Source: Merced Sun-Star

 

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Category: Economy, Employment, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

26 Responses to “No job, no house, no kids: Welcome to the millennials”

  1. willid3 says:

    and may not have a car either

    but will have a cell phone.

  2. postman says:

    Baby boomers were born between 1946 and 1964. Those between 18 and 31 in 1970 were born between 1939 and 1952. So “Baby Boomers” seems an inaccurate label for the first row in these tables.l. I haven’t similarly checked the other two generational labels.

  3. scone says:

    Student debt = failure to launch?

  4. rd says:

    I have been completely baffled by the MSM fixation on the labor participation rate. I would expect to have labor participation rates at 1978 levels as we slide down the back side of the Boomer demographic bulge compared to rising up it in 1978.

    The three labor market things I have been paying attention to are:

    1. Median inflation-adjusted gross income
    2. Unemployment rate for people in their 20s
    3. Number of long-term unemployed

    Poor numbers for any of these are indicators of serious structural labor market problems. Poor numbers for all three, as we have had for a number of years now, are indicators of a very sick labor market. I suspect that the first one that will show major improvement over an extended time will be the unemployment rate for the young. That will indicate that the young are being hired to address either replacement of retiring boomers or actual economic growth.

    • RW says:

      How would these indicators tell you unemployment was structural? Are you analyzing them sector-by-sector?

      Technically structural unemployment means that a ‘full-employment’ rate of unemployment — the level of unemployment at which prices and wages start to rise and inflation becomes a risk — has increased and does not respond to increased demand; i.e., a significant component of unemployment is non-cyclical.

      That means we would expect to see labor shortages in affected sectors due to insufficient worker qualification for the jobs; i.e., ‘mismatches’ between worker skill sets and job description(s) and therefore an inability to fill those positions.

      If the problem is cyclical — or possibly secular if you buy the stagnation hypothesis — then you wouldn’t see signs of labor shortage you would see slack demand and little inclination on the part of businesses to ramp up production as a result which is pretty much the way things look at the moment.

      What interests me, assuming one can believe management surveys complaining about insufficient worker skills, is the general unwillingness to increase wages as a means of attracting more job applicants and retaining better workers. The evidence strongly suggests qualified workers are indeed out there which tells me that many businesses are placing a lower emphasis on increasing production and a greater emphasis on protecting the bottom line; e.g., better to hire foreign workers willing to accept lower wages or just demand more production from the workers you have.

      Shorter me: we are still in a demand slump and not getting out of it at anything like normal recovery rates so (1) more and more workers are giving up as long-term unemployment renders them increasingly less employable and (2) younger workers, even those with college degrees, have stunted early careers because they either cannot find work for which they are qualified or must accept inadequate wages at a lower position.

  5. BennyProfane says:

    At least they have legal weed in some places.

  6. rd says:

    BTW – has the bell just rung on the bull market?

    http://www.businessinsider.com/hamptons-home-sold-for-147-million-2014-5#!IVDCk

    We don’t need a generation of Millenials to buy houses if the hedge funders are finally willing to step up and take their place in the housing market. We can finally support the economy on the backs of the 0.01%.

  7. Futuredome says:

    most of the young don’t want to work. Generation X is replacing the Boomers as the “Parents”. Wow, I am getting old. By 2020, that process will be complete. If anything Gen X is having a decent recovery.

  8. rd says:

    Interesting article on the 20 million who could buy homes but haven’t:

    http://www.marketwatch.com/story/many-renters-have-enough-money-to-buy-homes-2014-05-02

    I love this quote:

    Still, Albert says first-time home buyers are put off by rising prices and multiple bids. “We also have to do a lot of re-education of our buyers,” he said

    I assume that the re-education is making sure that potential buyers understand that the long-term house price appreciation just tracking inflation is merely a statistical anomaly and instead the buyers should be assuming house prices will rise 10% annually.

  9. Livermore Shimervore says:

    The bulk of Millennials in the workplace (my observations): They have no interest in working long hours, can’t blame them but not even if they are compensated for it, or if its tied into their own bonus compensation. “No thanks”.
    They expect to be paid well beyond their skill sets, particularly if they only wield a undergraduate liberal arts degree. They view profits as something that’s in the interest of the executive level employees/owners and of not at all tied to their own job security. Asking them to work weekends is met with a mixture of bewilderment and eye-rolling. And plenty of whinging. If the choice is sacrifice and career advancement or quality of life and slow-climbing wages, they choose the latter every time. If aspiring to own a car requires taking on part time job to save money or make monthly payments, they opt for their hipster bicycle as their primary mode of transportation instead. And of course they are obsessed with sharing all of their life activities on social media: privacy has an entirely different meaning to them than all everyone before them.
    Meanwhile… millennials in emerging markets are working, studying and seeking opportunity from every nook of the internet as if they’ve only got one shot at success. This will have consequences.

