Net worth of Americans aged 18 to 35 has dropped 34 percent since 1996: study
thehill.com
thehill.com
I know I graduated with $75k loans at 8% interest. Even with say, a $100k salary, just the interest eats ~7% of the income. With the total payments being somewhere around 12% of your income. Combine that with increased taxes over the same time and a 34% reduction in worth seems about right (if we account for the loss in compounding interest from buying a home, 401k investments, etc)
https://www.pewresearch.org/fact-tank/2017/07/31/gen-zers-mi...
Eh, millennials are a large population block. As a voting block, we're borderline useless [1]. And that's just voter turnout. The more important forms of participation--showing up to meetings--tends to show single-digit participation.
[1] https://www.census.gov/library/visualizations/2017/comm/voti...
https://www.vox.com/policy-and-politics/2019/5/29/18644145/v...
It’s swinging up. But participation rates—see the second chart in your article—are still abysmal. (I’m optimistic.)
It is hard to separate the youth vote - when it bothers to turn up, from the educated vote, as the majority of people with degrees are under 40
I think voting for our financial incentive has been obfuscated by the recent "authoritarian" vs "socialism" platform the Republican and Democrat have been pushing. We can't vote for what makes sense because we are voting on vague and diluted ideologies that will not find compromise. Even if I go out to vote, I can't vote for conventional fiscal responsibility.
At least when we had "political fluff" vs "extreme rhetoric" there was an opportunity to compromise and move forward.
Municipal elections are somewhat relevant.
[1] - https://www.npr.org/2016/05/16/478237882/millennials-now-riv...
EDIT: added source
"Feel free to ask minorities in cities for a century how their majorities worked for them"
That would be the "don't write it on a phone touch keyboard and try to abbreviate the sentence as much as possible" version.
We can vote for old farts. We just can't be elected.
Double think starts: But that isn't discrimination. Because it is legal. Instead it is called 'age of candidacy'.
I'll quote from the wikipedia:
"In the United States, a person must be aged 35 or over to be President or Vice President. To be a Senator, a person must be aged 30 or over. To be a Representative, a person must be aged 25 or older. This is specified in the U.S. Constitution. Most states in the U.S. also have age requirements for the offices of Governor, State Senator, and State Representative"
Also, let's be clear. Generally a Senator or Congressman has a long history of local public office before being a Senator or Congressman.
Young people are locked out of those offices until AT LEAST 30. That means, they start running for some small office in their mid 30s, to end in higher office at a much older age.
https://en.wikipedia.org/wiki/Age_of_candidacy_laws_in_the_U...
If you are one of the people drafting the Constitution, that you want to work forever, why risk it?
I searched for "teenage kings" and found https://www.history.com/news/6-child-monarchs-who-changed-hi... . Ptolemy XIII, from age "11 or 12": seems to have screwed things up. Fulin / "Shunzhi Emperor", taking power at 12, seems to have done a decent job. Elagabalus, becoming Roman emperor in A.D. 218 at 15, screwed up horribly. Pharaoh Tutankhamen, starting at "9 or 10", seems to have done well. Mary, Queen of Scots... I don't see much about decisions she made during her reign; she seems to have been trampled by more powerful enemies without it being obviously her fault. Baldwin IV of Jerusalem, from age 15: seems he did well. Incidentally, all of the above died in their 20s or younger (except Mary, who was locked up for life in her 20s).
So that's two screw-ups, three did-well, and one don't-know. The article says "who changed history", which means something significant happened, which might give us a biased selection—in many professions, the easiest way to do something very significant is to mess up something critical. I wonder if someone has made a more extensive and non-selected list.
Regarding this particular set, I also might say we should compare Elagabalus with other Roman emperors in the 200s A.D.—I'd guess there are other stinkers on that list... Looking at the others in the Severan dynasty... Elagabalus was succeeded by Severus Alexander (age 14!), who apparently did whatever his mother recommended, and seems to have done ok-ish (though the army grew to hate him and eventually overthrew him). Before Elagabalus was Caracalla, who co-ruled with his father Septimus (who did very well) starting at age 10 (!) and became emperor at 23 (technically co-emperor with his brother, but he had his brother killed that year), and was awful.
Hmm, interesting. Unfortunately the Severans after Septimus were all young, which makes it hard to tell between "the Severans being too young made them suck" or "the Severans after Septimus sucked". Let's look at another Roman dynasty... the ones after the Severan seem too short and interrupted by weirdness to judge... Let's try Flavian. Vespasian began the line, was a military officer before he was emperor, and did well; Titus, his son (age 40, also already a military commander), did well (until he died of a fever); Domitian, Titus's brother (age 30), seems to have been effective though possibly tyrannical.
It seems a main lesson from the first bunch of Roman emperors was, if the emperor chooses a successor for reasons other than "family", things tend to go well; if there is automatic inheritance, it tends to go badly. But it also seems to go along somewhat with age: Caligula became emperor at 25, Nero at 17.
It's possible that there's unexpected wisdom in the age-35 rule. Still... If someone had been tutored from a young age by great teachers (Alexander the Great was apparently tutored until 16 by Aristotle), then managed to gain a few years' experience running a large chunk of a mid-size company (perhaps by a parent bringing them along to meetings, having staff explain things, then having the kid do research and come up with his own proposals that he delivers in meetings, and ultimately grow into some CxO role) and, by all accounts, running it extremely well; and finally managed to rise to national prominence by, I don't know, identifying a national crisis and getting several companies to work together to fix it, and everyone who's interacted with him says he's great; and if he did this all by the age of 19, would you think he's a worse candidate than the last several presidents of the U.S.?
That's like saying that if a woman could pass the same physical tests as a man they should be able to do the same things as a man!
People who don't believe in discrimination are weird, they have all these concepts of equality.
I've meet people in their late 90s who have more wits than people in their 70s.
I've meet teenagers who were way wiser than adults.
