Don’t blame the mil­len­ni­als, they are broke

Khaleej Times - - NATION - Are cather­iNe raMpell Are Mil­len­ni­als Dif­fer­ent?, —Washington Post Writ­ers Group Cather­ine Rampell is an opin­ion colum­nist

Mil­len­ni­als are a mur­der­ous bunch, a gen­er­a­tion of homi­ci­dal ma­ni­acs. At least that’s the im­pres­sion you get from read­ing news sto­ries about my gen­er­a­tion. Ac­cord­ing to the head­lines, we’ve wreaked car­nage across the econ­omy with our fickle, self­ish tastes. So far we have “killed” or are “killing” din­ner dates, ho­tels, credit cards, gro­cery stores, cin­e­mas, Home De­pot, di­a­monds, banks, gyms, de­part­ment stores, va­ca­tions, cruises and casi­nos, the car in­dus­try, home­own­er­ship and even Buf­falo Wild Wings.

The ex­pla­na­tions for our butch­ery are man­i­fold, and some­times con­tra­dic­tory. Some­times we’re a bunch of hip­ster brats who don’t ap­pre­ci­ate the triedand-true cul­tural mile­stones of mid­dle-class adult­hood. We spend all our time snap­ping self­ies in our par­ents’ base­ments. That means we don’t need cars to get around, nor do we want them. To to­day’s young­sters, “driv­ing sim­ply doesn’t seem as cool as it once was,” one mag­a­zine ar­ti­cle pro­claimed.

Or maybe we ven­tur­ing out, but when we do, we make more friv­o­lous pur­chas­ing de­ci­sions than did our fore­bears. We frit­ter away our pay­checks on av­o­cado toast in­stead of sav­ing to buy a home.

Or, al­ter­na­tively, we’re so­cially con­scious, ad­mirably deaf to the siren song of com­mer­cial­ism. Un­like those Ma­te­rial Girls (and Boys) of the 1980s, we think own­er­ship is soul-suck­ing and point­less. Shar­ing is car­ing, bro.

Well, a re­search pa­per pub­lished last month by econ­o­mists at the Fed­eral Re­serve comes to a dif­fer­ent con­clu­sion: Mil­len­ni­als aren’t choos­ing to break eco­nomic tra­di­tions. In­stead, we’re just broke.

The re­port, looks at fi­nan­cial and cul­tural mile­stones for the co­hort born be­tween 1981 and 1997, and how it com­pares with ear­lier gen­er­a­tions at a sim­i­lar life stage. Con­trary to stereo­types that kids these days have sharply dif­fer­ent tastes and as­pi­ra­tions than did kids of yore, the re­port con­cludes that “mil­len­ni­als do not ap­pear to have pref­er­ences for con­sump­tion that dif­fer sig­nif­i­cantly from those of ear­lier gen­er­a­tions.”

We sim­ply lack the earn­ings or as­sets to make those same con­sump­tion pref­er­ences hap­pen. It’s true, for in­stance, that we’re much less likely to own homes. Home­own­er­ship rates among young house­holds were close to 50 per cent for Gen Xers in 2001 and baby boomers in 1989, the re­port finds, but only 34 per cent for com­pa­ra­bly aged mil­len­ni­als in 2016.

Have the scars of the hous­ing bust turned us away from the Amer­i­can dream of home­own­er­ship? Sur­vey data sug­gest oth­er­wise. More likely we’re just still scarred by the Great Re­ces­sion it­self: We sim­ply can’t af­ford to pur­sue that dream right now.

Af­ter all, many of us en­tered the job mar­ket when em­ploy­ment op­por­tu­ni­ties were few and far be­tween, and we got stuck on lower-pay­ing ca­reer tra­jec­to­ries. The Fed pa­per finds that mil­len­ni­als, work­ing full time, gen­er­ally have less in­come than did ei­ther Gen Xers or baby boomers at sim­i­lar ages.

We also have more stu­dent debt than those ear­lier gen­er­a­tions did. Young adults to­day are more ex­pected to at­tend col­lege if they want a de­cent job — and more­over, to fund that ed­u­ca­tion them­selves, given suc­ces­sive rounds of cuts in pub­lic dol­lars to state col­leges and uni­ver­si­ties. Stu­dent loan debt in turn can crowd out our abil­ity to bor­row for other pur­chases, such as a house. We’re not the ones, af­ter all, who bought houses we couldn’t af­ford and then de­stroyed the global econ­omy a decade ago.

We’re not the ones who or­ches­trated a mas­sive dis­in­vest­ment in pub­lic higher ed­u­ca­tion, af­ter the gen­er­a­tions be­fore us en­rolled for a pit­tance.

And go­ing for­ward, we’re not the ones who will ben­e­fit from the new $1.9 tril­lion deficit-fi­nanced tax cut, which was ef­fec­tively an enor­mous in­ter­gen­er­a­tional trans­fer of wealth. In case you’re won­der­ing who’s go­ing to pay that back, the an­swer is mil­len­ni­als, and the gen­er­a­tions who come af­ter us — through higher taxes, lower ben­e­fits or both. Which is yet an­other rea­son for us to pinch ev­ery penny we can.

If you’re re­ally con­cerned about the sup­posed eco­nomic car­nage be­ing vis­ited upon car-mak­ers or Buf­falo Wild Wings, blame the real vil­lain here: our el­ders.

You only lose what you cling to.

We sim­ply lack the earn­ings or as­sets to make those same con­sump­tion pref­er­ences hap­pen

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.