The 30-Year Economic Betrayal Dragging Down Gen Y's Income (1 Viewer)

[Shutout]

The death of the great Australian dream

FOMO seems to be a pretty common theme in these articles.  Downside of the permanently electronically interconnected 2016?

THe second quote block seems to be a central issue for the generation: Trading those long-term things that will help in life vs. the "yolo" mentality of getting what you can get (in terms of money, life experiences, or what have you) when you can get it.

Also seems like Detroit is on its way to becoming "Millennial City" with some of its incentives. 

 

[Steve Tasker]

THe second quote block seems to be a central issue for the generation: Trading those long-term things that will help in life vs. the "yolo" mentality of getting what you can get (in terms of money, life experiences, or what have you) when you can get it. 

I've been guilty of this myself at times.  I'm not much for Facebook jealousy, but there's still some things I'd like to do while I'm still young and don't have kids.  Being a DINK couple with stable jobs, we're in a good position and I recognize that.  The majority of my vacation days last year were spent out of town traveling....a music festival, an 11-day European trip, a long weekend in Vermont, a long weekend in NYC, a week in Jamaica.  I'm hoping to hit another bucket list place or two this year, but my wife just turned 30 and I'll be 29 next month.......it's not like we're "young" anymore. 

Honestly, now that I'm really thinking about this, right now is the first time I'm starting to see any of my close friends have kids.  I really don't have any close friends under the age of 30 with children.  That would've been unheard of years ago.

 

[Steve Tasker]

European job market is rigged against younger workers, says Draghi

Youth unemployment is nearly 50% (!) in Spain, Greece, and Croatia.

[President of the European Central Bank] Mario Draghi also said “tragic” high levels of youth unemployment had the potential to threaten social harmony in Europe and that rock-bottom inflation was damaging the prospects of Generation Y by redistributing their wealth to older people.

Draghi told the Guardian there should be a “more open, flexible, innovative and business-friendly society” that did not disadvantage new workers because companies were afraid of taking on new staff. He gave the exclusive interview as part of a Guardian series investigating the economic plight of young adults around the world.

Setting out his views before the ECB’s dramatic decision on Thursday to lower interest rates to zero percent in an attempt to pump life back into the Eurozone and return inflation back to a target rate of 2%, Draghi said:

“In many countries the labour market is set up to protect older ‘insiders’ – people with permanent, high-paid contracts and shielded by strong labour laws.”

“The side-effect is that young people are stuck with lower-paid, temporary contracts and get fired first in crisis times. That also means that employers are reluctant to invest in young people, so the incomes of this generation stay lower over their lifetime.”

Draghi said the situation for young people was made worse by a lack of inflation, which according to the bank’s own research was increasing inequality and damaging their prospects.

Low inflation means that savings, likely to be held by older people, maintain their value, while debts, which are more likely to be held by younger people, do not erode.

“Nobody stays young forever. The crucial question is whether a person can participate fully in the economy over his or her lifetime – get a good education, find a job, buy a home for the family,” said Draghi.

“What makes me worry is that increasing inequality might prevent people from doing that. This is an issue all our societies need to look at carefully.

“The ECB’s role in that is to maintain price stability, which prevents unfair redistribution. For example, our research shows that in the euro area too low inflation results in redistribution from younger, more indebted households to older households that are typically net creditors.”

Responding to Draghi’s comments, Johanna Nyman, the president of the European Youth Forum, said: “After the financial crisis, there has been an increasingly clear pattern: young people are paying the price for mistakes that were not ours.

In the euro area, inflation has been below 1% for more than two years and is expected to drop further because of a dramatic collapse in oil prices. In February, Draghi said he would “refuse to surrender” to its effects.

Thursday’s unprecedented move by Draghi to create an environment of even cheaper money by reducing interest rates on borrowing and expanding its money printing programme failed to stimulate markets at close. 

 

[cstu]

European job market is rigged against younger workers, says Draghi

Youth unemployment is nearly 50% (!) in Spain, Greece, and Croatia.

I knew a French guy in his mid 20's who finished college and spent half the year here working as a waiter in French restaurants. As first I thought he did it just for the lifestyle but he told it was because it was a very difficult to get a decent job in France until you're 27.

 

[Steve Tasker]

Mario Draghi: 'Reducing youth unemployment is a priority for everyone'

Full transcript of the interview 

 

[Steve Tasker]

UK faced permanent generational divide, social mobility tsar warns

“Unfortunately there is a growing sense, somehow, that Britain’s best days are behind us rather than ahead,” said Alan Milburn, chair of the Social Mobility and Child Poverty Commission. “That is so corrosive. And so I think genuinely, the wind of change does have to sweep through the country.”

