Data and graphs showing millenials' bad economic odds
washingtonpost.com
washingtonpost.com
There have been no breaks. Nothing has been easy. I don't really know what true success looks like... I struggle and by the skin of my teeth (and now my family's teeth) and the hits just keep coming. We have a house, but I literally fought for it with every ounce of effort I had and got extremely lucky.
This is our version of success; we enjoy rays of sunshine from the eyes of hurricanes.
It's a bit challenging these days for a lot of people.
Laugh, and sob quietly into your pillow at 3am.
Looking back each year just thinking "You had no idea what was in store and weren't completely ready, do better".
At this point that timeline is now in months.
Wealth doesn't necessarily disperse. See simulation by Norvig:
https://nbviewer.jupyter.org/url/norvig.com/ipython/Economic...
This did happen more or less during the great recession - private equity companies (ie colony capital, blackstone, etc) raised specific funds and created corps to buy foreclosed housing and rented them out.
However, typically they will want to realize a liquidity event (sale) which is why sometimes those homes were rent-to-own. Since the market picked back (thanks to the fed for buying trillions in mortgage backed securities), they were able to sell in a good market. So usually want to sell your investment at some point to realize some capital gains, not hold forever.
Two opposing forces (outside of supply / demand) will drive pricing:
> how much the fed buys in mortgage backed securities
> the economy being strong enough to raise real wages of home buyers so they can buy expensive homes
Given that the fed bought assets so aggressively in such a short period of time (raising its balance sheet from ~$4.5T to $7T in H1 of 2020) in response to covid [1], my bet is that housing prices will not come down as long as the fed is run by boomers (they can't afford to have their net worth go down bc they are also economically fragile).
[1] https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
They probably did fail to move us forward, socially and in terms of long-term large-scale planning and saving (on the scale of nation-states, I mean—welfare fund-building and other things that ought to have happened in the “good times”) but it’s not like there were 200 years of people dealing with a similar situation before them.
Millennials are entering their 40s. Their adult lives have been filled with Black Swan events which says those aren't Black Swans but the new normal much shittier swan.
So not only did Millennials have to start from behind they keep getting hit with externally imposed crises that make it extremely difficult to get ahead. Germane for a lot of HN Millennials, housing prices in areas with tech companies are insane and even a Boomer Great Dying isn't going to help get a toehold in real estate.
The people bidding up housing are millenial techies.
Mark "young people are just smarter" Zuckerberg is a millennial.
That being said, I do think our generation will start taking political power soon-ish (decade maybe?) and policy will shift toward larger safety nets being the norm(1). My hope is that because of what we’ve seen, our future politicians will write policy accordingly.
(1)Totally open-minded to the fact that this might be wishful thinking.
You have a house, while in the past it was easier, overall home ownership is something only 32% of our age group accomplished. 65% of all US residents will ever accomplish.
More importantly - you have a family! So far, I’d say you are doing great!
Can it be easier? Sure. However, while my own path hasn’t been rosy, I wouldn’t trade it - it makes us who we are and will make us more resilient in the future. Keep up the good work and never despair!
Also, another perspective on the growth. If your starting point is lower, it’s easier to grow by a larger percentage point. US in the 1980s was a pretty great place to live and consumption was already high. It’s that much harder to beat that (or even maintain).
But doesn't every generation have a once every decade recession?
Though ours is accompanied by two major expenses (housing education) rising way faster than inflation.
The more relevant discussion is wealth inequality in general across generations. Plenty of broke boomers too.
I am a young Xer, almost an old millennial, kind of on the cusp. I've wondered if this is a cognitive artifact of my age in the 90s, teens to 20, but I have asked older and even a few younger people and many have also expressed nostalgia for that decade. Boomers and much older Xers often agree.
My teens were rough anyway. It was not my personal best decade, but I would go back in a second... not necessarily literally but definitely to the zeitgeist.
