Posted on 04/26/2013 3:18:32 PM PDT by SeekAndFind
The nearly 3.7 million American babies born in 1982 werent special, except to their families. But in the eyes of demographers, they were categorically different from the 3.6 million Americans born in 1981. They were the first members of a new club: Generation Y.
This so-called millennial cohort, the largest generation in American history, landed in the cradle during an awful recession, learned to walk during the Reagan recovery, came of age in the booming 1990s, and entered the labor market after the Sept. 11 attacks and before the Great Recession, the two tragedies of the early 21st century. Theyve survived an eventful few decades.
Yet nothing in those vertiginous 30 years could have prepared them for the economic sledgehammer that followed the collapse of the housing market in 2007-08. And the aftereffects, economists fear, may dog them for the rest of their working lives.
Generation Y is the most educated in American history, but its education came at a price. Average debt for graduates of public universities doubled between 1996 and 2006. Students chose to take it on because they expected to find a job that paid it off; instead, they found themselves stranded in the worst economy in 80 years. Young people who skipped college altogether have faced something worse: depressed wages in a global economy that finds it easier than ever to replace jobs with technology or to move them overseas.
Finding a good job as a young adult has always been a game of chance. But more and more, the rules have changed: Heads, you lose; tails, youre disqualified. The unemployment rate for young people scraped 18 percent in 2010, and in the past five years, real wages have fallen for millennialsand only for millennials.
It costs a lot to be a grown-up. It means more than saying please or holding doors for the elderly, although those are nice to do. It also means moving out of your parents home, renting a place of your own, paying for food and clothes, buying a car, getting married, having children, buying a houseall the trappings and expenses of a middle-class life.
These life stages drive a consumer economy. Housing IS the Business Cycle is the memorably brief title of a 2007 study by University of California (Los Angeles) economist Edward E. Leamer showing that the housing market both presages recessions and bolsters recoveries. A generation that buys new homes is a generation that pushes the economy forward.
But millennials have responded with a collective No, thanks. Or at least Not yet. More than one in five Americans ages 18-34 told Pew Research Center pollsters last year that theyve postponed having a baby because of the bad economy. The same proportion said they were holding off marriage until the economy recovered. More than a third of 25- to 29-year-olds had moved back in with their parents. Millennials have been scorned as perma-children, forever postponing adulthood, or labeled with that most un-American of character flaws: helplessness.
The case for pessimism is depressingly easy to make. Even after the economy recovers, the penalty for graduating into a recession may still apply to young peoples wages. When Lisa Kahn, an economist at Yale, studied how the 1981-82 recession affected the lifetime earnings of young workers who graduated during the 1980s, she found that for every percentage-point increase in total unemployment, the starting incomes of new graduates slipped by as much as 7 percent. Two decades later, because of their bad timing, these graduates had taken a $100,000 hit to their cumulative earnings.
If this pattern applies to millennials, the consequences will be grim for an economy that relies on big-ticket items such as houses and cars. Half of a typical familys spending goes to transportation and housing. But Americans ages 21-34 bought only 27 percent of the new vehicles sold in the United States in 2010, compared with 38 percent in 1985; from 2008 to 11, only half as many young Americans as a decade earlier acquired their first mortgage. Having been rejected by the economy, millennials are in turn rejecting cars and housesthe pillars of the modern consumer economy.
Still, do millennials really count as the unluckiest generation since World War II? Its true that wages havent grown this slowly in decades, and globalization and technology have held down wages for millions of young workers to an unprecedented extent.
But in some ways, millennials are also the luckiest.
For one thing, theyre living in an age of affordable abundance. Food has never been cheaper as a share of the typical American family budget. The price of apparel is also falling relative to wages. The Internet, while no substitute for gainful employment, has made many things cheaper that used to take extra income to buycommunication, notably, including private information-sharing and professional collaboration. It has made casual retail cheaper (and more convenient). It has also made mass entertainment cheaper, especially music and amateur videos. These commodities have grown cheaper, in part, by replacing and lowering the cost of human work.
That we live in a golden era of cheap essentials and entertainment might register as cold statistical comfort for the millions of unemployed millennials who watch their dreams fade with every passing year. This group can hope for another mitigating factor: time. The U.S. economy is expected to continue its recoveryunemployment falling, wages rising, debts slowly getting repaid, life going on as it did before 2008. In an economy that is now creating 200,000 private-sector jobs a month, the total debt held by young adults has shrunk to its lowest level in 15 years.
Even if millennials havent read about these trends, they seem to feel them in their bones. The Pew study that found twentysomethings moving back home also reported that nine in 10 millennials said they already earn (or have) enough money, or expect to in the future. If optimism has any currency, the millennials may well outgrow their miserable circumstances and bequeath to their own children a more prosperous nation than their parents left for them. Theyre the best-educated generation in American history, moving into their prime working years while home prices remain fairly cheap. Is that so unlucky?