[. . .]

Milburn, a former Labour chief secretary to the Treasury who was appointed by David Cameron as chair of the social mobility commission in 2012, added that Britain may be about to face an “existential crisis”.

“What both the polling and the data suggest is that we may have reached an inflection point which, if these trends continue, we may become a society that is permanently divided. Certainly on home ownership, we’re heading for a world where rates of home ownership among young people are below 50% for the first time. If this trend line continues, we’ll be there by the end of the decade. It is a wake up and smell the coffee moment,” he said.

“This idea that the succeeding generation would do better than the previous generation is part of the glue that binds, as has been the notion that if you put in effort, you get a reward. Certainly I was brought up to believe that if you stuck in at school, you’d get on in life.

“Unfortunately, there’s pretty compelling data to suggest that that may no longer be the case and that has got huge consequences for social cohesion in our country. It almost feels like we’re facing an existential crisis about what sort of society we want to be,” he added.

A further set of questions directed at millennials found that difficulty getting on the housing ladder topped the reasons cited for their worsening prospects. This was closely followed by a quarter worrying about job security or wage growth.

Twenty per cent feared that government support – investment in public services or benefit payments – would dwindle in their lifetime, while18% feared a growing burden from student debts. One in 11 felt mental health issues would make life harder for their generation.

There’s an irony about Michael Blakeman’s job. He [30, Liverpool] works for a housing association and yet property is the subject that makes him most anxious.

His rent in a shared, two-up two-down house takes at least a third of his income – he has about £100 a week after basics are paid for. From that, he has managed to save £1,000. 

“I kind of expected I’d own a house by now. When you’re 21 or 22, you do mess about. You go out every weekend and you have your fun. But when I reached 25, 26, I was like: ‘Right, I need to save for a house’.

[. . .]

He adds that the goalposts keep moving and his salary is not keeping up with house prices. “The area I live in at the moment, house prices went up about £10,000 in the past year and a half. It feels like it gets further away every time you get closer.”

 

[Shutout]

I've been guilty of this myself at times.  I'm not much for Facebook jealousy, but there's still some things I'd like to do while I'm still young and don't have kids.  Being a DINK couple with stable jobs, we're in a good position and I recognize that.  The majority of my vacation days last year were spent out of town traveling....a music festival, an 11-day European trip, a long weekend in Vermont, a long weekend in NYC, a week in Jamaica.  I'm hoping to hit another bucket list place or two this year, but my wife just turned 30 and I'll be 29 next month.......it's not like we're "young" anymore. 

Honestly, now that I'm really thinking about this, right now is the first time I'm starting to see any of my close friends have kids.  I really don't have any close friends under the age of 30 with children.  That would've been unheard of years ago.

1.  THis guy looks too much like Jerry Jones for my taste.

2.  I am completely shifting my retirement portfolio to invest heavily in anti-depressants because it appears in about 10 years there is going to be an entire generation of woeful middle-agers who are lamenting their underachieving lives (and that's not poking fun..that seems to be the truth of the matter as an entire generation is going to spend half of their lives underearning compared to their potential).

 

[Binky The Doormat]

UK faced permanent generational divide, social mobility tsar warns

How is this different from the total despair in the mid-late 70s in the U.K.?

 

[Baloney Sandwich]

I haven't read the thread, can someone summarize what the special little snowflakes are #####ing about now?

 

[Bob Sacamano]

I haven't read the thread, can someone summarize what the special little snowflakes are #####ing about now?

Don't have a job

Those YOLO pics might come back to bite thonged and well-tanned ###.

Can't pay rent without going into debt

Weed isn't legal everywhere... yet

Don't have time for a relationship

Wifi isn't free?  WTF?

Will never be able to afford a house

Can't reverse permanent pube removal

Wages are ####.

Seems everybody who puts a sex tape online doesn't end up rich, famous, and married to Kris Humphries.  

Will never have babies

May not actually be talented, clever, special, or even able to change a lightbulb without dad's help.

Burdensome pensions suck.

But not as much as the fact that future generations will be pension burden free.

Despite what you learned on Friends, it is actually impossible to live in a major metropolitan city on a waitress' salary and do awesome things with your friends every night.

Squirrel

Things cost money

It's hard to eat at the French Laundry every night if your parents won't pay your rent.

