Who Are The Snowflakes Who Can’t Take the Heat?

I’m not a social media type guy – no Facebook, no Twitter, no Instagram –but due to changing personal circumstances I have spent some time on LinkedIn recently.  Last week a reporter posted a link to an article she had written for the publication Business Insider, itself based on an article on Bloomberg News

https://www.businessinsider.com/millennials-versus-boomers-wealth-gap-2020-10

Millennials may be the largest generation workforce in the US, but they’re also the least wealthy.

The generation holds just 4.6%, or $5.19 trillion, of US wealth, Bloomberg reported, citing recent Federal Reserve data. Boomers, however, are 10 times wealthier. They hold 53.2%, or $59.96 trillion, of US wealth. That’s also twice the $28.5 trillion of US wealth that Gen X holds.

This wealth gap is partially explained by the fact that boomers are older, so they’ve had more time to accumulate wealth. Millennials haven’t yet reached their peak earning years, and the youngest are still earning entry-level salaries.

But historical trends indicate that the wealth gap shouldn’t be this big. When boomers were millennials’ age in 1989, according to the Fed data, they held 21.3% of US wealth. That’s four times the 4.6% that millennials hold today.

This is not new.  The Federal Reserve releases this data, and other data on people’s personal financial situation, each year. And virtually all posts on LinkedIn pass with few if any comments.  

But in response to this one there were more than 600 comments, and a bunch of Baby Boomers, including those in positions of substantial economic authority according to their titles, pretty much lost their minds, with emotional responses that flew in the face of any evidence.  

https://www.linkedin.com/feed/update/urn:li:activity:6721562902681202688/

Showing that whether, to what extent, how and why later-born generations are worse off that those born previously is a massive issue hiding in plain sight, one that many people don’t want to hear about.  These are the sort of folks who accuse Millennials of being a bunch of “snowflakes” who don’t want to hear things at odds with “their truth.”  The reaction to this simple statement of factual data shows that perhaps the Millennials aren’t the snowflakes after all. If you don’t want to hide in your “safe space” with “your truth,” read on.

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I’m going to show some of the comments, in italics, to show the attitude displayed, and add some comments of my own.  Bear in mind that the titles of many of those posting these things are Owner, CEO, President or Vice President (of a company).  Or retired.

Boomers are OLDER, have worked 30-40 years now, many saved, invested & bought homes. Of course wealth by age 65 will be multiples of people half their age. Ever heard of the miracle of compound interest? As a boomer, my parents’ net worth exceeded mine by a lot in the 1980s when I was in my 30s & they were in their 60s.

This really isn’t rocket science. Younger generations are never as wealthy as older generations regardless of the name.  Younger generations are raising kids paying for their schooling etc.  older generations have had a longer life to build their careers and work their way up. It’s as it should be.

Of course they have less wealth, they are younger, and haven’t had time to build wealth.

Is this perhaps because boomers have been working decades longer than millennials?  Just a thought.

This report should infuriate everyone. The headline assumes we are stupid. Of course people (Boomers) who have worked for 40 years have made more and saved more and created more wealth than those (Millenials) who have worked for 10 or so years or less. This comparison is just blatantly invalid. 

The article does, in fact, compare the situation of Boomers decades ago, at the same age the Millennials are now, with Millennials today, and is thus not as misleading as these commenters claim.

Nonetheless by talking about “wealth” rather than other economic indicators, the article does confuse the issue for those who did not read the article and the last paragraph cited above.

So I responded with links to a Federal Reserve report, a Wall Street Journal article, and a Census Bureau report showing that the average income and work compensation of Millennials is also significantly lower than the average income and work compensation of the average Baby Boomer had been at the same age – after adjustment for inflation.

And other articles using Federal Reserve and other data showing Millennials have less of a credit card burden, and a higher savings rate, than Boomers and Gen X right now.  And that the suicide rate is rising, and life expectancy falling, for later born generations. 

They didn’t like that either.

Bullshit

Not true

Lawrence (Larry) Littlefield you can cite all the cherrypicked sources you want.  I’m talking about what’s really occurring.

