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Why Aren't Millennials Spending?


Salty Dog

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Why Aren't Millennials Spending? They're Poorer Than Previous Generations, Fed Says

Since millennials first started entering the workforce, their spending habits have been blamed for killing off industries ranging from casual restaurant dining to starter houses. However, a new study by the Federal Reserve suggests it might be less about how they are spending their money and more about not having any to spend.

A study published this month by Christopher Kurz, Geng Li and Daniel J. Vine found millennials are less financially well-off than members of earlier generations when they were the same ages, with "lower earnings, fewer assets and less wealth."

Their finances were compared with Generation X, baby boomers, the silent generation and the greatest generation.

The researchers examined spending, income, debt, net worth and demographic factors among the generations to determine "it primarily is the differences in average age and then differences in average income that explain a large and important portion of the consumption wedge between millennials and other cohorts."

Millennials, which the study defined as those born between 1981 and 1997, with ages ranging from 21 to 37, "paid a price" for coming of age during the Great Recession. They had to face historically weak labor demand and unusually tight credit conditions.

Dealing with those financial obstacles probably created "attitudes toward saving and spending" that might be "more permanent for millennials than for members of generations that were more established in their careers and lives at that time," the study says.

Despite millennials' much maligned, unofficial hipster status, the study indicates they're pretty mainstream.

Their spending on motor vehicles — which is sensitive to economic expansion and contraction, and accounts for about 20 percent of retail sales — shows millennial households have similar tastes and preferences to older generations, as does their spending on food and housing.

Their consumption habits are similar to their parents' and grandparents' — millennials just have less money to spend.

The researchers also examined debt between each generation. While the comparisons were "somewhat mixed," researchers said it "seems fair" to conclude that millennials have levels of debt about the same as Generation X and more debt than baby boomers.

The study also noted newer financial obstacles for millennials. Broad economic trends depict a rise in health care expenditures, as well as a rise in college tuition that has outpaced general inflation that previous generations avoided in their young adulthood.

And the generation's higher rates of racial diversity, higher educational attainment and lower rates of marriage? Those are all consistent "with secular trends in the population and are therefore not the aberrations of a single generation," the study said.

Millennials are still fairly young, so "it remains to be seen whether having reached adulthood during those unfavorable years will have permanent effects on their tastes and preferences," the study says.

https://www.npr.org/2018/11/30/672103209/why-arent-millennials-spending-more-they-re-poorer-than-their-parents-fed-says

 

 

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After high school, 1962, applied for a job as a tool makers apprentice. The guy said I can't hire you as you haven't completed your military service.  !967 after serving 4 years I went back to that sa

I'm blatantly biased because I am proud of my kids.  I believe that opportunity exists for those willing to work for them. My 35 year old daughter is an architect..  with a free Masters degree co

You divide the world into WORKING CLASS and HIGHLY EDUCATED AND AMBITIOUS and you seem to suggest working class folks have nothing to aspire to. My brother.. the father of my millennial EMT niece

colemanlee

You have to work to make money....something that seems to be lost on the newer generations

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They like to enjoy life more. It is not all work for them. However I  do not agree that they are less wealthy.  

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I feel sorry for young people today!  Far less job opportunitys, everything is more expensive.  Many are saddled with large student loans for useless diplomas.

Case in point,  neighbor was medic in military now a firefighter/paramedic.  He makes about  what my retired firefighter/paramedic friend made when he was that age and that was 30 years ago.

Cape Coral Fl is talking about building or financing homes because teachers cannot afford housing on what they are paid. 

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Affordable housing and socializing are among reasons teachers leave our area.

2008 had 15 percent vacancy rates, meaning low rents. Today, 3 to 4 percent vacancies are expected to continue through 2019.  

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The district plan addresses 765 single, Lee teachers with zero to two years' in our system.

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I too feel sorry for the young. They have been tethered to their parents with and enslaved by cell phones. They have very little that is new and exiting. Music and fashion are just more of the same. All mountains have been climbed, all jungles explored and everyone has been there, done that.  Unless they are very clever much of what they can do, can soon be done better, cheaper and faster by a robot.   I am glad to be a baby boomer.

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Kabisay-an gid
7 hours ago, Salty Dog said:

However, a new study by the Federal Reserve suggests it might be less about how they are spending their money and more about not having any to spend.

