to “balance the community,” maintain tax base.

“Largest employer” list is dominated by service industries such as education, health and government. These are sectors where we “tax ourselves.” They do not, in general, bring in dollars to build the economy.

Many major basic industries have had a pattern of declining jobs over the past decade.

Rank Employer Employ

ees Type

1. Rockford Public Schools 3,730 Service

2. Rockford Health System 2,972 Service

3. Wal-Mart 2,750 Service

4. SwedishAmerican Health System 2,373 Servi

ce

5. Hamilton Sundstrand 2,165 Basic

6. Winnebago County 1,839 Service

7. OSF St. Anthony Medical Center 1,807 Servi

ce

8. Rockford Park District 1,739 Service

9. Daimler-Chrysler 1,600 Basic

9. United Parcel Service 1,600 BasicSource: Rockford Area Economic Development Council

Though educational attainment for high school grads among persons 25+ is relatively typical, we lag in college graduates.

Rockford must compete against communities like Naperville where 64% have a Bachelor’s Degree.

Only 72% currently graduate from Rockford high schools. (70% black, 65% Hispanic) – 2008 Report Card.

Race/EthnicGend

er

Entered 9th Fall 2003

Graduated

June 2007

PercentGradua

tedWhite, non-Hispanic

Male 628 353 56.2%Female

570 374 65.6%

Black, non-Hispanic

Male 497 157 31.6%Female

508 246 48.4%

Asian/Pacific Islander

Male 44 27 61.4%Female

34 25 73.5%

HispanicMale 214 94 43.9%Female

220 106 48.2%

Total 2,718 1,386 51.0%Source: Fall Housing Report 2003

ISBE Graduates 2007

PERCENT MEETING OR EXCEEDING STANDARDS

High School

2008 2007 2006 2005

Auburn 38.9% 38.1% 50.9% 51.4%

East 23.7% 23.9% 30.5% 22.7%

Guilford 38.3% 46.1% 46.6% 52.1%

Jefferson 28.2% 29.6% 34.9% 41.3%

District 33.6% 36.4% 41.8% 42.9%

State 52.5% 52.6% 54.3% 54.9%

Source: ISBE, Prairie State Achievement Examination

The Rockford Area continues to trail the state and nation in residents with a Bachelor’s Degree.

Year

City ofRockfo

rd

Winn.Count

y Illinois U.S.

2005 - 2007 (ACS)

18.8% 19.9% 29.0% 27.0%

2000 (Census)19.8% 19.4% 26.1% 24.4%

Persons 25 - 34

2000 Census

21.0%

2005 - 07 ACS

20.2%

Educational Attainment

UnitedStates

Winnebago

Differ-ence

Less than 9th grade 6.5% 5.4% -1.1%9th to 12th grade, no diploma

9.5% 11.0% +1.5%

HS Grad (includes GED) 30.0% 35.0% +5.0%

Some college, no degree

19.6% 20.8% +1.2%

Associate’s degree 7.4% 7.9% +0.5%

Bachelor’s degree 17.1% 13.3% -3.8%Grad or professional degree

9.9% 6.7% -3.2%

Percent HS graduate or higher

84.0% 83.6% -0.4%

Percent bach. degree or higher

27.0% 19.9% -7.1%

Source: American Community Survey

GENXers (ages 25-39 with college degree) comprise 1.2% of our population compared to 2.2% for the nation.

Rockford metropolitan area per capita personal income (PCPI) as a percent of the U.S. PCPI has been on a continuous downward slide for the past decade.

PCPI includes all wealth, not just earnings - but also dividends, interest, government programs.

YearPercent

ofU.S. PCPI

2007 81%2000 91%1997 97%1994 101%

Only two Illinois metropolitan areas had a lower per capita personal income than Rockford for 2007.