I'm not sure why people are so afraid of letting things run on merit. Can things go wrong that way? Yes. But it's not like the other way is perfect either. And let's be clear, what you are advocating for is discrimination. I've found most people who advocate for that don't do so with intellectual honesty, they like to call it a 'requirement'.
In your opinion, at what age should we let people vote? Smoke? Drive? Sign contracts? Drink? Have consentual sex? Get married? Require them to be off their parents' health insurance? Permit catch-up retirement contributions? Allow tax-free withdrawals from IRAs? Allow claiming Social security? Etc.
Given what we have now, 18. Stupid 18 year olds you say? No problem they won't get elected. What if someone does? Well, then that person is clearly an extremely exceptional 18 year old and might be smarter than both you and I. Basically, meritocratic participation. I'm not sure how someone can argue against it.
Now, if you want to put in a requirement to have some level of public service experience before being president, that is not discriminatory, though it opens up a whole other can of worms - Personally I'm against this, but at least such a requirement would actually make sense in a meritocratic way, instead of just being silly ageist discrimination, which hopefully one day will be seen for being similar to other vile views like racism, sexism and classism.
The rest of your questions aren't really relevant to this point.
I disagree. We, as a society, discriminate on age in myriad structural ways because we believe that it is beneficial for both individuals and society as a whole.
Maybe there are exceptional 6-year-olds who should be able to smoke, drive automobiles, and collect Social Security. But I see no reason for our culture to permit them to do so, even if they landed a majority of the Electoral College.
We are talking about adults being treated like adults when it's in societies interest (pay taxes, go to war, go to jail), but not being treated like adults when it isn't (get elected) - This is an issue.
The issues you bring up don't cover this issue. These questions are a whatabboutism, bordering on trolling given the extremity.
Specifically, you are responding to the following comment, so any comment that is a sub of this comment is expected to be on topic, which you will see your smoking 6 years olds are most definitively not part of:
"Yeap, and legally enforced age discrimination means we can't actually take many offices. We can vote for old farts. We just can't be elected.
Double think starts: But that isn't discrimination. Because it is legal. Instead it is called 'age of candidacy'."
-----
Whatabboutims works like this: Person 1 says "adults are being discriminated upon so they can't be part of the political process"
Person 2 doesn't agree, but has no argument. So person 2 states "But what about children smoking? what about pensions? what about..."
Person 2 isn't (an many times can't) answer the point, so they try to highlight that some similar issue is happening in some other place in a way to undermine Person 1's position. But in the end... Person 2 isn't addressing the issue being brought up.
I thought those were no longer valid to be applied to huge swaths of people as it is discriminatory. I mean, not everyone who is part of a race or gender will have that correlation applicable to themselves.
Yes, some teenagers are dumb. Most. I was. But I've meet teenagers that are way smarter than I'll ever be.
I'm afraid many people view discrimination from a situational ethics point of view; it's only discrimination if it is the type of discrimination they don't like. Otherwise, it isn't discrimination.
https://www.cambridge.org/core/journals/perspectives-on-poli...
"Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence. The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism."
Reading this I assume it is rather caused by housing and food cost in metropolitan areas.
But certainly many urban areas have been very slow to match the right level and type of housing development for the needs of a growing population. The effects of building laws, zoning, political influence, rent control (particularly how it was done in 70s/80s), etc has a long recorded negative pressure on supply vs demand. So it’s very likely the wage differences aren’t sufficient for most people.
Note: one of my former landlord said he bought the property in the '70s we lived in for £25K, when he worked as delivery postman for £500/month. With living on his own in London, he bought the property after 6 years working for Royal Mail. Today, the median RML postman salary https://www.payscale.com/research/UK/Job=Postman/Salary is £18K (take-home pay is £1315/m), a 1-bedroom flat rental in the outskirts according to Numbeo (https://www.numbeo.com/cost-of-living/in/London) is £1215, without the utilities and council tax (which was £92/mo for me) The remaining £100 is enough for nothing. But even if let's say share the flat with an SO and split the costs, it is unlikely you can ever afford a 1-bedroom flat.
The same for my parents' case in Hungary ('90s). My mom was a PA, my dad a factory worker. They were able to buy a flat when they were 20, a year after my sister born. My wife parents (factory workers) bought a small house in a village when they were 19. Both family needed no financial aid from their parents. Both properties had an interest-free mortgage around the 30% of the property value.
I wouldn't compare that era with the current one , because neither my landlord, nor our parents could afford holidays abroad or a car. But neither had to worry about where will you sleep or whether your family can afford fresh, quality food if you have to find an other job.
When it comes to housing stock these past gov policies and local private+public development grants can have a long term impact on any city well beyond any decade.
The various building/zoning/etc policies are often long lasting: Prior land use could have been terribly inefficient from some half-failed social housing project, left to arson/deterioration of perfectly good buildings in Harlem in the 80s due to rent control and impossible-to-evict tenants not allowing renovations on the building. Plenty of middle-class & wealthy people keeping (now) expensive apartments under rent-control, reducing new development appropriate for that market and taking stock and taxes/income the area. Prior low-density developed areas can be locked down for decades due to elderly and other single-family homeowners staying for long periods of time. The well-covered complete lack of development of anything in-between a single-family houses and condo/office highrises in most cities also for decades. Etc, etc.
There's plenty of legacy decisions keeping housing expensive and highly inefficient.
Unless you're comparing San Francisco with East Bufu, Nowhere, living in a city does not cost 'extra thousands' a month.
The unemployment rate in the USA is at 3,6%. Small towns and cities would be deserted if they had no jobs.
Example: There are lots of small cities with openings for librarians, and lots of cities with openings for CNC programmers. It is far more difficult to find a small city with both, so insisting on that sort of two-income situation in a small city isn't going to go well.
The same goes for nearly any kind of skilled employment. The jobs are there, but you can't throw a dart at a map of America and expect to find two very specific job openings in one spot.