 

Hard for millennials to make much money living in mommy and daddy's basement as adults.

Still plenty of good job opportunities out there for those willing to work.

 

 

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'Still plenty of good job opportunities out there for those willing to work.'

Maybe in your world. In the real world that is not the case. 

Almost every employer wants fully trained and 5+ years experience for entry level jobs, almost no employers are willing to train on the job anymore. Everything is changing too fast for them to take that risk.

Yet how the hell is anyone supposed get experience if nobody will let them learn it?

Work for free to get experience some say. That has zero basis in reality. Nobody can afford to work for free unless they don't actually need to work.

My generation and the previous ones have completely distorted the reality that my children and their children have to live in, an then we call them lazy and unmotivated. Only the blind could come to that conclusion.

My generation has had it difficult, but the ones before had it easy compared to what the younger generations have to face. Life is several orders of magnitude more complicated now than it was in past generations. 

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to_dave007

I'm blatantly biased because I am proud of my kids.  I believe that opportunity exists for those willing to work for them.

My 35 year old daughter is an architect..  with a free Masters degree courtesy of a scholarship earned by her own hard work.  She's now a construction project manager for the Canadian federal government, and she and her husband just sold their first house for a tidy profit and bought their second.

My 32 year old son graduated a history degree.. taught English in Korea for several years.. tried his hand at an electrician apprenticeship..  then got a paralegal diploma and now works as an investigator for the provincial government.  He and his GF just bought a condo in Toronto.

My  23 year old daughter will graduate a 4 year university program as a Registered Nurse in April 2019, with ZERO debt.  Though her mum and I helped her, she had saved, through her own hard work, $18,000 before her first day of university.

My 18 year old daughter has worked now for 2 years, on weekends and summers.  How tough was it..  working in a movie theatre or a games store?  She is an active Cosplay hobbyist, having made many of her own anime inspired costumes with her own two hands.  How great was it to see her..  at  13 or 14..  being taught to sew by my mother in her 80's?  She intends to start engineering school in 2019.

One niece is am ambulance EMT..  another a day care worker..  And another graduated a biology course, and now works as the resident chemist for a winery.  One nephew is in engineering school..  another is an electrician.

My friends son (late 20's) had helped tear down and rebuild a heritage aircraft engine by age 18..  earned a degree in aerospace engineering..  and now owns and operates a small business that makes specialized display cases for museums and the like.

Another friends son owned two businesses by age 23 (a laundromat and car wash) and didn't smoke or own a credit card.  Just graduated as an engineer in Germany.

One lady (about 34) I know studied fashion design and now owns and operates a successful ladies fashions store in Toronto.  Friend of hers worked as a bartender for years, lived modestly, saved her money, and owns a small house with her electrician BF.

Really..  the opportunities are there..  for those who really go after them.  There ARE new hills to climb.. new discoveries to make..  new songs to write.. new businesses to build.  Just takes some hard work..  same as it did for previous generations.

I'm an optimist.

Edited by to_dave007
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For working class people real wages have fallen and there are far fewer opportunities at moving on to better paying jobs.

For the highly educated and highly ambitious, there are still opportunities (and always will be), but that's always a minority of society as a whole.

The numbers suggest this generation is poorer than the last, and according to some sources, works on average more hours.

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Salty Dog
1 hour ago, dart69 said:

'Still plenty of good job opportunities out there for those willing to work.'

Maybe in your world. In the real world that is not the case. 

Almost every employer wants fully trained and 5+ years experience for entry level jobs, almost no employers are willing to train on the job anymore. Everything is changing too fast for them to take that risk.

Yet how the hell is anyone supposed get experience if nobody will let them learn it?

Work for free to get experience some say. That has zero basis in reality. Nobody can afford to work for free unless they don't actually need to work.

My generation and the previous ones have completely distorted the reality that my children and their children have to live in, an then we call them lazy and unmotivated. Only the blind could come to that conclusion.

My generation has had it difficult, but the ones before had it easy compared to what the younger generations have to face. Life is several orders of magnitude more complicated now than it was in past generations. 

There's always the military. As a career, or maybe just to get those few years of experience.

It's not your father's military anymore. Many will never touch a rifle again, once they've left basic training.

The pay isn't too bad either. Sure the first few years may be lean. Career military members make a good living wage with great free medical and a decent retirement after only 20 years while still in their young 40s.