I find myself unable to describe the optimism of that time to people who were not of age during it. The best I can do is encourage people to watch some old Star Trek TNG. You couldn't even write that today. Dark edgy music and culture was in, but that was an artifact of the optimism. Nobody wants a Nine Inch Nails or early Tool now because the world is darker than the music. Pretty Hate Machine would be journalism, not harmless cathartic emotional escape and fantasy.
For my money the optimism ended decisively on 9/11. The shift was incredibly deep and profound. We have never recovered, though a rally was attempted in the late oughts. That rally crashed into resentment driven identity politics; the alt-right and its fellow travelers or "cancel culture" on the other side. Superficial optimism doesn't stick and won't until we get past 9/11 and all it seemed to mean. The terrorists won.
It's all in our heads.
Digging out is going to be tough though because the shift was profound and deep. I don't think we can go back. That's not exactly what I'm saying. What I'm wondering is if we can go forward.
Going forward always involves a bit of going back. Some of the 90s optimism was resurrected 60s optimism. But it also involves invention of new things.
You and I are in agreement - that day set the tone for America's future in:
* economics - on his way back to the fed reserve in NYC via helicopter in autumn 2001, Greenspan saw the rubble of WTC and decided to drop the fed funds rate, and it eventually hit 1% in 2004, which is why asset prices (real estate, stocks, bonds) are so high today and why we had a housing boom during that time (2004-2008)
* international policy - never ending war on "terror" (not that they decided on "terror" bc when you have a war on a country, you can define the end of the war; a war on "terror" can go on forever bc you can redefine "terror")
* culture / politics - democrat vs republican (and media fed into it bc it culture wars drive ratings)
Yeah...looks like al qaeda did more damage than we thought.
The time period of mid 90s until 9/11 should really receive far more attention. It feels like most of the world was on a much more optimistic and promising trajectory.
I think it was also the last time that we saw major, society-wide and significant technological progress happen in a short amount of time in developed countries: the early days of widespread adoption of the web and all of its implications.
At the same time, I sometimes wonder if many of the negative developments of the two decades afterwards might also be ascribed to the spreading adoption of the web and its unintended negative consequences to global sensemaking.
For many, there was a palpable sense of hangover. That we were living in the ruins/wasteland of an already failing civilization, with very little control over the outcome for society nor for oneself. Much of the saccharine, optimistic content on TV could be seen another way, as almost delusional or perhaps as clumsy propaganda. It could only be enjoyed with a big dose of irony or an escapist suspension of disbelief.
I can only guess at all the factors which influence these different, parallel experiences of the time. Different regional cultures, different socio-economic backgrounds, difference in parent generation, differences in sibling/cohort ages, etc.
To be clear, I am not trying to invalidate your memory, but only address your opening aside about where it might come from. There was certainly more than one experience of gen X and more than one experience of the 90s...
What I remember is a lot of very optimistic ideas being discussed openly without a lot of cynicism or irony. Go find some old Mondo 2000 or other early-mid 90s futurist material.
I also remember a wave of new technology people could touch and interact with: the PC and Internet revolutions. Shiny starships are awesome but I will probably never ride in one.
The 80s-90s was also the last era of musical innovation. If you include the 80s too there was: hip hop / rap, drum and bass, techno/rave and all its variant genres, grunge, shoegaze, dreampop, math rock, new wave, synth rock, I could keep going...
Since 2001: very little except slight variations on the above and reboots of older forms. For some reason music totally collapsed after 2001. I've toyed around with economic interpretations but ultimately it feels like there's some psychological wall there. We can't think of anything new.
Yet, a modest family home is out of my reach once childcare and other bills are considered. This is in sharp contrast to my parents who school without degrees, bought a 3-bedroom house in their early 20s and who are now both retired.
What went wrong?
I re-read The Sun Also Rises[1] yesterday. You could change the names and it'd be the story of plenty of people I know today. History repeats itself.
