Will Millennials Ruin the Marriage Business?
Young adults - the so-called Millennials - are getting married at much lower rates than any previous generation. If the current trend continues, more than 30% of Millennial women won't be married by 40, almost twice the number for Generation X women, according to a recent Urban Institute report.
The drop in the number of marriages and weddings could have a deep business impact on the wedding industry, affecting everything from restaurants and catering halls, to hotels, airlines, and countless other industries that serve the marriage business. If these are just marriages being delayed due to the economy or changing social norms, then it will be just a bump in the road. But if these Millennials choose to not get married at all, it will dramatically alter the business prospects for the hundreds of thousands of Americans who make their living helping others enter and celebrate matrimony.
What is happening and why?
Young people are getting married less often for two main reasons. The first is that the recession ushered in an era of financial caution. Weddings can be expensive, and in uncertain economic times, they are not a great way to spend money.
If the current rate continues, only 69.3% of women will marry by 40. If the number bounces back to pre-recession rates, however, it could rise to 76.8%. For men, the corresponding numbers would be 65% and 72.6%.
The second reason fewer young people are getting married may not change simply because the economy is improving. More people are living together without being formally married, and the stigma associated with that has faded. Neil Howe, an economist and the author of several books about Millennials, told CNN Money that some young people feel the need to be established financially before getting married. Not being wed, however, has not stopped couples from buying homes together -- or having children.
"The shift is the shift in the role of marriage in one's life," he said.
Owning property and having a child with a significant other can create many of the same legal bonds and responsibilities as marriage. Beyond that, things like making medical decisions, passing on your estate, and parenting issues can often be dealt with through a lawyer. If you remove those problems from the equation, marriage -- at least in the government-sanctioned sense -- is really just a technicality.
How big is the wedding industry?
American weddings are a $51 billion industry that employs nearly 800,000 people, according to a report from market-research firm IBISWorld in June 2013. The future of that industry lies in whether this is just a temporary shift in priorities due to the recession or an overall change in how people view marriage.
The research company believes that the trend will be short-lived and that the market will rebound.
During the past five years, many economic and consumer trends acted against the Wedding Services industry. High unemployment reduced budgets for weddings and led to postponed nuptials, and individuals returned to school during the downturn. In addition, longer engagements, cohabitation before marriage and a higher average marriage age all became more acceptable, pushing the marriage rate down. Although some of these trends will linger, nuptials that were postponed will finally be planned and consumer spending on weddings will grow.
Weddings that are being delayed for economic reasons will eventually happen. But it's possible that while the number of people getting married will recover, the amount spent on weddings won't bounce back as quickly -- if at all. The recession has in some ways made Millennials more cautious than generations that came up during periods of economic success.
If you've lived through not being able to find a job and having to move back in with your parents, it's likely you will treat money differently than a generation that experienced easier success. That could lead to more modest weddings and less borrowing to make them happen.
The economy and changing social norms certainly won't stop some couples from wanting to tie the knot, but it could lead to others deciding it's not needed. The real change will be long-term if American pop culture stops fetishizing weddings. If Millennials make marriage less of a big deal, then perhaps their children won't grow up dreaming of "their big day." If weddings become reasonable affairs, then perhaps the marriage industry will not recover.
It seems unlikely that people will quickly abandon the notion of getting married -- if only because it's the easiest way to legally sanction a union between two people in the government's eyes. It's not crazy, however, to believe that spending tens of thousands on a wedding may become less common. Weddings are a bad investment, and bad economic times may have permanently made younger Americans less likely to make those.
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