This may be one factor driving the urban-rural political split. Single-income families are different from two-income families.
Single income has very real consequences for both spouses (the one giving up work experience and the one being sole provider) and very real risks. It has consequences on familly dynamics and ressentments, especially when bad times hit and money are not to buy what both wants.
Moving wherever philosophy has also very real consequences on relationships and community that forms or rather does not form.
Perhaps it wasn't the greatest example. It's what popped into mind as a skilled job that isn't just software or finance. Maybe a better example would be a dermatologist, an air traffic controller, a fire investigator, or a civil engineer.
Dual income also has very real consequences for both spouses. It causes plenty of resentment. Typically the woman ends up doing most housework, even if the man intends to do half of it. That right there is a huge source of resentment. Risk of divorce goes up greatly if the woman earns more. Finding affordable child care and ensuring that it is never interrupted becomes a source of stress.
While it is relatively important for the small-city people to be prepared to move, it is normal to stay in one place. Job hopping is less common. Small cities also often specialize in an industry, with several possible employers, so staying put while changing employer is often possible.
The urban environment has its own very real consequences on relationships and community. Residents are typically renters who can find themselves evicted. Because there is such a large mass of anonymous people, relationships are throw-away from the start.
The risk of divorce with woman earning real money is in part larger, because she has that option. See, the spouse that did not worked for six years have hard time in job market which compels her to stay in bad relationship. Does not even have to be abusive, just a bad one. And I am picking woman here as example, because it is woman who areore often in that situation - and you framed comparatively must smaller female problem as example for some reason. I do more household work is less of a sux then "I would leave if my confidence was not so low and if I had real job options" sux. Divorces do not happen magically. They happen because someone decided it is best solution for their present situation.
The "I am earning money and she does not understand and just do nothing whole day" resentment is real too.
Relationships are not automatic. They require stubborn commitment. If you are planning for an exit, you're going to get one. It is certain that there will be conflict, and you're ready to hit the eject button at the first sign of it. Infatuation does not last, and is thus not a suitable foundation for a mature relationship. Responsible people of integrity do not plan to abandon their commitments.
You plan for divorce from day 1, you unsurprisingly get one, and then you can justify your planning because it happened. This is circular.
I dearly hope you are at least honest about your intentions, and that you pair up with people who are like yourself, and that you have permanent birth control. Anything else would be extremely cruel and selfish. I suspect you're leaving a trail of shattered lives, broken homes, uprooted yet spoiled children, and suicidal exes.
It just so happens that kids whose parents stay in bad relationship, whether verbally abusive or violent are not better off. It just so happen that these are more likely to appear when women dont have jobs.
Also, men dies and it is good to have the options in that case. Responsible people do not put themselves into massively vulnerable situation.
Lastly, it was you who tried to make it about women first by "in dual income men often don't pull their weight and therefore in marriage with such men it is better for her to have no income". I guess that assumption is that men who don't listen to her concerns when on dual income will somehow listen to them better in single income situation.
It is nearly certain that a relationship will be bad at times. Much of the reason for marriage is to make it difficult to run off one day when you are frustrated and angry. Problems can be resolved, but not if people give up early. Willingly accepting a state of vulnerability is both a demonstration of commitment and a way to help resist the urge to give up.
Death is why you buy life insurance. You can also buy disability insurance.
If you marry somebody and then find out too late that you don't like them, that is unfortunate. You made that mistake. You need to take responsibility for it. That other person made major life decisions based on your promise to remain until death. That other person gave up their alternative choices for you, and can not now go back to choose differently.
Lots of men really intend to pull their weight with chores, but it doesn't happen. I think this often comes about due to differing standards, not a refusal to listen to her concerns. If both will clean the toilet when they see it dirty, but her idea of "dirty" is a single spot (urine, stray hair, skid mark, etc.) while his idea of "dirty" is that the floor is sticky and the bowl scum is peeling loose in layers, she will end up doing the job. He would clean a dirty toilet, but he never encounters one.
When the reason partner have to stay with you is that she would be too poor otherwise, then it is not solved relationship problem. It is locked down person without freedom in bad situation.
> If you marry somebody and then find out too late that you don't like them, that is unfortunate. You made that mistake. You need to take responsibility for it.
Me taking responsibility for my part here is me leaving. It is also often because the other person makes mistakes and when other one refuses responsibility on them, it is not me. Whether abuse or simply partner who ceases to care about relationship (preferring friends, work, video games, hobby, whatever). That can happen with both genders and does.
Abuse escalates after marriage and after having children - precisely when it becomes harder for partner to leave. Abusers of both genders are not necessary stupid and can be very charismatic until they decide they don't need it anymore.
Same with indifference - the part when one decides checking out of relationship and ignoring partner effectively is good decision. Marriage should not be trap.
These are decisions partner made and may be result of them changing values (new friends, new ideology), they are not merely result of personality.
> Lots of men really intend to pull their weight with chores, but it doesn't happen. I think this often comes about due to differing standards, not a refusal to listen to her concerns.
Differing standards are solved literally by talking and listening to other side. She lowers hers a bit, he raises his a bit. When it is not happening, someone is not listening nor caring about relationship part here. There is the part where he cleans something because she has higher standard or because she asked. Or where he explains that he really thinks she is overdoing and she listen.
Frankly, I know only one man whose idea of clean floor is "sticky" or peeling scum. Not when somebody else is cleaning, not in hotel not in restaurant. I live in a culture that generally expect non sticky floors. The differences are not so much in opinions, but more of in habits and actions.
Marriage absolutely should be a trap. That is mutual. One enters into this willingly, partly as a demonstration of commitment and partly to help resist one's own urge to be destructive. Willingness to demonstrate a high level of commitment is one factor in obtaining a high-quality spouse. Fewer good-quality spouses will be available if you show signs that you are ready and willing to abandon your spouse.