It isn’t cherrypicked sources.  Falling well-being by generation is present in every source I’ve seen for decades.  And no one else presented any data from any sources in the comments, to show anything different.

“There are three kinds of lies: lies, damned lies, and statistics.”

Wow.  Do the math! We should be wealthier!  If we’re speaking in generalities, know that they lived a far easier childhood than most Boomers.

Actually, the data shows that on average Boomers were far more likely to be raised in stable families than were their children, the Millennials.

And after the high rate of teen-driven crime, vandalism, graffiti, teenage pregnancy, high school dropping out etc. of the Boomer years, Millennials were raised in more of a zero tolerance, highly-scheduled and controlled by adults world, for better or worse.  All of these indicators of social ills were lower among the Millennials than among the Boomers. So was substance abuse, at least prior to the opioid epidemic.

Some disputed the data, often based on personal anecdotes.  But we are talking about generational averages, not individuals.

There were roughly about 1 million Millennial millionaires before the COVID panic. I’m sure the hustlers will continue to hustle and make up for any generational wealth gap.

I hear LeBron James does OK too, but he is not typical.

All 3 of my children are making way more (in comparative wages, that I was,  Also they are all saving for their futures.  Maybe is has less to do with economic issues and more with responsibility, and upbringing.

Our children earn less than we did at the same age, inflation-adjusted.  They went to the same college, and had higher grades.  And the rent is vastly higher in the neighborhood where they grew up.  Or was.  

Not in my experience of 35 years in the medical field.

Yes people in the parts of the medical field, like professional athletes, have done pretty well on average, compared with most – and the price inflation for health care has vastly exceeded that of other goods and services.  For the opposite, check our journalists. And those who work in basic preventive health care, and public health.

And, since Lawrence Littlefield’s comment below mine has 62 replies I will ask my question here. Are you lumping Male + Female in your Baby Boomer number? Because I’m here to tell you in MY Baby Boomer world females were paid half of what males were offered—and I worked an 80 hour week for $120.00.

Yes, male and female combined.  

It is true that Millennial women in their 20s earn more on average than Baby Boomer women earned in their 20s, because Baby Boomer women faced more discrimination and had lower educational attainment.  So that was just catching up, and the increase in average pay for women was not nearly enough to offset the decrease in average pay for men.  

And now that most of the catching up is done, the average pay of women is falling as well, when adjusted for educational attainment.

But were those millennials working full time jobs or petty part time work? Boomers were more likely to get out of high school and join the work force, rather than to jump into the bottomless pit of student loans. Employers used to hired based on experience rather than a sheep skin.

Unfortunately of the majority of Millennials are not willing to put the weekly hours in, that boomers did and still are.

Part of the long-term decrease in annual pay and benefits is caused by a decrease in hours of paid work per year, but that isn’t because Millennials are lazy.  It is because a larger share of the work force is forced to be contingent workers — temps, contract workers, freelancers, etc.  No work is guaranteed, and no benefits provided.  

Back in the 1960s you could jump right into the work force and secure a full-time, year round job.  At that time there were very few jobs left that were like the stevedores in On the Waterfront, showing up every day to get paid work or not.  Now steady jobs are a privilege that fewer and fewer young workers, even with college diplomas, are able to get.  It takes many years just to obtain the privilege of being employees rather than, in effect, day laborers.

I think that part of the reason for the wealth gap is that boomers on average did not change jobs as often as millennials do today.  Many Boomers were rewarded with Pensions in addition to 401 K.  Also we have seen great appreciation in the value of 401 K accounts over the last few years which also contributes to this gap.

The possibility of a stable career with one company that ended with a pension disappeared long before the Millennials came around.  The last of the Baby Boomers didn’t even get that, aside from the public sector.

I agree 100% with that.  At 25 I was making $1.15 per hour, at 33 $10.50 per hour as an airplane mechanic and so on.  There was no magic bullet.  Work hard to make yourself useful and even indispensable and you will succeed. I always did what I loved to do and it paid off in the end.   I did not have many 40 hour weeks in my life.  Mostly 50 – 60 hour weeks that it took to get the job done.