[1] https://en.wikipedia.org/wiki/The_Sun_Also_Rises - if you haven't read it, it's the best book.
Just hoping I can’t say the same thing about Steinbeck’s books in the next few years.
Things get less giddy and boundless (for people on the whole) when a country reaches middle age and there's not new jobs just for the asking. When people reminisce about "how resilient and capable we were back then", just remember that nothing hurts too bad when you've got a free ride on an elevator to the top floor.
And now consider southern Europe where it's our situation and wages are 1/2 what we have (though with more social services to take up the slack).
Millenials are young and so the appropriate comparison has to be to to other generations when they were the same age.
You can throw out half their graphs based in that point.
The remaining ones are cherry-picked to be misleading.
Growth in the overall economy, while good, does not indicate the absolute level of success. Would you have rather grown up in India where there's been much higher growth in the last few decades?
In general, real wages have only grown over time. Today, we benefit from all the growth of previous generations.
Median household income is not flat, but up steadily every decade. Yes, on the high end, it has grown even more (because a smart person can contribute more than in the past b/c less manual work, information tech).
But what no one says is that wages are up for lower incomes as well.
And, the safety net is bigger: government transfers for unemployment, food stamps, child tax credits, etc are WAY up compared to previous generations. Boomers barely got a dime.
Before the pandemic, the economy was absolutely the best it's ever been by a long shot. Why didn't they show an actual comparison of employment rates? Millennials would be dominating.
Millennials also dominate on education. Our lives are so much richer because we've more likely gone to college and can access so much information from our smart phones.
In the same way that news is mostly all the bad things happening around the world (another shooting, another disaster), journalism and politics is often about all things gone wrong in our society.
Consequently, nearly everything you read and hear about current times is exaggerated in a negative way. (Often for the good purpose of trying to improve it.)
This article is a perfect example.
Try to stay skeptical when everyone is saying our world is regressing to poverty and nastiness.
Because the truth is we have a vibrant and beautiful society that's damn near the best it's ever been. And the future holds even more promise.
-- A young millenial
All the people saying riffs of "OK, Boomer" should go visit BLM protest and ask people there how envious they are of their grandparents.
Millenial here, born in mid-80s. Have seen or experienced: > dot-com boom / bust (junior high)
> 9/11 (high school)
> War on Terror (college)
> student loans (probably for the rest of my life)
> the worst recession since the Great Depression, and the lasting economic / career effects that never goes away when you go through that (right when I graduated college)
> the divisive culture wars between old / young, rich / poor, establishment / anti-establishment, etc
> Trump as president
> Covid-19
> narcissistic boomer parents
> narcissistic boomers in all levels and areas of institutional leadership whose baseline modus operandi is incompetence, corruption, and greed
> and a lot more that stresses me out
From my perspective, the world is back-sliding - everything feels like its getting worse, not better. Economic data backs this - real wages are level while cost of living is increasing.
And you wonder why we are putting have having children? It's because we do not know what economic optimism and financial security feel like.
Edit - the last 20 years notwithstanding, maybe there is still some things to be optimistic about:
> people are waking up (just look at the comments in this thread)
> mainstream media is finally talking about this
> if you are reading this, you have access to some kind of computing device, which means you're richer than most in the world
All in all, what really sucks is we our standard of living won't be as comfortable as when we were kids, and the same will probably be true for our kids.
Maybe I am biased because I'm a very successful millennial. I have the world at my hands. Access to written knowledge from any point in the history of time. Tens of thousands of video games and movies available for under $10 and/or a small subscription price. I can learn the arts, pick up any hobby, or even teach myself to code for free. I can fly around the world and stay in hostels in other countries at the same price (or cheaper than) I pay rent in the US. If I run out of tp it is delivered to my doorstep the next day.
Sure, I make a lot of money and still can hardly afford a house. I graduated with more student loan debt than both my parents combined. They had different experiences in those regards. But I wouldn't trade my life in this millennial generation, for a life in the boomer generation, for anything.
https://danielmiessler.com/projects/reading/summary-the-war-...