Remember, you're supposed to stick around even if your spouse is drooling in a wheelchair and smells awful.
I think that this is not just a USA issue but it is also happening in all Occident. Student loans are just one of the reasons. But, it is bigger than that.
e.g. UK: https://www.ft.com/content/81343d9e-187b-11e8-9e9c-25c814761...
Most people won’t earn enough to pay a penny off the tuition - only the cost of living loans. Only the highest paid graduates actually pay tuition
https://media.slc.co.uk/repayment/qsg/how-much-do-i-repay.ht...
No, it does not, because the chart is weighted with CPI, which contains the housing cost. According to that chart, the millenials have the best living standards, but I seriously question the quality of the source, where the young adults take-home salary is above £15K, UK-wide.
I lean fairly liberal, but I think we can make significant strides with this issue in the US by simply changing what max interest rates are and how this interest compounds. The way things work right now truly feels like robbery when you're in the thick of it.
10% interest on a credit card would be pretty low for the US, AFAICT. Most first-time cards come with 23-24% interest, at least when I started searching for one.
[1]: https://studentaid.ed.gov/sa/about/announcements/interest-ra...
So an equivalent U.S. interest rate (using the fed rate and the same spread) would be around 3%.
2017: 33.4% of Americans (25+) have a Bachelors or higher
2007: 28% of Americans have a Bachelors or higher
1940: 4.6% of Americans had a 4+ year education (post high school)
You're right, college graduates are still a minority, but there is definitely a largely increasing. There's definitely more people enrolling than that.
70% of Americans will enroll in a 4 year degree but <2/3 of them will get a degree and 56% will drop out by year 6.Also Full-time students are 55% less likely to drop out of college than students who go to school exclusively part-time.[1]
So while college graduates are still a minority, it doesn't look like Americans who enroll in college are. They are clearly in the majority, and just because they don't graduate doesn't mean they haven't gathered debt.
[0] https://thehill.com/homenews/state-watch/326995-census-more-...
...and end up even worse off - they have the debt, but not the degree that could get them the higher paying job.
I'm guessing I'm missing something here?
I'd be dropping out of a 4 year course, after 6 years too.
How do US universities work with regards to this? In the UK you don't really need to pass anything to graduate. I've got a BA (Hons), the BA I got for showing up, the (Hons) indicates I actually passed something.
Second I would guess the vast majority of drop outs are within the first 6 months? How many people are going to waste 6 years for nothing?
In the US you have to maintain both satisfactory overall GPA to not be dismissed and pass a required set of classes (which may include a number of electives) in order to graduate.
But yeah, even though in many ways a home is a liability, it has equity you can leverage. In many countries, homeownership conveys other perks. In the usa, homeownership is also a strong sign of being a 'good neighbor' as you have skin in the game, while renters see little reward or penalty for being poor neighbors.
There are of course shades of grey and other factors, but in general, the modern marketing to milennials that homeownership is futile or worthless is partly its own downfall.
The core of the "bad investment" argument is that the money doesn't necessarily all get spent either way.
renters see little reward or penalty for being poor neighbors
"We have chosen not to renew your lease."
Yes but that is part of the problem with the argument: it basically assumes perfectly rational actors who never cheat contributing to their index fund so they can go do/buy whatever. It’s a lot harder to just not pay your mortgage one month.
It might pay off a bit if you can see it through, especially if you can then move to a lower cost-of-living area, but it's hard to tell 30 years in advance whether you'll be able to keep that commitment and if it will pay off better than investing in index funds or other investments. Certainly some people found out the hard way in 2008 it doesn't always work out that well. In general, it may sometimes slightly beat inflation if you're lucky but under-performs the stock market.
- https://www.investopedia.com/ask/answers/052015/which-has-pe... - https://www.cbsnews.com/news/history-says-home-real-estate-i...
Usually the argument against owning your home that is that inflation adjusted returns on real estate are not as attractive as investments in an index fund. In many, and I would argue most scenarios, that doesn’t really matter as the vast majority of people have minimal liquid net worth and renting eats up the cash flow that would allow them to accumulate wealth.
I bought my first and current home when I was 23 and refinanced to a shorter term. I bought near the 2006 peak and due to local market conditions have minimal capital gains, but in the near future will have no debt service costs whatsoever. That means the freedom to make less income, start a business, blow the money or accumulate cash or whatever.
Had I done the smart thing, I would have put 90% (or more, rents rose during the recession) of my current monthly mortgage obligation into rent. To the tune of $300k, allowing for fairly meager savings.
Now if I was sitting on a pile of cash that was a critical mass, and paying rent from my income cash flow, that’s different. But that is a much more rare situation.
assume home prices go up 5% and the stock market goes up 7%.
If I want to buy a house for 100k and put 20k as a down-payment and live in the spot for 5 years, I can make 8051$ off the stock market (invest 20k) but my home would have appreciated 27k$.
sure there are some other factors, and maybe my numbers are not right, but I think it gets at what you were saying, an advantage of buying a home is you can make a leveraged investment.
You also are limited to losing everything you put in, while leveraged investments can lose more.
Why can’t we become part of the community? I’ve been a renter for a decade now and I think I am more involved in my community via volunteering and local politics than the average person.
Further when I was a kid my single mom rented an apartment — during that time she worked to create a community at our apartment complex. When we moved there barely any one said “hi.” Now, almost a quarter century later she still keeps in touch with many of these old neighbors despite them being scattered all over the U.S.
Renting sucks, we both agree with that. But the trope about renters not caring about the community needs to go — it’s part of the reason apartments are illegal in the majority of California.
I've chased jobs for the last 15 years, moving to numerous states, several foreign countries, and for the last 8-9 years, about half a dozen different rental in the same metro area.
I have never been involved in my community, met neighbors, or gotten involved in really anything more than a cordial greetings to people I recognize.