Exactly. I am Prime Baby Boomer – born right after the war – 1947. I started working at a younger age, and was driving trucks at age 16 to earn my way through college. I have never been out of work for 50 years – until I took a temporary retirement. I am working, and earning, still. Many of us spent time in the military because the military was drafting us. Believe me, during my time in the military, I was NOT accumulating wealth at a starting pay of $88 per month. I had to earn my way and my pay all the way.

Blue collar workers who were on overtime for 50 years and were never laid off, and never had a company get bought or declare bankruptcy out from under them? How many people have had that opportunity, even if they wanted it?

One of the oddest objections to the fact that Millennials are paid less, inflation-adjusted, than Boomers had been at the same age came from an executive at one of the national Dollar Store chains.  As I responded, why does he think Dollar Stores have become one of the most successful forms of retailing, as “middle class” retailing shrinks?

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Many of those who did not dispute that Millennials are worse off economically blame them for being lazy.

How about working for it like most boomers did. Work hard, save and stop whining

Total BS.  It’s all about work ethic and values, or lack of.

Boomers came from an era that money is what it is all about and millennials can from an era that enjoying life is more of what it’s all about.

All you need is love?  Sex, drugs and rock and roll?  If you don’t’ remember the 1960s you weren’t really there? 

It is the same mistake that some commentors accuse the article of making, comparing the wealth of those near the end of a lifetime of work with those earlier in their careers.  People in their 20s and 30s are less mature and responsible than people in their 40s and 50s. But that was also true decades ago when Baby Boomers were in their 20s and 30s.

But perhaps the evidence does suggest that in the long run, a larger share of the 1960s generation did adopt Randy Newman’s attitude than the attitude of the people he used to know.

That video came out when the oldest Millennial was eight years old.

Jackson Browne had previously called out the Peace, Love and Understanding generation, in 1976.

Having been in the “Hiring Business” for a few decades, I feel I qualify to add my comment. The words and phrases connected with the millennials were that they wanted it THEIR way. They wanted THEIR HOURS, they wanted LIFE BALANCE etc. WE on the other hand took what was offered and worked “our as_es off” and got where WE are. Wanna close the gap? WORK MORE. 

Millennials also spent a great deal of time searching for workplace balance. My balance was a 12 hour day five days a week and a six hour day on Saturday. That was the norm. I appreciate what they’re doing, but you’re not going to earn as much money if you put in less time

They also have a much different work ethic. Maybe they should learn some things from the hard working, ‘whatever it takes to get the job done’ boomers 🙂

Because they don’t know how to work.  Ask anyone hiring.

The millennials in my family have been disinterested in working, still live at home, disinterested in learning to drive and spend most of their time gaming. Of the 8 (in my family) only 1 has a career, 1 is married and raising a family on spouse’s income, 3 have part time jobs in customer service and 5 have college degrees but are not using them. My siblings and I all pursued careers when we were their age, so I’m not surprised that their generation is not doing as well financially…

This is because they are getting their first jobs when they are 25, and because they are being subsidized by their boomer parents.  Are those subsidies from mom and dad included in the income calculation? This is Not be social problem we need to solve.

Baby boomers for most part; have a great work ethic. hashtag#FindaWayMakeaWay We got off our butts & were / are willing to create our opportunities & not wait for things to be handed to us! Etc etc etc….

Maybe this opinion results only from my own experience, but I think boomers were more motivated than the subsequent generations.  That’s OK; when we boomers die what assets are left over will flow back to our millennial children; filling the gap.  I feel for their children, though.

Are we sure this isn’t because millennials are deferring adulthood and don’t begin working until they are well into their 20s. I started when I was 12.

The labor force participation and employment rate of Millennials in 2016 was significantly higher than the labor force participation rate of Baby Boomers in 1975.  That was true even of parents with pre-school age children.   That, like everything else I’m saying, is simply a matter of fact as shown by long-running data series.

A lot of it can be related directly to one four-letter word – “Work.”  “Boomers,” or let’s call them the “earn and save for it,” generation, wasn’t as susceptible to the instant credit and “gotta have it now,” attitude of the millennials.  Too much bought on credit, not working their way through school and lacking fiscal responsibility for the most part, in my opinion, contributes to this “horrible,” wealth gap

Boomers believe in working for what they have. Millennials want it handed to them.  Want to fix the gap? Teach millennials how to work hard.  (of course I’m generalizing here, but so is the article.  I know some very hard working ‘millennials’, but I have never heard a boomer respond to a request by saying “not my job, you don’t pay me enough to do extra work.”)