    • gordo365 says:

      Livermore – so when you were in your 20s – how did you respond when asked to “work weekends”? I had a game with my engineer co-workers – to see who could get rated in top 10th percentile during performance review – while never working more than 39 hours a week. Many of us did while going out chasing women 4 nights a week. Weekends were spend on the ski slopes or on a boat at the lake.

      Sounds like you were a wall street type who wore kneepads at work. :)

    • bear_in_mind says:

      @LivermoreShivermore: I think you ought to converse with more of the Millennials of which you speak.

      There’s always been ‘slackers’ in any cohort, but my experience has been that if you don’t have the right techie catch-phrase or alma mater listed on your resume, all the potential and initiative in the world isn’t helping them find jobs that don’t involve either a retail sales floor or ground coffee and scalding milk. Neither of those are a bad outpost for for six to twelve months, but as a vocation? C’mon, get real.

      Today’s cohort experiencing UE at 19%? And only 11% are earning more than $40K (in 1970 dollars)? Wow. Stunning. Granted, $40K was pretty doggone good money in 1970, but to see the percentage of today’s cohort almost cut in half is sobering. Imagine what that number would look like if you stripped-out the fortunate, overcompensated Millennials who populate the campuses of Facebook, Twitter, Zynga, LinkedIn, Google, Instagram, Apple, etc.?

  10. wally says:

    Neither political party seems to have much concern about them. I imagine that as the years go by they’ll repay that indifference.

  11. KeithOK says:

    I find the Baby Boomers information in this chart confusing. The note says it is for 18-31 year-olds in each generation. There are different dates used for Baby Boom, but it’s generally agreed it starts after WWII, so I’ll use the Wikipedia date of 1946 as the start of the Baby Boom. Then in 1970 the oldest Baby Boomers would have been 24. So it looks to me like either this charts is looking at 18-24 year olds – unlikely given the 25% home ownership rate and 55% marriage rate – or it includes 25-31 year-olds who aren’t Baby Boomers. If they are only looking at 18 year-olds and over, then the 1970 numbers would only include Boomers born in 1952, or earlier, so it misses the majority of the Baby Boom (defined here as 1946 – 1964). I think the experience of later Boomers like myself (still in Junior High in 1970), well far better than that of the millennials, is not nearly as good as the “Boomers” in this chart.

  12. Mr.-Vix-It says:

    You have to understand the mindset of the milennials.

    No job: “We will stay in school as long as possible. Menial work is for suckers and we are not going to waste our life doing that.”

    No house: “We are young and want to live in major cities like SF and NYC where the majority of residents are renters. Plus we don’t have a down payment (as we are still paying for school).”

    No kids: “Why would I want to have kids when I’m living it up in SF and NYC? Maybe when I’m really old like 35 which is a long time from now. Plus kids are expensive (and we are still paying for school).

    • bear_in_mind says:

      @Mr. Vix-It: You and LivermoreShivermore sound like you both just stepped out of the same time machine.

      Unemployment Rate @ 19%.

      Since most states require persons to WORK over the previous 6-8 quarters to even qualify for UE benefits, AND be actively seeking employment to continue receiving benefits, your presumptions about slacker disengagement appears blissfully free of evidence or facts. Thus, these are *not* persons living off mom, dad or the grandparents for years-on-end in the basement rent-free.

      REPEAT: Unemployment Rate @ 19%.

      Care to submit any facts to support your assertions?

  13. fastEddie says:

    You can blame this on the lack of union jobs. When people could go to the local plant/mill/mine/whatever and get a job decent enough to support a family of 4 or 6, a house, 2 cars and maybe a summer cabin, CEO’s didn’t get away with paying people 1/400th of what they get paid. It’s called “collective bargaining”. The unfortunate millenials are starting when more the ever before, the game is completely rigged against them.

  14. Concerned Neighbour says:

    The one positive to take from this is the low birth rate. The single best thing we can do for the environment is slow the rate of population growth until it goes negative and global population starts to shrink. Seven billion is too many for the planet, and we’re heading to ten billion by 2050. Of course, the global economy depends on infinite growth on a finite planet, and therefore would likely collapse if population ever went back down to sustainable numbers.

  15. Slash says:

    FWIW, I would be considered “Gen X” (48). Most of the people I work with are younger than me by about 10-15 years (or more; sigh). A few coworkers are older.

    Most of my coworkers (esp. the youngers) work their asses off (this is an ad agency, BTW, in Dallas). So I’m not seeing any of the “don’t want to work” attitudes that some commenters are relating.