I'd love to buy a house, but even the smallest condo in a decent area is $300k and as a contractor, I still have to often change work locations every year or more often. My commute might increase by an hour or more, each way, if I were unable to move close the work site.
I feel this is common for a lot of people these days, especially as marriage and especially children become less common. I have no incentive to be stuck in one place, and have done well to save a lot of money by being mobile and living frugally, without the trappings of typical suburban life.
https://www.cbsnews.com/news/moving-for-work-getting-increas...
If the person who owns your house decided to sell it tomorrow, how much protection do you have? Here in the UK, I have effectively none.
On the other hand, if you are renting commercial property for a business and have negotiated a lease, then the lease contract holds.
Geography determines school placements, what little league your kid plays in, who your local representatives are, etc. I don’t mean to cast tenants in a bad light. It’s just hard to have deep roots if you have to move frequently.
The places that are exceptions have rent stabilization or weak markets. Rental markets always devolve into little geographical cartels where tenants have no leverage. But we live in an era where we pretend it’s a real market and dislike regulatory frameworks.
Buying is not a guaranteed win.
It usually is in the long term: https://www.bloomberg.com/opinion/articles/2019-03-21/buy-a-...
"The official four-year graduation rate for students attending public colleges and universities is 33.3%. The six-year rate is 57.6%"
Accounting for that, a large majority of people attend college.
Surely this is a result, not a cause? You have to clear a substantial wealth hurdle to get a mortgage.
At that 75k loan, 8% interest, and 100k salary, if you pay 10% of your salary it takes you 11.5 years to pay off (and you pay almost 40k in interest >50% of principal).
Same numbers, but a 100k loan that goes to 20.25 years to pay off and you pay >100k in interest.
Though to be fair, if we put in the average student loan ($29800) and the average US household income (60309) we bring it down to 6.33 years and ~8k in interest (28% of principal). But it is unlikely that many college graduates are making the median household income as a fresh graduate. If we go to 40k/yr salary then it jumps to 11.5 years and 15k in interest (53%).
This also doesn't take into account that most of these loans are variable interest rates. Considering that, these numbers would put us on the lower side (of someone starting with an 8% interest rate).
Edit: spelling
[0] https://www.bankrate.com/loans/student-loans/how-long-to-pay...
Even if you understand the abstract math as a teen, it's a bit much to expect someone to make an informed choice about the reality of resolving it over years which they have no experience with, and in a job market that they have no experience with.
It's a high-pressure predatory system with long-lasting consequences that targets the vulnerable.
speak for yourself. I understand geometric growth quite well.
The 40th percentile household income is $50k. Live on that. You can thus put the extra $50k toward the loan, paying it off in less than 2 years.
This mostly depends on where you live.
We've shifted from a population that does not die old, starts working early, stops education early, and does most of its work in the primary/secondary (agri/manufacturing) economy where its most productive when young.
To automating those jobs and shifting to a world where we grow old, stay in school longer, have high returns on education in our tertiary service-based economic productivity levels, which gets us to be most productive in middle age, which also coincides with most of our investments in personal housing equity, retirement funds and paying down debt.
Not a huge surprise that if you take a few age cohorts, that a young one will drop in wealth, while an older one will grow in wealth. Our society lives and works longer, and prepares longer for this work in school, which has more individual-benefits and thus higher individual educational debts at a young age.
As such, I wouldn't be surprised if the wealth-hump didn't just move over a few years. Losing 1/3rd wealth within a certain age cohort (18-35) would be no surprise if half the wealth of 18-35 year olds was generated at 32-35, and this shifted to 35-38. I'd be most interested in seeing a graphical wealth distribution by age, for different generations, then you'd know if this was a story of decline, or a story of shifting the 'prime productivity' age by a few years.
That having been said, my post was mostly on a 100-year historic scale. Things haven't changed quite as much since 1996, but I think it's still mostly linked to the same forces.
The percent of people who have completed a 4 year degree has been on a continual increase.
This will drag down the net worth of young folks who give up working years and take on a debt load.
Because upvote and downvote seem like they would be opposites, it's not surprising that people might focus on the negative of "I agree with this comment" instead of the opposite of "this comment is helpful/insightful". The former is easier to measure than the latter.
That's not a rule on HN (unlike e.g. reddit), neither officially nor by user consensus.
People live close to 70 years, and the world changes a lot.
So many things that we took for granted 10 years ago are just mistaken now. Anyone wanting to be well rounded can’t stop learning when getting out of school, whatever school they went to.
Do they learn less by themselves, reading papers and lectures while having a good sense of the how society and the world works from an adult point of view ?
What would happen to someone who only focuses on work related education at school but keeps reading and getting lectures about whatever subject picks their interest ?
Wouldn’t they be in a better place than whoever spent crazy amount of money on a “well rounded” education and goes to the world with the impression they now know most of what they need to know ?
It should include a lot of math including a few semester of calculus, linear algebra, probability, etc.
Should be forced to take a few of the CE beginner courses like digital logic. And of course, learning low level OS development, networking layers, which includes C and assembly. Algorithms and some sort of numeric computing course using the learned math.
It wasn't until my last year where I had electives that I needed an IDE for dealing with high level languages and frameworks.
But I have a feeling that a lot of CS programs - especially those in lib arts instead of under the engineering schools - have really become watered down and glorified boot camp, and for several reasons.
* need more women and diversity to pass the program.
* colleges are addicted to the foreigners who pay full tuition. Who cares of half of them cheat, can't speak English, can't complete the work - they're paying $100k for that degree. And the smartest ones can be used as indentured servants in the grad school since they can't stay otherwise.
Anyway, when I do interviewing, I have noticed a decline in candidates even if they have a fresh CS degree. Many of them know things like React and Javascript, but are clueless with most of the subjects I wrote about above.
Then for instance Freud is still studied in philosophical classes, history as we learn it is so basic and biased that the most important parts (the ones that directly affect how we see the world and plan the future) need to be completely reviewed as an adult to have any acceptable grasp of where we are and where we go.