I am NOT saying the article is wrong by any means, only that there are other considerations as well, which are always ignored in generational comparisons.
And less extreme. I know plenty of professionals in the bay area who aren't in tech, making decent, but not great, salaries + benefits. For most of these folks, every expense needs to be scrutinized and home ownership is a pipe dream.
The car you can buy today is many times better than any car you could've bought 50 years ago. Relatively, both you and your parents could buy a car, and they may have more money to spare than you would today. But they were definitely unable to buy a car that's anywhere near as good as what you can buy today.
However, I suspect a lot of people on the younger side would be pretty horrified at the level of communications, information access, ability to timeshift, and just the general friction of everything including payments, shopping, and more a few decades ago.
I've said it before only half-jokingly. If I were transported back to my late-eighties job as a product manager, I'd quit in shear frustration after a week or two because of the almost complete lack of information and communications tools.
As to the point of the person you're replying to, about cars and phones:
Those cars will also save many more people, which depending on the side you're on can mean that you're more likely to survive now or that there's much more "competition" likely to survive now.
Smartphones are better than the blackberries of a decade ago but they also shove social media down your throat in a way that had no equal before, which leads to significant impairments of mental health in younger generations.
There are many ways to look at the issue and we can almost endlessly zoom in and find discrepancies, but I wouldn't be surprised if a certain version of the central limit theorem ended up applying when comparing generations: the amount of seemingly random variables added up "even out" enough that the curves all end up looking like similar distributions, which can be compared.
What can you do to help more people become as financially successful as you are?
In the '90s, I could go out for a whole weekend and come home and check my answering machine and nobody would be offended, because that was the norm.
I could still opt to live like that now, but the repercussions would be much more severe, because the competitive landscape has shifted.
Even though people of relatively recent generations were more successful on average, that didn't give them access to many of the services and capabilities that people just take for granted today. Pick your year--1970, 1980, 1990. Plop many people down into those years and they would not be happy even if they had a good job and could buy a nice suburban house. (Middle class people were generally leaving the cities during that period.)
It's also the case that public policy can impact which areas are desirable, and whether more areas can be made desirable (for instance, by building usable mass transit).
Every other generation has all this now, too. But they also have houses and less debt.
According to the graph, G.I.s had much higher economic output per population than boomers did, and experienced some of the same technological advancements towards the ends of their lives (fast cars, color television, even early PCs).
Would you rather have been born into the G.I. generation or the boomer generation?
A few other things to consider. The TP delivered to your house was done so by someone working a low paying gig work job. There is a good chance, that like you, they graduated with significant student load debt. How do you think they feel about their economic future? And in 30 years, what is social security and medicare going to look like? We are racking up major deficits to deal with the impact covid-19. Climate change is going to be an issue in our lifetime, and I strongly believe that if our generation does not tackle this issue, that it will significantly alter the course of humanity. And to add to all of this, we are already shifting towards populism in our politics. If that shift continues due to economic issues of subsequent generations, things will get weird.
Actually, I'm taking a broader view of the issue.
>article is focused on economic prospects of our generation, many of the ramifications of which will not play out for decades
My response is not focused on the economic ($$) future of millennials. In fact, I am not even in disagreement that millennials are disadvantaged economically particularly when looking at CoL and debt.
I am pointing out that the article eschews the extreme compounding increases in technological advancements that my generation is fortunate to experience. Is that agreeable? Or would you say that when comparing generational success and/or happiness we should only consider variables where millennials lag?
> The TP delivered to your house was done so by someone working a low paying gig work job. There is a good chance, that like you, they graduated with significant student load debt. How do you think they feel about their economic future?
The same person who delivers my TP probably gets their tp delivered as well. Even though they are a blue collar worker, likely with debt. Isn't that value worth consideration when comparing generational wealth? How is that being accounted for in the article? If it isn't being accounted for, then why not?