Clearly this person never worked in the public sector, or any unionized industry.

It’s unfortunate and possibly anecdotal but boomers were such a large labor force as a percent of the population that most had to fight for and prove themselves to have and keep a job. They were raised by depression era and WWII parents who had an appreciation for and understanding of both sacrifice and work ethic. Their children for the most part were taught those values. 

When millenials entered the work force they were a smaller group as a percent of the population, were two to three generations removed from the depression and WWII and raised in a culture of excess. They were rewarded for showing up, told that other’s were responsible for their actions and that they were entitled to the largess they enjoyed.

Actually, the Millennials are a larger generation than the Baby Boomers. The are an echo of the Baby Boomers, since although the Boomers didn’t have as many children each, that still added up to many children.  And immigrants – and global competition — are on top of that.

Those in the front end of the Baby Boom, following a smaller generation, benefitted from more job opportunities and lower housing costs.  Those at the back end, like myself, found fewer opportunities and inflated housing prices, because the prior Boomers had taken them all.  

Those at the back end of the Millennial, Baby Boom echo generation are facing the same difficulties as those at the back end of the Baby Boom.  But those at the front end of the Millennial generation received none of the advantages of the 1960s generation, as the economy has been weak, and housing prices inflated, since the dot.com bust in 2000.

I worked overtime or a second job most of my life. I bought my first house at 27 and was still single while I was working ad still earning my college degrees. I put money away in different accounts, hardly ever ate out and did not buy a new car until I was 30. work hard while you are young and watch your spending is my advice to our younger generation. i gave my kids this advice and they all worked jobs while they were going to school and watched their budgets.

I see what you are saying daily. I have told more than one person that our motivations are completely different. It’s why I still work 18 hours per day at 55 years old and it’s why I have no less than nine steady income streams.

Perhaps these Boomers don’t recall that attitude they had when they were in their 20s and 30s, and hearing these sorts of things from their elders.  They mocked it, and made good money doing so.

You would think there were no hippies in the 1960s.  

But I will agree with one thing.  The best way to develop a work ethic is to work for pay as a teenager in a part time job, getting fired when you can’t hack it and having to try again. That’s where I learned to work hard.  It was important on the job training, as important as anything I learned in school, that managers and business owners in low-paid industries once provided to young workers.

That on the job training for teens is mostly gone, because those low wage jobs now go to adults – generally at a far lower minimum wage than I was paid as a teenager from 1977 to 1979.  Labor force participation and employment among teens are way down from those years.

And frankly, many of the extra hours some people work are just “face time.”  They aren’t just working at the office, they are living their entire lives at the office, shopping, socializing, attending to personal business, etc.  Rather than getting the job done and going home – and perhaps working a little more when they get there.

Meanwhile, here is an honest Millennial view on hiring Baby Boomers, from a guy I find to be a straight shooter.

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Some commented specifically that Millennials are not sufficiently dedicated to their employers, and are unwilling to do work in excess of their current salaries for some unspecified later opportunities.

What the hell did you expect the boomers have been working for 20+ more years than the millennials. Work your ass off, delay gratification, save, invest, live within your means and stop lecturing us Boomers on how to do things. Shut up, watch and take notes. We’ll see you when you catch up.

You take whatever job is available to get your foot in the door, and work your tail off to show your worth. Oh, and BTW … also get to work on that Master’s degree. Before long – you’re making a career of it. Millennials, however, generally insist that everything be handed to them without necessarily having earned it. Entitled comes to mind. No one starts out in the boardroom, but Millennials think the mailroom is beneath them. No one owes you a career. You carve a place for yourself by outworking everyone else, out-performing everyone else. If you don’t make it – it’s on you.

Love your phrase “no one owes you a career”.

I’ve noticed the same attitude.  Boomers attitude is “what can I do for this company”? Millennials attitude is “what can this company do for me?” I was shocked when I first noticed it 10 years ago.