Jobs are hard to find

Some people have to move to where the jobs are

Baby Boomers were whores

Woe

 

[parasaurolophus]

Also, depending on which state you live in, Social Security isn't available to all teachers. So many of them are relying SOLELY on their pension. So I have zero issues with people like your mom getting every penny she can get, regardless if she is one who has SS access or not (because there a re plenty of teachers around the country that are in a lurch). 

Overall, pension benefits are going as you say. As the next wave comes in, there tend to be changes in the tiers of systems and subsequent generations are receiving less overall return on the pension.  That's just the way it is but its really no different than when you bought a power tool 50 years ago and the quality and durability of that tool was generally much better than buying one today.  As businesses have looked to save costs, the general quality of the product has lessened.

I have never heard of this before. How on earth do teachers unions stand for people paying into social security and not collecting a dime? 

 

[Buckychudd]

For those looking to put millennials into a bucket, I think this is spot on. 

https://www.yahoo.com/news/comedian-nails-one-simple-thing-223900279.html

 

[FUBAR]

Mario Draghi: 'Reducing youth unemployment is a priority for everyone'

Full transcript of the interview 

IOW, #### the old people.

 

[Steve Tasker]

Thanks for the bump, I was going to start posting some more articles today.

 

[Steve Tasker]

Millennials at work: five stereotypes - and why they are (mostly) wrong

1. Millennials set the bar too high because of a sense of entitlement

She says the fact that work doesn’t pay as well as it used to and no longer guarantees much in the way of security means millennials feel it should at least be fulfilling or it simply isn’t worth it.

“Before, if you were slaving away at a job you didn’t enjoy, at least you could rest assured that you were paying off a mortgage and that eventually there would be some return on your hard work,” she said.

[. . .]

Here then is the paradox of the way work is viewed by many in this generation: they do not want to settle for an unsatisfying job that will barely allow them to get by but, at the same time, they have no choice but to take an unsatisfying job so they can afford to pursue their passion.

2. Millennials are lazy

Yet millennials themselves hold a more negative view of their generation than Generation Xers, baby boomers or other age groups do of their own peer group, according to research by Pew Research Center, the US thinktank. In a poll,59% of 18- to 34-year-olds described their generation as self-absorbed, 49% said they were wasteful, and 43% described their generation as greedy. On top of this, only 36% of millennials see themselves as hardworking and 24% see themselves as responsible.

This may say more about the problematic nature of the label “millennial” than anything else. As Leigh Buchanan, editor-at-large at Inc magazine, says: “One of the characteristics of millennials, besides the fact that they are masters of digital communication, is that they are primed to do well by doing good. Almost 70% say that giving back and being civically engaged are their highest priorities.”

About half of millennials globally have shunned work, and even potential employers, that conflict with their beliefs, according to Deloitte’s millennial survey. This suggests millennials don’t have a problem with standing their ground when asked to do something that goes against their values.

3. Millennials work to live rather than live to work

As a student, Ann-Victoire Meillant co-wrote From Millennials with Love, a collection of experiences of her peers in the workplace. “What we found in our research and from contributors is that we didn’t like the phrase work/life balance, but instead were talking about work/life integration.”

“I love what I do. If my client calls me at 10 o’clock in the evening, maybe it’ll bother me if it’s every day, but if it’s once in a while, I’m super happy that I’m able to help with something important to them,” said Meillant, a human resources consultant working in Paris.

[. . .]

“Finish working at five? How can you finish work at five?” asked [Mihalis Monemvasiotis, 29, a young filmmaker], bemused as he sat back in his chair sipping his coffee in a central London cafe. “Some people are just waking up at 5pm – I have to Skype people in New York at that time, and stay up late waiting for people to wake up in Tokyo.”

Monemvasiotis, who is originally from Greece but lives in London, has blended his work and social lives. He is co-founder of a production company, Pied Piper Pictures, and has also founded Eleven Campaign, a non-profit organisation using football to aid social cohesion – and is able to do most of his work at home equipped with only a phone and laptop.

Sometimes he finishes for the day at 9pm; other times it’s midnight. “In order to have jobs, you have to chase them. Freelance is good money when it comes, but I’ve invested all my savings and time in the organisation and am living month to month,” Monemvasiotis said.

4. Millennials are compulsive job-hoppers

But while it is true many may have one foot out the door – and according to aDeloitte survey two of every three millennials hope to move on from their current employer by 2020 – young people moving on isn’t exceptional to Generation Y.Figures on job tenure for Americans in their 20s today are almost exactly the same as they were in the 1980s. Job-hopping, it appears, is a common feature of being a young worker and not specific to this particular crop.