For instance what I learned about the cold war that still stands today could be summarized in a A4 sheet, and we spend a few months on it. The rest just turned out to be mostly propaganda, unbased assumptions and half truths.
Even going back to the greeks and the romans, actually learning about the subject gives a completely different impression that what we got at school. It might be because I'm an adult now, but then what was the meaning of these months spent on it ?
Basically I feel that subjects closely related to humans and society are not well fit for a 3 or 4 year generic program, to be almost useless if it's the only time someone study them.
It needs to age better because we tend to think we only get one chance to learn these things. If it was more of a norm to keep learning once in the workforce, there would be less question of making knowledge age, as it would be easier to keep it fresh.
On the other hand I think a 1 year or 2 year specialized course on a very practical subject to enter the workforce is a clever approach, as long a the person keeps learning about the other subjects (history, geography, philosophy, etc.) going along.
Statistics can measure this fairly easily. Just these particular statistics cited in this article do not.
However, the root of the argument is probably depressing. It is pretty unlikely that all the money spent on higher education produces a true positive return on investment (please do not cite any "college grads make more money" stats without controlling for co-variant effects). Most loans taken out to fund schooling are forms of malinvestment.
Anyway, entering into an investment fully knowing that you can’t expect any quantifiable return seems like a terrible thing to teach children.
It seems like there’s a combination of shame in talking about money, in being made to feel personally responsible for being in precarious financial situations (e.g. too much avocado toast!), and relatively easy access to consumer credit to numb things over. Or it’s just the “boiling frog” phenomenon where things get slightly worse every year due to everything getting a little more expensive but never sharply enough that it’d create a mass revolt.
Matches reality rather well.
It’s too bitter and now there’s some backlash.
That's only true if you define the term broadly enough to be useless. What about, say, anti-war demonstrations during Vietnam?
In a nation state, politics tend to be divided more on ideological and regional lines, because everyone shares an identity.
In a nation state, politics tend to be divided more on ideological and regional lines, because everyone shares an identity. There has never been a "nation" where everybody shares an identity in the sense discussed above.
A better example would be European nations like Hungary, which have reinforced their national identities in the face of the recent migrant crisis.
You can think of the whole cosmopolitan urban vs salt-of-the-earth rural aspect of American politics as one example. Or southern identity/culture. “As a veteran who served”/“As a parent”, or the cross-denomination “moral majority”— it’s all based around the idea that your lived experience as something shapes your political perspective and is intrinsically valuable to the political conversation.
And even Occupy: was occupy simply making a statement about economic politics or was it the identity of “the 1%” or “Bankers” vs the rest of Americans? These categories were somewhat arbitrary and basically represented which group you identified with.
Then the term "identity politics" shouldn't be applied. But even if we accept that extremely narrow view: there are numerous political segments that are notorious for doing what you describe across the political spectrum. Most notable the rural Scotch-Irish, often criticized for routinely voting against their self-interest and instead choosing to vote for pols who simply provide them cultural validation and do nothing to address their material concerns.
People used to be able to listen, understand, empathise and compromise with those that they don't agree with. Showing a due amount of respect for people. This has been sorely lost with the tail end of the Millennial generation, and it shouldn't be surprising that nothing of value is being accomplished at all imho.
I may not agree with all politicians, but there are some I feel that I genuinely respect. Those who lean on identitarian tribalism are not in the list.
* Force ever expanding identitarianism view
* Force corporations to align with their views
* Make anti-semetic statements while supporting other religions
* Seek to ignore the foundations of government and the press
* Work to displace government
* Are willing to use physical violence to accomplish their goals
?This is probably as true today as at any time in the past. What has changed, for the worse, is the definition of "other" identities (those that are not our own).
What did "rural america" mean to "city dwellers" in the 1970s? What does it mean now? I'd guess the definitions most of us carry in our minds have narrowed.
COINTELPRO happened with virtually no one being punished. Not understanding that it has and will happen again is to not learn from history.
The solution is simpler. If 18 to 34 year olds simply voted at the frequencies 45 to 64 year olds did [1], our views would form a block worth pandering to. Running as a candidate reducing pensions and alleviating student debt doesn't work because the former will vote you out of office in greater numbers than the latter will vote you in.
[1] https://www.census.gov/library/visualizations/2017/comm/voti...
Universities will just raise tuition to compensate. As they've been doing so far: https://www.forbes.com/sites/camilomaldonado/2018/07/24/pric...
Edit: Unless you mean allow that debt to be discharged through bankruptcy. Which probably would put downward pressure on tuition..
The "cost" of higher education is a sham; with no incentive to ever reduce costs, the cost will always rise to match incoming revenues. Meanwhile, student loans are a predatory mechanism where teenagers are encouraged to take on tens of kilodollars of undischargeable, unsecured debt. This combination has allowed the cost of higher education to grow out of control, backed by the cheap, subsidized credit of millions of Americans. Very reminiscent of the housing bubble, in fact.
My time as faculty is just the tip of the iceberg: the cost of the buildings and grounds, IT costs, academic and administrative support, and the costs to support research, let alone student services and things like admissions, career services, etc.
My father was an engineer that spent his retirement volunteering to teach computer skills to anyone who was interested. I will be retiring in a few years and I plan to follow in his footsteps, however humble my contributions may be. I would love to contribute to a change that would make high quality education available to many more people at a much lower costs, but as a long time participant in MOOCs, I am just not sure they are the way.
The implication here is usually that the amount of money they get from the state is insufficient to keep up with costs, therefore universities are forced to raise tuition. I don't think this is true. I suspect universities would raise tuition anyway, and if they got more money from the state, they would just increase their costs even more.
Alleviating debt and making it easier to pay more expensive loans incentivizes colleges to compete to attract students who can now affors higher price points
For example, School Yourself is the single best math program I've ever discovered on the internet: https://www.edx.org/course/introduction-algebra-schoolyourse...