Perhaps some Millennials watched their parents work their rears off for a company for a decade or two, and then get downsized and never rewarded for that dedication.  People who just worked as best they could, never asked for a raise, never demanded a promotion, and expected to be rewarded – weren’t. 

In fact, economists believe that wage stagnation has resulted, in part, from workers who came of age during recessions, are “scarred” by the experience, and therefore have low expectations and make limited demands.  I, and they, expect that to sum up the Millennials.

https://www.wsj.com/articles/the-recessions-economic-trauma-has-left-enduring-scars-1462809318

The reality of this economy, however, is that not only does no one owe you a career, you flat out aren’t going to have a career.  Just a series of jobs (or and perhaps not even actual jobs just contract hours), and any promises of later advancement are likely to be illusory. The ideal of working your way up in a large organization really went out the door with the Silent Generation, the one that preceded the Baby Boomers. Millennials are more likely to have their job (or contract hours) exported to low-wage countries or automated away, even if they are college-educated office workers, than to have someone make good on the promise of a career.

https://www.marketwatch.com/story/telemigrants-are-coming-for-your-white-collar-job-and-a-wall-wont-stop-them-2019-02-25

Think of these as 21st century migrants — telemigrants — who are competing for American white-collar and professional jobs without ever setting foot in the U.S. This tidal wave of talent is coming straight for the good, stable jobs that have been shielded from globalization. America’s middle class won’t welcome this new competition, and a wall on the southern border won’t stop them.

Telemigration is growing at an explosive pace. Employers find these workers convenient and flexible as well as low cost. These talented foreigners are happy to work for much less than American workers with the same skills since they live in countries where $5 an hour will buy a middle-class lifestyle.

They aren’t covered by the same labor laws, or health, safety, or environmental regulations. They don’t ask for severance pay, paid holidays and maternity or paternity leave. Nor do they contribute to Social Security, help pay for medical insurance, pensions, or any other advanced economy social policies.

And the companies that outsource American jobs still expect to sell goods and services to Americans at developed country prices.  With what money I don’t know.

Here is where Millennials need to become more like Baby Boomers, and it isn’t they way those commentors would think.   Self-employment hit a low in the 1970s, as the Boomers were swarming into the labor force with a “generation gap, stick it to the man, I’m doing it my way” attitude.  There were many negative consequences of this.  But the positive effect was more entrepreneurship.

If you are a Millennial and read the comments above, you see the attitude that employers actually have toward you, and should realize that today’s organizations (business and otherwise) aren’t going to meet your needs.  They are controlled by people who feel very entitled.  If you are going to work like a dog, not have a career, not be able to stay in one organization, and not make much money anyway, why not get together and start your own brand new organization?  

That’s why I never worked for anyone. My attitude has always been what can this company do for me?! It’s a two-way street. I’m just a boomer with a millennial mindset.

That is actually more a Boomer mindset than a Millennial mindset.

IBM is a shell. Shouldn’t people be rebelling against Apple by now?  This is one way Millennials need to change.   Find an empathic Boomer to show you how to do it.

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When not criticizing the failure to build wealth because of not enough hard work on the income side of the household ledger, Boomers blamed Millennials for spending too much and not saving.

What’s not being said here is that a large number of young people seem to believe that they should have everything their parents have right now. This “I deserve it now” mindset has mortgaged their futures and will keep them impoverished for many years to come. The obvious answer is self-discipline. As a boomer, I did without many things so that I could retire in relative comfort.

Starbucks?

Millenials buy $5 coffee like water. Just think if they made their own. Compounding over Time is the most important part of investing. What would $10 per day compounded over 40 years be? The difference…

Many Millennials also lack the work ethic and savings habits of the Boomer generation. Boomers worked multiple jobs, settled for less expensive options, avoided buying on credit, and delayed immediate gratification. Double your 401k contribution and live frugally and wealth will be gained.

Hillary, you are comparing apples and oranges. Generally speaking, Boomers are savers and Millennials are spenders. 