[. . .]

Tanya de Grunwald, the founder of careers website Graduate Fog and author of How to Get a Graduate Job Now, said attitudes about job loyalty were formed early in a millennial’s career. “I’ve noticed two distinct types emerge,” she said. “If they find a good job fast after graduation, and they feel valued and appreciated in that role, they will typically stay for a long time. They will become institutionalised fairly quickly and be keen to progress within their current organisation, rather than seeking roles externally.

“I’ve noticed that graduates whose career gets off to a bumpier start – say with a string of internships, temp work or freelance work – tend to develop a tougher, more casual attitude towards their employer, and be more likely to switch jobs more regularly,” she said.

[. . .]

The characterisation of Generation Y as needy employees who crave constant positive feedback may not be far from the truth, however. Of those millennials who said they planned to leave their company in the next two years, 71% said it was because their ”leadership skills were not being fully developed”.

5. Millennials have little time for experienced colleagues

Other things millennials value in the workplace are “reverse mentoring” – the opportunity to teach skills to older colleagues as well as learn from them – and more time spent discussing new ways of working, mentoring and developing leadership skills.

It is this that Chris Gale, 21, has found so enjoyable about his job as a public sector auditor at Grant Thornton, the financial consultants.

He is able to offer social media coaching to older colleagues, which he sees as valuable experience: “I mean for someone my age it’s rare to be in a position where I’m sat down with a senior partner showing them how to develop their online profile, and I just don’t think that kind of role reversal would have happened a few years ago.”

 

[humpback]

I have never heard of this before. How on earth do teachers unions stand for people paying into social security and not collecting a dime? 

They don't pay into SS.

 

[sbonomo]

I knew a French guy in his mid 20's who finished college and spent half the year here working as a waiter in French restaurants. As first I thought he did it just for the lifestyle but he told it was because it was a very difficult to get a decent job in France until you're 27.

what is so magical about 27?

 

[sbonomo]

I haven't read the thread, can someone summarize what the special little snowflakes are #####ing about now?

Despite what you learned on Friends, it is actually impossible to live in a major metropolitan city on a waitress' salary and do awesome things with your friends every night.





 

 

[Random]

The problem I see is that most younger adults don't want to move to a normal city to save money.  In Denver the average house price is 6x the average household income.  In most areas of Ohio it's under 2x.  Yes, Ohio isn't Colorado, NY, or California.  But its a great place to have the opportunity to build wealth.

 

[Steve Tasker]

The problem I see is that most younger adults don't want to move to a normal city to save money.  In Denver the average house price is 6x the average household income.  In most areas of Ohio it's under 2x.  Yes, Ohio isn't Colorado, NY, or California.  But its a great place to have the opportunity to build wealth.

I think I posted about this upthread, but I have a lot of friends roughly my age, 28-30, who moved to NYC or Chicago after college, and a surprising number of them are coming back here.  Not because they couldn't find work in those cities, they could, but they're getting to the point where it's time to settle down and I think they're realizing that financially it's just not going to happen for them.  Same thing with Toronto and the GTA, since I do a decent bit of work there and am familiar enough with the real estate market, etc.

The only people I know in NYC/Chicago who have managed to actually buy property have been a friend in Chicago whose father put down a hefty downpayment on a condo as a gift, and a couple in NYC where one is an i-banker and the other is a BigLaw associate.

Purely anecdotal, but it's definitely something I've seen happening more lately.

 

[stbugs]

The problem I see is that most younger adults don't want to move to a normal city to save money.  In Denver the average house price is 6x the average household income.  In most areas of Ohio it's under 2x.  Yes, Ohio isn't Colorado, NY, or California.  But its a great place to have the opportunity to build wealth.

It's still Ohio though , better off down here in Charlotte (or NC/SC) where it's relatively cheap and a lot nicer.

 

[Slapdash]

It's still Ohio though , better off down here in Charlotte (or NC/SC) where it's relatively cheap and a lot nicer.

I'd much rather be in a city like SF or DC but can't pull the trigger on taking the real income hit compared to Charlotte.

 

[Buckna]

The problem I see is that most younger adults don't want to move to a normal city to save money.  In Denver the average house price is 6x the average household income.  In most areas of Ohio it's under 2x.  Yes, Ohio isn't Colorado, NY, or California.  But its a great place to have the opportunity to build wealth.

I just moved to Denver a few months ago, good god the houses here are expensive. But I did the reverse, lived in Texas for a decade and a half saving money and have now moved to one of the most awesome places ever. Don't see how any millennial could afford to buy here unless its way out or in a rougher neighborhood. As a consequence though, there are apartment complexes everywhere here and tons more of them under construction.