MetropolitanArea

Per Capita Personal Income

Chicago $44,346Peoria $38,189Decatur $36,433Quad Cities $36,208Springfield $36,150Bloomington-Normal

$35,371

Rockford $31,232Kankakee $29,196Danville $27,141

Population GroupPoverty Percent2005-07 2000

All Persons 13.6% 9.6% Under 18 20.8% 12.9%

Under 6 25.1%Seniors 65+ 7.1%

White, non-Hispanic 8.4%Black 39.6%Hispanic 25.2%Not High School Graduate 25.0%Families No child 3.1% 1 – 2 children 13.4% 3 – 4 children 28.4% 5+ children 41.7%Single parent families 44.3%

DEFINITION: Pupils age 3 to 17, inclusive, from families receiving Public Aid, living in institutions for neglected or delinquent children, being supported in foster homes with public funds, or eligible to receive free or reduced-price lunches. Free lunch is available if household income is below 130% of poverty, reduced price lunch under 185%.

GroupPercent

Low Income

District 205 71.5%

State 41.1%

High Schools 61.8%

Elementary 72.7%

PERSONAL INCOME SOURCES: 1995 - 2007

Source 2007 1995

Earnings 66.6% 69.8%

Dividends, interest, rent

16.2% 17.4%

Transfer (gov) receipts

17.2% 12.7%

Total 100.0% 100.0%

Occupation

WinnebagoCounty United States

2005/2007 2000

Change

2005/2007 2000

Change

Management, professional

27.8% 29.7% -1.9% 34.1% 33.6% +0.5%

Service17.1

% 12.9% +4.2% 16.6% 14.9% +1.7%

Sales & office25.8

% 26.7% -0.9% 25.8% 26.7% -0.9%

Farming 0.1% 0.2% -0.1% 0.7% 0.7% ---

Construction 7.5% 8.6% -1.1% 9.8% 9.4% +0.4%

Production, transportation

21.7% 22.0% -0.3% 12.9% 14.6% -1.7%

Nearly one in five persons are enrolled in Medicaid and related programs.

About 45,000 Winnebago County residents receive food stamps.

Poverty rose from 9.6% in 1999 to 13.6% in 2005 - 2007.

Some elected officials and community Some elected officials and community leaders have contended that expansion of leaders have contended that expansion of our social problems is being driven by our social problems is being driven by “people from Chicago” coming to Rockford “people from Chicago” coming to Rockford because the social services system is so because the social services system is so good. Is this true?good. Is this true?

Little evidence, mostly anecdotes about “people from Chicago.”

Of course people are coming from Chicago. Cook County has 5.3 million, so certainly many come this way and Rockfordians move to Chicago. In other times, we would be proud that individuals are moving here.

Movers tend to be low income, unemployed renters, those in poverty move more often.

Virtually all Illinois communities blame “Chicago” for social ills, supposedly because of their excellent social services. However, services are similar in all larger communities.

Why would low income persons choose the community with the highest unemployment?

These problems are our own – low educational attainment, crime and a declining economy.

Believing that social problems are generated by “Chicagoans” is counter productive, keeping us from improving locally and seeking solutions.

Blaming social services comes at a time of increasing needs and reduced support. A strong set of services is essential.

46.3% of births are to unmarried mothers, continues to rise.

9.2% of births are low birth weight, 15.4% of black births.

Over half of births are paid for by Medicaid.

Population slowdown, but continued higher minority proportions.

Declining income, property values, tax base.

Growing underclass, high social service needs.

Lower income shoppers are the fastest growing income group in the Rockford area and nation.

In total, growth is outpacing higher income households.

Compared with other groups, budget-constrained shoppers:

Shop more frequently, but spend less per trip

Switch retailers and brands more often

However, lower-income households are not homogenous, but quite diverse. Young adults, single parents, elderly,

Hispanics, Blacks

Rockford is in a severe downward slide.

Underclass continues to grow, no “transformation” in the short term.

Selling to or servicing the population may require a shift in thinking toward the reality of our populace.