Democrats & Liberals Archives

No, Millennial Americans Aren't Ruining the Economy

Since millennials began entering the workforce years ago, their spending habits have been a discussion by many pundits. Millennials have been blamed for the collapse of a number of industries and institutions, including marriage, the housing market, casual restaurant dining and the NFL. In some cases, headlines have accused millennials of literally killing everything.


New studies by the Federal Reserve, however, suggest what most millennials have known for quite some time. There's no doubt that industries are collapsing, or at least not performing as well as they once did. But that has far less to do with how millennials are spending their money. Instead the problem is likely a symptom of millennials not having any money to spend.


According to the study, millennials are less financially stable and well-off than their predecessors of different generations. They have "lower earnings, fewer assets, and less wealth."


The reasons for this are vast.


First and foremost, millennials have to deal with costs of education that have skyrocketed when compared to previous generations. In fact, the cost of college attendance has become one of the biggest challenges in higher education today. Student loan balances have exceeded over $1 trillion, according to estimates by the Federal Reserve.


Furthermore, millennials, who born between 1981 and 1997, largely came of age during the Great Recession, meaning unlike generations before them, they came into an economy with little job experience and therefore there was little economic demand for their labor even with a college degree. Meaning those who have graduated carry an enormous amount of debt and have a hard time finding a position that pays enough to cover the cost of their education.


Even those who are lucky enough to find positions in jobs they are actively searching for have had to adapt to the increase of contractor positions and the growing influence of the gig economy.


Millennials have also had to witness their parents struggle with the growth of suburban poverty, a dwindling middle class, and layoffs due to the financial crisis. Although information about trading stocks is more readily available, parents of millennials typically have greater success in the stock market. Overall, millennials have to deal with a number of fiscal insecurities.


While their wants and needs might be similar to those of previous generations, millennials simply don't have the income to cover those expenses or take the risks that their parents and previous generations were able to do.


This is a far cry from the narrative that millennials are irresponsible with their spending. Many have argued that millennials are more likely to use their to pay for experiences, vacations, SoulCycle sessions, or avocado toast. In reality it's hard to argue that millennials are "destroying industries" as a lifestyle choice. Instead, these trends are likely a product of low pay, high costs of living, and an economic landscape that is generally unforgiving and shows few signs of improvement.


Instead of demonizing millennials for irresponsible spending, it may be more useful to look at inflation and wage growth, which although closely tied, have not kept up with one another in the United States.


According to recent analysis by Glassdoor, inflation has drastically outpaced wage growth.


"Although the relationship between inflation and real-time wage growth is unique in each metro area in our analysis, inflation generally outpaced wage growth throughout most of the country in 2017," Glassdoor analysts wrote. "Why? Because wage growth has remained so slow, especially in the last year, despite steady job growth and a strong labor market. American workers have felt that with paychecks that have fallen in real terms over the past year."


In reality, journalists and pundits need to look more closely at what the root cause of these issues are, rather than demonize individuals who are only dealing with the difficult hand they've been given. As long as inflation continues to rise more rapidly than wages do, millennials will have to further budget their spending and ultimately put off the American Dream.


Posted by DanikaK at December 19, 2018 3:37 PM
Comments
Comment #435897

It is very easy to identify problems in this country DanikaK.

Please tell us what YOU believe are the root cause of these issues. We can then add our thoughts.

Posted by: Royal Flush at December 19, 2018 5:58 PM
Comment #435933

Part of the problem is rampant greed, that has steadily grown worse and worse for several decades.
For the past 30+ years, compensation for a few in upper-management has grown to exorbitant levels (millions, to tens of millions, to hundreds of millions (or more) per year), while the compensation for everyone else stagnated, or declined for many.

