Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

ENTRY #381: The future of religious institutions is being influenced by three factors over which the institutions have no control. These exogenous variables directly affect the near and long-term financial viability of many such institutions:

  1. Changing membership demographics, especially less favorable attitudes by younger generations toward religion
  2. Downward pressure on family discretionary income from multiple sources
  3. Migration to more electronic communication, in part because of sustained concern about large gatherings post coronavirus

The pressures will intensify in the coming years. Without some fundamental strategies to address the effects of these pressures, many religious institutions could become financially insolvent and forced to dissolve. Further the pressures are not specific to one or two religions. All religions are likely to be affected.

Demographic Pressure. There are numerous articles and studies (Pew Research, e.g.) indicating younger generations are less attracted to religions of all types. The younger generations also attend services less than previous generations at the same age.

When viewing the data, some believe that as younger generations age they will act more like their parents and grandparents, thus “adopting” much of the behavior of previous generations. By adopting attitudes and behavior of previous generations, these younger cohorts, therefore will become more favorable to religion and more supportive of religious institutions.

The clergy and the “Board of Directors” of a religious institution should not make the assumption re “adopting behavior.” One only needs to track age cohorts over time to realize younger age cohorts do not adopt the attitudes of their parents’ generation when they reach the same age.

Rather than adopting behavior, empirical evidence suggests cohorts “retain” attitudes and behaviors established in their early twenties. Some examples of “retaining” values range from attitudes of different generations toward such social issues as use of drugs, casual sex, age for marriage to preferred brands of vehicles to preferred style of house and furniture. One only has to ask “What happened to the appeal of darker-wood furniture as well as fine china and crystal with the generations under age 40″ to realize tastes and preferences are different?[1]

Pressure on the Revenue Stream.  Since roughly the mid-1960’s each succeeding age cohort has been faced with increased pressure on discretionary income[2]. Every religious institution should assume one or more of these pressures on discretionary income will continue, thereby making it more difficult for families to provide financial support. Pressures are:

  1. Medical costs increasing faster than income
  2. Housing prices (and rents) increasing faster than income
  3. College tuition increasing at a rate much faster than inflation and income
  4. Retirement savings burden being transferred to employees as employer-funded defined-benefit retirement programs have been eliminated

The economic pressures caused by each one of these factors probably could be managed by most families. However, when the increases in all factors are combined – each one has a similar pattern of costs outpacing income – the result is a significant erosion in discretionary income.  

A real-world example of the impact of these pressures was evident during a recent PBS News Hour broadcast. An ER- vehicle technician in New York City described the mental and economic pressures associated with the coronavirus. The interviewer asked the ER technician about salary – about $40,000 per year. As anyone familiar with the cost of living in any of the NY boroughs, $40k for a family is tight. Worse for the technician was that his employer, apparently a contractor to the City of New York, did not provide health insurance.

Here’s the guy taking people to the hospital to get treated for coronavirus (or some other emergency) but who does not have employer-paid health insurance. Even worse the technician can’t afford private health insurance because the Trump administration eliminated many features of Obamacare and eliminated insurance exchanges.

Housing Prices/Monthly Rental. The chart is for price increases of houses and rent compared to growth in median income, adjusted for inflation. While the data are national, people living in some metro areas have faced the problem of housing prices-HOA dues/rents and insurance rising even faster than noted on the chart.

Real estate taxes are also increasing. Although relatively low compared to NY/NJ/CT, housing costs and taxes in many areas are still high and a further erosion of discretionary income.  These costs result is less money available for contributions to a given institution.

College Costs. Since the 1960’s, early 1970’s tuition at public and private colleges has more than doubled as a percent of family income in inflation-adjusted dollars. Costs for elite universities have increased even faster. Even with some assistance, overall costs for higher education are likely twice as high as a percent of family income over the past couple of generations. The impact of the coronavirus may make the disparity worse. Tax revenue in virtually every state has fallen dramatically. To balance future budgets states may need to cut support for higher education.

End of this entry. More next week about the impact on contributions of: (i) technology replacing jobs; (ii) retirement savings shortfall; (iii) electronic “competition” from other religious institutions.

[1] For more analysis of “adoption” and “retention” please download paper I wrote at University of Michigan in 1987 titled “A Nation in Transition.” The paper addressed how differences in attitudes between pre-Boomer and Boomer cohorts could affect how America would view its role internationally. The paper included a comparison of a variety of attitudes. (87 12 08 Nation in Transition) 

[2] Discretionary income is the amount of an individual’s income left for spending after paying taxes and paying for personal necessities, such as food, shelter and clothing. Discretionary income includes money spent or allocated to luxury items, vacations and non-essential good/services, including contributions.