Still, their timing couldnt be unluckier. The past 30 years have seen enduring income stagnation capped by an economic collapse. Average household wealth nearly doubled between 1983 and 2010, the Urban Institute recently found, but younger generations shouldnt expect the same. They already lag their parents in wealth (by 7 percent) at the equivalent age, and now, stagnant wages, diminishing job opportunities, and lost home values may be merging to paint a vastly different future for Gen X and Gen Y, Eugene Steuerle and three coauthors concluded. Despite their relative youth, they may not be able to make up the lost ground.
The writer is a senior editor at The Atlantic.
I consider myself very blessed. Despite the circumstances I grew up in I’ve now got a great marriage, four kids, and no student debts. Not all of us turned out to be train wrecks.
Millennials postponing children. Fewer babies, fewer workers, bigger entitlement crisis. America is no longer the home of the free and the brave, but the fearful and the dependent.
I was born in 1982. I’ll admit I haven’t always been a very good adult, but at least I can support myself.
I was one of these people born in early ‘82. It’s been a battle to get where I am. I’ve just accepted the fact I probably won’t have a retirement like my grandparents enjoyed.
...For one thing, theyre living in an age of affordable abundance. Food has never been cheaper as a share of the typical American family budget...
...That we live in a golden era of cheap essentials...
These two statements are such unbelievable, total, plain-as-day LIES that the rest of the article is garbage.
The price of “entertainment” doesn’t mean much when you can’t afford real food or fuel or housing.
What are those of us born in 1979 considered to be?
I don’t know, but the name is less important than our personal and economic well-being.
The younger the generation, the more unlucky they are, as they inherit a decaying America that has long since traded in its exceptionalism and former greatness... all in favor of growing, big-government, statist enslavement and an ever-increasingly noxious, poisonous culture akin to an open-sewer.
But, hey, they have fag marriage! And more states embracing dope legalization! Dope and anuses! Hooray! What a glorious testament to our founding fathers!
The entire concept shows how shortsighted people have become. Just a few generations ago, people their age were being drafted into Vietnam. A few generations before that WWII. A few before that, the first World War and the great depression. A few before that, and 1/4 wouldn’t see 50 and would die of water-born illnesses. Before that, millions would have been killed in the Civil War.
Millennials’ biggest obstacle are themselves. Every generation is born into challenges, but few in the past could even imagine what benefits Millennials would be born into.
People born from 1965 to 1981 are labeled as Generation X. Not sure why those years are used as the cutoff. The postwar baby boom is said to end in 1964.
The potentially permanent effects of hitting the job market in a depression/recession cannot possibly be overstated. I was extremely lucky (OK, some skill was involved) to have a job on Monday after graduating on Saturday in 1980 (as you may recall, a pretty nasty time). The time and wages lost being permanently behind as you go up the ladder, IMO, can cost considerably MORE than 100K in a lifetime. Every day spent in Mom and Dad’s basement is another day with no progress - and industrious as kids might be, working in retail to get by won’t count for much in this area.
GenX
I wonder how the ‘millinnials’ are doing as far as debt to income ratio. I would hope that at 31 they’ve paid off most of their school debt.
I do believe that's the first time that phrase has been posted on FR. ;-)
Luck’s got nothing to do with it. All the millennials I see having problem CHOSE to, and of course are enabled by their parents. My A#1 goal by around age 15 was to get out of the house and strike out on my own. I was working at McDonald when I moved out, because that was the job I could get. And it’s not that home was horrible, but even then I’d met people still living with their parents past 20 and they were clearly losers and I wanted no part of that. Of course it helped that my mom started charging me rent when I hit 18, welcome to adulthood time to start paying bills, helped make home less appealing. If you’re kid won’t launch on their own PUSH.
Actually, they are very much true. Especially when looked at in the economic big picture, not just temporary ebbs and flows of inflation. The overall amount of individual energy expelled in order to acquire the essentials, like a meal, a roof over your head, or clean water, is very low. This is in the balance of history, not just looking at the ups and downs of a few decades.
As an example, think of the overall energy you would expend to make just a simple pot of beans- a staple food for the poor around the world. Just 100 years ago, a large portion of your time would just be spent in farming and cultivation. Your personal energy expenditure for that pot of beans would be months of work and focus. A vast majority of your working day would go towards paying for, creating, or growing the fundamental elements of life. Now, you can pick up a bag of beans for .75c at Wal Mart with doing very little work. The equivalent energy/earnings ratio to have that pot of beans would be a fraction of an hour.
It just seems bad for Millennials now because of the constant demand and expectation for more, more, more. Not that there is anything wanting more- as long as you are willing to work for it. Could you imagine someone 100 years ago who would have the leisure time to spend hours a day at a coffee shop, on the internet, watching TV, exercising for the sake of exercise and not as a result of work.
We grew up in very difficult times during the 70’s in a minister’s family, when the assault on religious faith was just beginning. Financially stressed much of the time, completely broke otherwise, we seldom bought new clothes or name brand anything. All we had was each other as an intact family, and faith, though often faltering.
Every one of us kids grew up financially independent, free of drug or alcohol dependence or arrest records.
” . . millions would have been killed in the Civil War.”
Just over 600,000 died in the Civil War, more than in any war fought by the U.S.
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