    I think home ownership (or lack thereof) is a function of: 1) age and 2) location. Who the hell can afford to buy a house in NYC-area or S. Calif? My guess is, not many people without a very high-paying job. And how many 20-somethings are really prepared to buy a house? Those that did so in the early part of the 2000s were probably doing it in response to the “buy a house now before it’s too late, real estate is a great investment” insanity, rather than in response to actual need. As for the “no kids” thing, I think that’s partly a function of age and also income/education. Those 20-somethings with no college education and crappy job prospects are not waiting to have kids until they’re economically stable. Many of them probably believe (if they’re giving it much thought at all) that if they wait for economic stability, they’ll die childless. The others (ones with college education) are just waiting until they feel more ready (ie, when they’re married, which isn’t a terrible reason to put off having kids). I don’t see any reason why “Millennials” should rush into parenthood. That seems like admirable restraint rather than cause for alarm.

    As for the employment statistics: it’s hard out there for people with no job experience. Despite rosy (in my opinion) predictions/assessments of how awesome the economy is/is going to be real soon, it looks like to me most of this “job creation” is in crappy service jobs. Meanwhile, old people (older than me, even!) are holding onto their crappy jobs because the last economic crapstorm crushed their retirement dreams. Poor 20-somethings are going to have to wait for more people to die to get decent jobs. There can only be so many Zuckerbergs and Bezoses. The rest of us will be non-wealthy drones (in the workspace, at least).

    I don’t blame the youngers for not being really eager to help a few people at the top become fabulously rich while they themselves struggle to pay for a house and kids (I don’t have a house or kids myself. I’m not really struggling, mostly because I don’t have a house or kids).

  16. lucas says:

    From the article,

    ” “Things are improving, but at a snail’s pace,” he said. The NAR points to its “Housing Affordability Index,” which shows that if a U.S. family was earning the median family income in 2013 of $63,623, it would have 175% of the necessary income to buy a median single family home priced at $197,400.

    That equates to about 20 million households able to purchase a home, but choosing not to. And Molony points the finger at the banks more than anything else. “The problem is overly restrictive mortgage lending standards, relying on arbitrarily high credit scores,” he said. ”

    The facts may be correct, but the conclusion is not. House affordability must be considered in terms of local conditions. If local median move-in ready houses are truly around three times local median wage, people will buy. I wonder how many of those 20 million households live, and more importantly, work in communities where the local median MOVE-IN READY house price are far greater than three times local median wage, for example, much of California.

    ~~~

    Admin: See this 2008 discussion: NAR Housing Affordability Index is Worthless

    • rj chicago says:

      When purchasing a house – people buy with the mindset of “how much is this gonna cost me a month”. The days of over leverage are in a word OVER. In re: to bank lending – thank Dodd Frank and the Fed for their cram down on lending. D. Kazriel had a good read about two weeks ago in response to the D. Malpas editorial in the WSJ about how the Fed has funded its bond buying QE by borrowing from banks such that banks have reduced capital to make loans etc.. Strongly suggest folks go back a couple of weeks on this very site and look up the article.

      Barry – could you repost the article if you have it near?
      rj

    • lucas says:

      Maybe there is an honest real estate agent out there. But I have not met one. We really need to change the house buying process because everything about it encourages all the wrong attitudes. With regards to NAR reports, agents use them to promote the bandwagon fallacy, “You are one of the 20 million who can afford a house, so buy now.” Then after they collect their commission, they joke among themselves about the fools who bought a house they could not afford and are underwater now through their own stupidity. I cannot keep a buyer’s agent because buyer’s agents never represent the buyer, no matter what they say. We need a compensation system that encourages buyer’s agents to actually represent their buyer. A piece of the selling agent’s commission (the current system) leads to obvious conflicts of interest.

  17. rj chicago says:

    As the headline says above:

    “Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

    Obviously this post by Barry has generated a reaction –

    I ask one thing – please folks don’t over generalize in broad generalizations about ‘groups’ of people. This does nothing but demonstrate utter ignorance – not stupidity – just ignorance of the micro conditions that exist in the economy / labor force. I know many younger people in the Gen X and Millenial crowd who do work their proverbial you know what’s off and there are others in those groups who ‘sit on the couch eatin cheetos’. It is the human condition – some produce and some do not. This also holds true for the Boomers of which I am one – I have worked all but one week since undergrad school and after near 35 + years of pedal to the metal I am still kicking albeit a bit more slowly than I used to. AND I know many in ‘my group’ who for whatever reason – health, marriage / divorce, family issues or just pure laziness and burn out – have opted to not work as hard or not at all. Some produce – some do not.
    Work and production cut across all demographics – Please folks for the sake of a good discussion don’t post broad brush statements that appear to apply to any group in its totality – that is just an exhibition of ignorance.

  18. [...] move back higher.”  Speaking of millennials, here’s how millennials (in the Sacramento region) compare to the generations before them at the same age.  Now look at how the first three (unemployment, living with parents and earning more than $40K) [...]

  19. intlacct says:

    Patience. They’ll find their way. Little things like social, demographic and financial gravity have a way of working their magic with time.