 

[Binky The Doormat]

I just moved to Denver a few months ago, good god the houses here are expensive. But I did the reverse, lived in Texas for a decade and a half saving money and have now moved to one of the most awesome places ever. Don't see how any millennial could afford to buy here unless its way out or in a rougher neighborhood. As a consequence though, there are apartment complexes everywhere here and tons more of them under construction.





1

Sounds like a dream.

 

[sbonomo]

I'd much rather be in a city like SF or DC but can't pull the trigger on taking the real income hit compared to Charlotte.

SF is more expensive than you can possibly imagine.  Don't do it.  

 

[Tau837]

Given your quote above (taken from the Trustees Report Summary) insolvency begins in 2034 should no corrective events take place. And the insolvency is not inevitable, there are things that can be done to prevent it. Also, from the same summary:

After 2019, Treasury will redeem trust fund asset reserves to the extent that program cost exceeds tax revenue and interest earnings until depletion of total trust fund reserves in 2034, one year later than projected in last year’s Trustees Report. Thereafter, tax income is projected to be sufficient to pay about three-quarters of scheduled benefits through the end of the projection period in 2089.

So even after 2034, the SS benefit does not go to zero, it is reduced to 75% of currently scheduled benefits for another 55 years.

SS trustees have submitted the 2016 annual report, and the projected insolvency date of Medicare Part A is now 2028. And this is based on optimistic projections: "...the methodology the Trustees have employed for projecting Medicare finances over the long term has assumed a substantial reduction in per capita health expenditure growth rates..."

 

[The Z Machine]

SS trustees have submitted the 2016 annual report, and the projected insolvency date of Medicare Part A is now 2028. And this is based on optimistic projections: "...the methodology the Trustees have employed for projecting Medicare finances over the long term has assumed a substantial reduction in per capita health expenditure growth rates..."

If the showdown in health expenditure growth rates doesn't happen, we are all ####ed regardless of SS. 

Care must be rationed at some point.  Prolonging a life by 3 days of pain or unconsciousness isn't worth $500k.

 

[cstu]

The problem I see is that most younger adults don't want to move to a normal city to save money.  In Denver the average house price is 6x the average household income.  In most areas of Ohio it's under 2x.  Yes, Ohio isn't Colorado, NY, or California.  But its a great place to have the opportunity to build wealth.

Wealth doesn't help you when you're on your death bed with regrets about not following your dreams.

 

[bueno]

Wealth doesn't help you when you're on your death bed with regrets about not following your dreams.

Nor does poverty. And you can have different, more realistic dreams.  I would love to live in Colorado again, though I'd rather be up in the mountains - away from ski areas.

A place like Creede or Salida would be ideal for me. However, I am in NE Washington - smaller mountains, but longer summers (because of the lower elevation). Fishing is nowhere near as good though. I got my place dirt cheap and I am content. I can travel if I want and there are about three trips left in my bucket that I definitely want to make (lots of trips that would be nice, but not as high a priority).

My daughters bought their homes in Spokane when they were in their 20s. One has a college education - one could have gone that route but decided not to. There are nice places where the American dream still lives, but granted, there are fewer than when I first graduated from college.

One reason to seek out a place like Spokane is that housing is affordable, but for the unskilled you are looking at maybe $12/hour. Even with a college degree, at least to start. If dual income, no kids, you can swing it. Or postpone having children until you have your house.

It all ties into the pressure being put on the working class by economic forces and the lack of government doing anything about it. Maybe the younger generations can help reverse that trend by selecting better leaders - who knows?

 

[Random]

Wealth doesn't help you when you're on your death bed with regrets about not following your dreams.

I think its a lot easier to follow your dreams when you have some financial freedom.

 

[xulf]

My mother is eligible for social security (NY).  She will not be relying solely on her pension, and for the record my father owns his own business so they're not going to be scraping by financially.  You are correct that Social Security does not cover teachers in a number of states.

Like I said, I have no problems with her taking full benefits.  It was part of what she was promised when she took the job in the first place.  But this is just an extension of the pension discussion we had previously.  Pensions have been overpromised and underfunded, and it's the current employees who are taking the hit.  Same as its always been, but tack on student debt and so on and I shudder to think about what this country is going to look like financially in 20 years.

In Ohio teachers pay 0% into social security.  Rather that all goes into their pension and they are able to contribute more as if it were a 401k.  The more they contribute the higher their percent they get back when they retire.