For example, in my own circle of hobbies. Fishing is getting worse[1]. Surfing is difficult because costal real estate is crazy expensive. Gardening is also difficult due to real estate, etc.. I can think of at least a dozen other activities that are now much harder to participate in due to rising real estate prices, climate change, or wealth inequality. For anyone who participates in these activities, there is a real loss in QOL.
Also, I think you are presenting a false dichotomy. Your suggestions is that millennials should be content because technological progress offsets the loss of economic opportunity. This is a false choice. We can have both with the right mix of policy. No one said to the boomers "You can have good economic opportunity, or you can have technological advancements, pick one". In their own lifetimes, they also saw huge advancements in medicine, infrastructure, communication, and tech.
[1] https://www.pressdemocrat.com/news/9058818-181/california-po...
You're using a ban on abalone fishing as an example of how hobbies are "becoming harder to participate in"? I'm sorry, but that's a massive generalization and a ridiculous stretch. The boom in technology over the past 30 years has undeniably enabled free learning, and while you can point at niche examples as outliers, you would be grasping at straws.
>Also, I think you are presenting a false dichotomy. Your suggestions is that millennials should be content because technological progress offsets the loss of economic opportunity. This is a false choice. We can have both with the right mix of policy. No one said to the boomers "You can have good economic opportunity, or you can have technological advancements, pick one". In their own lifetimes, they also saw huge advancements in medicine, infrastructure, communication, and tech.
Can you help me to understand how suggesting more variables be brought into the equation when comparing generational success is a false dichotomy? I think you're presenting a straw man. My comment was that I am content due to reasons not considered in the article, and that maybe those reasons should be considered when looking at the population as a whole and comparing them cross-generationally.
You suggest adding more variables, and I recommended that we extend that beyond technology and then you summarily dismiss those concerns. Abalone is a very niche fishery, but my broader point was that our environment has been significantly degraded for a number of reasons, and for people who value the environment, whether it be for fishing, hiking, or whatever, they have experienced a loss relative to the generations before them. This also holds for anything that requires real estate. For example musicians are finding it much harder to make ends meet in cities due to loss of studio space and event venues. And even technology has not been a net win for everyone. Ask a journalist how they fell about the internet? How about your local bookstore?
I am glad you are content. Enjoy it. But recognize that you are literally one of the few winners in this economy. A highly paid tech worker has likely just experienced the best decade in history for their particular profession. But that is a very narrow segment of our society, and a large chunk of our generation has lost ground relative to their cross-generational peers.
But I'm not the only winner. Society as a whole wins through advances in technology. That's my point, and that's what gives birth to the entrepreneurial spirit found here.
If you don't think so we can probably agree to disagree.
I do feel like the cards are stacked against everyone who isn't already rich. The system is designed to help keep the rich people rich, and make sure the poor stay poor.
I'm excited about the uprising, because we might finally be seeing a period of time that brings about real change. I'd love to see politicians abolished and replaced with real direct digital democracy. Politicians are a leftover from the colonial era when government representatives were necessary because it wasn't possible to have real democracy.
I feel like we tend to think more in terms of school grading where even an 80% is "not very good".
FWIW I grew up poor, and am certainly not wealthy now (I'm still a wage slave), but at least I can afford to buy food and new clothes. Growing up I had to rely on charity.
And then there is a friend who managed to hop skip and keep a decent job and stuff money away tax protected. He's made more off capital gains than he's made from working.
The whole system is set up to allow wealth to accumulate no matter the state of the real economy. While preventing people with earned income from 'breaking out' and competing with the wealthy and their children.
The last 3 years of profit and growth were stolen from the future by the CEOs and past shareholders of these companies, and now the Fed is bailing them out by encouraging even more debt and leverage during coronavirus crisis.
I expect deflation in the near term, and tremendous inflation in the long term.