Entering the job market with 20 years of military training and experience under one's belt while also receiving a military retirement, is  not a bad way to go. Just ask many members here who have done just that, and now receive a pension from a second career as well as their military pension...

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to_dave007
27 minutes ago, savarity said:

For working class people real wages have fallen and there are far fewer opportunities at moving on to better paying jobs.

For the highly educated and highly ambitious, there are still opportunities (and always will be), but that's always a minority of society as a whole.

The numbers suggest this generation is poorer than the last, and according to some sources, works on average more hours.

You divide the world into WORKING CLASS and HIGHLY EDUCATED AND AMBITIOUS and you seem to suggest working class folks have nothing to aspire to.

My brother.. the father of my millennial EMT niece..  worked as a laborer in a steel mill.

My brother.. the father of my millennial electrician nephew and chemist niece..  is a lineman for electrical distribution company, and still goes up the poles in his 50's.

Working class background need not prevent the next generation from accomplishing a good life.  

My remarkable millennial bartender friend was homeless in her teens..  the product of a criminal father and addict mother..  but still managed to pull her own life together.

The statistics may be correct, but those willing to work have LOTS to look forward to.  And those who don't wish to work..  well..  they will reap the rewards of their own labor.

Edited by to_dave007
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shadow
2 minutes ago, to_dave007 said:

 

My brother.. the father of my EMT niece..  worked as a laborer in a steel mill.

My brother.. the father of my electrician nephew and chemist niece..  is a lineman for electrical distribution company, and still goes up the poles in his 50's.

My remarkable bartender friend was homeless in her teens..  the product of a criminal father and addict mother..  but still managed to pull her own life together.

 

These people are all millennials?

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to_dave007
Just now, shadow said:

These people are all millennials?

was responding to a previous post.. trying to make the point that a working class background of one's parents need not stifle aspirations of the young.

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This post touches on 5 aspects of previous ones.

Easier for previous gens.

In many ways my gen (Boomer) did have it easier - finding jobs and much higher expectations for success without college degree - having a "trade" was not a bad thing back then - which leads to self-confidence  when looking - of course we did have some concerns - duck and cover, Viet Nam, race riots, etc.

Made it too easy for our kids

Not necessarily spoiled, but removed many of the obstacles some of us faced and provided too many diversions since we could afford them while our parents couldn't. I am guilty of this.

The need for a college degree even if totally useless in today's market.

Very few (27% by one poll)  graduates actually do work in fields closely related to their "major". The E-mail below doesn't state what the degree should be in.

Opportunities provided by military service even if you don't last 20 years.

Most military MOS's (jobs) are not in infantry and have direct civilian applications

My DD-214 equivalent civilian occupation - "Electrical Engineer" - was acceptable to most US employers in lieu of a formal degree. Never applied for EE position :tongue_01:.

That's in addition to college tuition support after getting out.

10 years experience does put it in (just barely) the  Millennial zone (1981 / 2000)

The saying, gotta start somewhere, seems to have been lost on many today.

1st job that had regular hours (at 14) a gofer in law office downtown during summer - running errands outside office - worked for tips - very good money - next year they made it an intern function :sad_01:

(Resume? Law offices of Jones, Jones & Jones - Assistant to Office Manager)

2nd (at 15) working in pet shop that raised its own Hamsters, Gerbils, and such in the basement - after 10 hours on a hot summer day (feeding and cleaning out cages / dead animals) had to change clothes so bus driver would let me on.

(Resume? Riley's Pet Emporium - managed in house animal breeding and maintenance program)

Others followed until 17 graduated HS and got 1st real job.

Still get these E-mails occasionally (churning data base) thanks to algorithms that ignore dates - avoiding age discrimination?:oldtimer:

When younger would have jumped at it - later no way -  Road Warrior position 50% / 75% travel - that's weeks on road not days in a week. Good for money,  bad for health and marriage


 

Quote

 

"Good Afternoon Terry,

Our team is working with a manufacturing facility in Southeastern, WI who is looking for a VP of Sales. This facility machines aluminum and iron castings for the automotive industry and is looking for someone who has a degree and has at least 10 years of sales experience in the automotive machining industry.

Base salary will come in around 150K with bonus potential."

 

 

 

 

 

 

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