Compare that to the Calc1 course from MIT on EdX as well. The algebra course engages you, helps you think through problems, and offers a customized learning path with a virtual tutor. The MIT course is just lecture and reading materials, it's not interactive, and it doesn't help you to discover the topics on your own in the same way that School Yourself does.
I desperately want to see a focused study program from an entity like EdX that takes a person from algebra to discrete mathematics using the model of School Yourself. I also want to see a similar course path for physics and chemistry.
Being a liberal arts major I wouldn't be where I am in technology today if it wasn't for friends, IRC, and places like EdX. I was willing to literally sift through hundreds of hours of content to get here though. Not everyone has that kind of time or interest, we need to make it easier for everyone to learn.
If we can just have a single platform that really focuses on bringing value to the individual and giving them a strong base to work from piece by piece, then we would have so many more mathematicians, physicists, engineers, programmers, etc.., all without crushing student debt. Imagine the innovation that we could realize!
[1] https://trends.collegeboard.org/college-pricing/figures-tabl...
I completed a Bachelor and Master degrees at a top 50 world-ranked university with an (Australian) government sponsored loan of, by graduation, around $30k USD, that I never would've had a hope of funding privately at that point in my life (or honestly any point after if I had never gotten the degree and hence a high-paying job).
My loan is not dischargeable through bankruptcy, and is repaid as a percentage of taxable income (~10% at the top tier), and not repaid at all if you earn below a threshold a few multiples above the poverty line. The "interest" is actually just inflation as the cash rate from the reserve bank is applied to the outstanding balance at year end. My interest last year was $800 AUD on a $40k AUD balance.
I disagree that the problem is specifically easy access to capital. There is a value in attending university; it creates an educated population which benefits everyone. I believe the core of the problem in the US is the lack of appetite for regulation and government intervention leading to a situation where the government guarantees private capital to fund things that they don't control the cost of. This creates a reason for the lender to discount the risk of the debt (because the government guarantees it by making it undischargeable) leading to capability for borrowers to get bigger loans. Universities quickly cottoned on and billed more for less, and the cycle continues until it (eventually) collapses.
The cost of degrees in Australia are easily regulated as the majority of universities are government institutions. There is one private university but the government loan limits are often not enough to finish a 4 year degree there so in reality only rich kids whose parents wish to buy them business connections attend.
I think it's the government guaranteeing loans to expensive institutions are the problem, not that people are getting degrees. Why remove all government loan assistance? Just stop giving it to people who want to go to private universities.
You can repossess a house or a car, but you can't repossess a degree.
If there was an option of cancelling a degree (either because of bankruptcy or user disatisfaction) this could perhaps work for vocational degrees or where the degree is 100% signalling.
If some kind of learning took place - how do you give that up?
Few are willing to risk their life when they ride around in their F150 picking up cheeseburgers, fries and a large drink for <$10 on the way home to watch the game… or whatever. That’s the real power of America that so many underestimate. You can placate 90% of the population with that alone.
Take away any ONE of those things the US will spiral into anarchy in mere weeks.
And no wonder. It's the lifestyle that billions of people in countries other than US can only dream of. A lot of them are risking their lifes to be able to live this dream.
https://www.thesimpledollar.com/why-you-should-consider-trad...
Second, 18 to 35 is sort of a crazy range, it seems to me, since the net worth of the group is likely going to be dominated by those in their 30s who are mid-career.
Lastly, it's unsurprising that those who began their career in the throws of the 2008 collapse were stunted, relative to basically any other group.
Agreed. The data can be skewed by more people going to college or grad school. Those people tend to not have much or any net worth.
And yet, it still
> has dropped 34%
If you break it down to two sub-demographics, I suspect there'd be an even larger disparity within e.g. 18-25 than there is with 26-35 for reasons such as student loans, but 18-35 would seem appropriate for what's perhaps an overgeneralized view of when most career trajectories and preferences plateau/harden.
Not sure if it's at all related to the key TV demographic of 18-34, but that wouldn't surprise me either for largely the same reason (hardening of preferences).
But I think that's kinda the point. People were previously building more wealth at a time in their lives when said wealth would have a more profound impact as they approached retirement age some number of decades later. The current generation occupying that demographic has been tragically stunted by stagnation in wage growth + inflation of education charges, and here in the United States, this may well impose a cascading detrimental impact on the health of the economy as a whole.
My point is exactly that I don't think it's likely that 18-25 would show an even larger disparity, since my suspicion is that the disparity is driven entirely by those who began their career during the Great Recession. 18-25 year olds, who began their career as the economy was heating up, wouldn't show the same. But I'd love to see the data to know if that's the case.
That's noticeable, but still not really as a big of a drop as 34% makes it sound.
Still not a huge drop in absolute terms, but the percentage is a lot worse.
That doesn't discount the article entirely, but I wish people would stop using misleading statistics for completely valid points. It really ruins your argument.
Don't get me wrong, 18 year olds are generally stupid (I was at that age), but blaming them seems like the kind of thing the profiteers from this mess would want. It's also not a very logical position. It's almost as if this type of idea would be something a propagandist would want to disseminate.
Coming from Australia, this really makes me cringe.
Fact is, most studies show that the returns on education in the US are quite high, higher than much of the rest of the world.
Where I am from (EU), you're not dissuaded to pursue a degree with low financial returns. My college fees are 10k in total for the entire bachelor+master's programme, and you can borrow 50k during those 4 years currently at 0% interest. I love it, but our returns on education are quite a bit lower than in the US because we subsidise things that don't work, or prevent it from failing, and incentivise people to study things they don't need or have no economic value. And it doesn't necessarily make the country better off.
I'm not saying economic value is the only metric that counts, there are other reasons why I'm in favour of pretty strong educational subsidies. But there's also benefits to the US system too that we don't have. And it's too easy to say the US is intentionally ruining the next generation, that's just not true.