However, there are other serious problems facing future generations. To make matters worse:

    (1) corporations imported massive numbers of H1-B/H2-B Visa workers, and out-sourced as much as possible, which also served to drive down wages at all levels, including professionals (i.e. engineers, scientists, software development, etc., etc., etc.);
  • (2) Republican and Democrat politicians have both (despicably) pit U.S. citizens and illegal immigrants against each other for profits from cheap labor, and votes (for Democrats) via more representation in the House, via more U.S. House representatives, via apportionment of representatives (and electoral votes), based on population, based on the decennial CENSUS, which does not verify U.S. citizenship. Democrats are also fighting against a check-box on the CENSUS, despite the check-box being totally inadequate to prove citizenship. Democrats disguise their desire for power (for THEIR party) as compassion for illegal immigrants, while despicably pitting U.S. citizens and illegal immigrants against each other for votes.
  • (3) A high 35% corporate tax was driving corporations out of the U.S.A. for several decades;
  • (4) As a result of declining compensation for professionals (engineering, science, math, etc.), fewer and fewer Americans choose those types of college degrees, creating a race to the bottom, as corporations resort to more outsourcing cheap imported labor.
  • (5) Illegal immigrantion is costing the U.S. hundreds of billions per year in net losses, and that does not include the high costs of crime and thousands of homicides per year by illegal immigrants in the U.S..
  • (6) Also, the world population has doubled since 1956 to over 7 billion people today, and the world population is growing by 211,000 per day (all births minus deaths). The world population could double again to 14 Billion people in only 26 years. However, can this planet support that many people, and for how long?
  • (7) The U.S. has been at war for 93% of the time (225 of 242 years as of 2018), and the U.S. has military bases in over 70 countries, and a military presence in 150 (of 195) countries (not including the Navy or Marine Corps at sea). The cost for that is tremendous. There are still 40,000 U.S. Troops and 179 U.S. bases in Germany alone. Ther are still 50,000 U.S. troops and 109 U.S. bases in Japan. How long can the U.S. afford all of that?
  • (8) Healthcare in the U.S. has major problems. The annual death rate due to preventable medical mistakes is shocking (i.e. from JUL-2004: 195,000 * 6 last years from 2012 to 2018 = 1,170,000 deaths). More people died of preventable medical mistakes in only the last 6 years, than all of the 918,880 American soldiers killed in all American wars (American Revolution (4,435), the War of 1812 (2,260), the Indian Wars (1,000), the Mexican War (1,733), the Civil War (462,000), the Spanish American War (385), WWI (53,402), WWII (291,557), Korean War (36,574), Vietnam War (58,209), the Iraq Gulf War (529), the current Iraq war (4,424 as of JUN-2016), and Afghanistan wars (2,372 as of JUL-2018)) combined! Compare those 195,000 killed by preventable medical mistakes to the 43,000 people killed annually in the U.S. in automobile accidents. Also, over-population and dwindling water and resources will likely lead to more wars.
  • (9) Also, the U.S. national debt is almost $22 Trillion as of DEC-2018 (already beyond nightmare proportions), and total U.S. debt is almost $72 Trillion.
As a result of the above (and other factors not listed abovce), wealth distribution in the U.S. has grown steadily worse since the 1970s, and has never been worse since the Great Depression.
Today:
  • the wealthiest 1% owns 43% of all weatlh in the U.S.A. (see below).
  • the wealthiest 10% owns 76% of all weatlh in the U.S.A.
  • the wealthiest 20% owns 85% of all weatlh in the U.S.A.
  • 80% of U.S. citizens owns only 7% of all wealth in the U.S.A.
These numbers have been getting gradually worse for over 30 years.
  • 52.5% |==@===========================
  • 50.0% |=@=@==========================
  • 47.5% |=@=@==========================
  • 45.0% |=@=@==========================
  • 42.5% |=@==@=======================@= (43% owned by 1% as of 2018)
  • 40.0% |=@===@=================@=@====
  • 37.5% |@====@===============@========
  • 35.0% |======@=============@=========
  • 32.5% |======@=============@=========
  • 30.0% |=======@==@=@======@==========
  • 27.5% |========@======@===@==========
  • 25.0% |================@==@==========
  • 22.5% |================@=@===========
  • 20.0% |=================@============
  • 17.5% |==============================
  • 15.0% +==============================
  • =======1==1==1==1==1==1==1==1==2==2==2
  • =======9==9==9==9==9==9==9==9==0==0==0
  • =======2==3==4==5==6==7==8==9==0==1==2
  • =======0==0==0==0==0==0==0==0==0==0==0 YEAR
  • Source: inequality.org/facts/wealth-inequality/
Therefore, it is difficult to see a brighter future for future generations.

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