If it follows that the interest should be higher on a more risky investment, then why are student loans (that are unforgivable) not essentially free? As they should be basically a zero risk investment since they follow the person around forever, through bankruptcies etc.
Training for a trade job is free of charge, too.
(Paid by the government.)
I got my education there and later joined a Silicon Valley company as an engineer.
I don't see this trend changing anytime soon without more fundamental change.
To clarify a bit: The photo doesn't seem to appear in the article itself, but in RSS feeds and on the article index.
I willing left the tech scene in order to pursue my passions and my net worth has significantly decreased.
It was the best decision I have ever made.
I used to hate getting up in the morning and was consumed with stress about trivial work bullshit. These days I work in the South Pacific and split my time between environmental projects and training new divers.
It's not going to make me rich, at all, but I honestly don't care. I would trade the decade I wasted in front of computer screens to have started doing this a few years earlier.
I suspect there are other economic forces at work to cause such a drop. I just can’t think of what they might be.
And thats after two major economy collapses.
Despite all odds against them, they dont give up, yet still get shorter stick.
Better link: https://www.washingtonpost.com/business/2019/05/31/millennia...
We have propaganda about things like this, but direct observation has been made over a number of decades and today's 55 year olds who will one day start collecting Social Security Retirement and/or begin benefitting more from their health insurance than they are paying in, are still not behaving very differently than 55 year olds at the time going back quite a bit into the previous century.
These are the 55 year olds who are still paying in to their respective Social Security and insurance plans, otherwise they would not be the ones that will receive significant benefits later.
Of course eventually as each individual reaches 65 and is eligible for full benefits, the true actual worth and buying power of those benefits has always been gradually declining.
To the point where you might have been better off without having these earnings immediately removed from your pay right off the top all along by the enforcing authorities.
And without having any need for a Social Security number.
The fundamental flaw with our Social Security is that the entire bureaucracy, infrastructure, business cash flow, collections & distributions is based on taxes on income rather than commerce.
Like a lot of things, but with SS it's even worse since only the lowest-income workers have their entire income taxed. As higher-earning pay levels are achieved, a decreasing percentage of earned income is taxed for SS purposes.
Regardless, with SS as one of the UBI systems with proven long-term functionality, it's too bad the full untaxed BI is still only universal for the 65 & over paid members in good standing, and only if they actually quit earning other income and truly retire.
And too bad it's not enough for a senior citizen to live on, so it's not up to quite basic levels but it's something.
This is because there are bigger tentacles that have been reaching into your pockets during your working years starting decades earlier in the 20th century than the FICA has been doing it.
If you do the math considering these resources, there is no excuse for not having gradually extended full benefits to much younger ages in a direct march toward full UBI. These have been the most highly productive hard working people in the most prosperous country in the modern history of my home planet.
Same with Medicare, it could have gradually reduced age of eligibility and achieved higher levels of health coverage for a more universal portion of the citizens far ahead of any less propsperous nation.
This all would have only required that an affordable portion of the resources were invested wisely to the advantage of the citizens from the outset, and only somewhat wisely at that. Markets can do amazing things, enough wealth was removed from working citizens before Nixon to have been leveraged to full UBI sometime between then & now, even using a no-brainer approach.
And when there's no excuse, you tend to get a lot of propaganda.
Even if you work for Apple, be careful about reality distortion effects.
Don't get me wrong. I think it's insane to have an education system this dysfunctional. I think some people get institutionalized and just kind of see college debt as how the universe works.
Single biggest purchase and wealth building instrument is buying REAL ESTATE / HOUSE.
Most millennials are not leaving on the streets homeless. They are paying high rent prices = money wasted = money that could have been going towards building their wealth long term, towards their homes.
High education costs prevented them from buying homes early which in turn impacted their net worth long term.
Simple example: If you buy a house in an average area when you are 30 - by 35 you have at least $50,000 that you paid towards your net worth (assuming very budget 1000/month mortgage).
Whats happening instead today? High housing costs and debt load from education prevent younger generation from bulding their wealth early through real estate. Something previous generations enjoyed.
We need more affordable housing, we need to change building codes and zoning laws to allow construction of affordable homes easily (that younger folks/families/singles can afford to buy). We need to build out infrastructure!
The idea that spending money to buy a home is “building wealth” is incredibly stupid. It’s bad advice for everyone but a real estate agent.
a home IS an asset and wealth. it is only a liability on volcano's path on big island/Hawaii.
An asset it something that makes you money, like rental income from rental properties, profit from a business or investment, stocks, or bonds.
A liability is something that costs you money. A house to live in, apartment, a car, healthcare, food, etc.
The home is an asset. Associated expenses are liabilities.
Assets certainly don’t need to make anyone any money; unsold inventory is an “asset” most firms would be happy to be rid of...
This is a very narrow definition not taught in accounting.
"Asset", "Liability", and "Net worth" are words with very specific meanings.
An asset is something that has value. (producing income isn't a requirement) A liability is an expense. An item can be both an asset (your home has a value) and a liability (the mortgage). The net worth is the difference.
Let’s divide the things that earn money from the things that cost money. Some of those things you can own. If they are a thing you own but cost money and you plan to consume it (house, car, food) it’s a liability. If they are thing you own that earns money or you plan on selling for profit it’s an asset.
A home could be an asset, but they usually aren’t. People don’t buy homes to sell them at a profit or rent them out, they buy them to consume/live in them (like a car). Thus they’re a liability. Most people buy a mortgage not a home, so no the house they live in is definitely not their asset. It’s the banks asset, and their mortgage is a huge liability.
A house, per se, is an asset. It may or may not have liabilities attached to it. (Or produce maintenance expenses, which is a different thing altogether.)
> If you own it and don't use or rent it, it can be a liability if it's not even a suitable investment vehicle (e.g. with stable or falling prices).
You seem to have confused a depreciating asset with a liability.