Your post is exactly what I was going to post.   Additionally, there seem to be “must have” expensive items that were not even invented when I was a young boomer on which I could not spend my salary. (i-phones, 80″ flat screens, high end laptops, Starbucks, etc. Maybe boomboxes and Sony Walkmen in 1982 dollars were just as expensive; I don’t know).

I’ve tried to turn millennials into millionaires and the only thing they seem to be interested in is what baubles they can enjoy today.  That’s fine if that’s what you want, but it’s not my fault you can’t have baubles and wealth. I have wealth now that I am older, because I didn’t enjoy baubles when I was younger. Put away the baubles, store your labor in tangibles that grow and produce income. Create additional streams of income and multiply your earning potential. That is how you grow wealth.

Take a broader view and it may look less dismal: The parents of the depression repaired their own cars, darned their socks and patched their children’s clothes.  The children of the depression mostly grew up to repair their own cars, cut their own grass, pack their own lunch and bank every dollar they didn’t have to spend on living. 

The boomers grew up to cook their own dinners, wash their own cars, change their own flat tires, drive their families on vacation, splurge by going to the movies once a month, save for retirement and spend their “extra” money on little niceties. And raised the “me” generation.

Slowly we have migrated away from saving every penny we can to a life philosophy of enjoying what those pennies can buy. Go to lunch daily, dinner out a couple of times a week, Tahitian vacations, outsourcing yard work, housework, simple repairs, throw away or donate what we’re tired of and buy season passes to Disney. 

Tahitian vacations?  Actually, the Boomers themselves were nicknamed the “Me” generation in the 1970s.  

https://www.thevintagenews.com/2016/09/05/priority-baby-boomers-nicknamed-generation-due-perceived-narcissism/

Boomers consistently say the same things about the Millennials as were being said about them back in the day.  They are projecting.

As low as the savings rate is for seniors, I suspect that millennials are saving nada. If you read financials pundits then they will tell you that it is the overall savings rate for the whole country that is the problem.

Of course the boring numbers say otherwise.  In the 1980 election, candidate Ronald Reagan bemoaned the fact that the U.S. personal savings rate was only 8 percent, less than other developed countries.  As President, he took away tax deductions for interest on debts and added tax breaks (401K, 529, IRA, etc) for saving.  Despite this shift in incentives, in the year 2000 – when Baby Boomers dominated the adult population – the savings rate had fallen to zero.  Perhaps “Saying the Unsaid in New York” readers are more likely to appreciate a link than LinkedIn readers.  

I have recently seen articles indicating that the personal savings rate of Millennials is – wait for it – back to 8 percent.  

On the spending side, Millennials as a group have spent far less than Baby Boomers on the big ticket items, houses and cars, despite being badgered to get with the program and buy them.  And many are living with roommates or their parents in order to save.

Should they be saving even more and spending even less?  As someone who was the cheapskate legend among those who knew me back then, I would say yes.  In fact I did say yes, in a series of posts starting with this one.

https://larrylittlefield.wordpress.com/2014/08/23/repost-how-then-should-we-live-thoughts-on-possible-adaptations-in-household-economics-in-the-wake-of-generation-greed/

But consider this:  what will happen to consumer demand in the U.S. and global economy if more people choose to live my way?  Who do these business Owners, CEOs, Presidents and Vice Presidents plan to sell to? Perhaps they ought to speak with their marketing departments about the message that has been pushed on people for the past 40 years, and what might happen if it no longer works?

https://www.theglobeandmail.com/business/article-a-qa-with-david-rosenberg-pandemic-economy-calls-for-discipline-and/

There’s no restaurant that’s going to like what I have to say on this score. But we’ve learned how to cook. That’s part of what I call the homebody economy. And I think this is going to be a secular trend. We’ve become more self-sufficient.

I think how households and businesses approach finances and their balance sheets is going to go through a long-term structural shift. There’ll be a greater appreciation for savings, cash and liquidity. The debt-financed spending spree that underpinned economic activity these past number of years has fallen by the wayside. That is going to constrict aggregate demand growth for a long period of time. But it doesn’t mean that we’re not going to be a happier society, just a society that’s going to learn to live within its means.

Many if not most of today’s employers rely on Americans spending more than they can actually afford, and borrowing or not saving enough for retirement to cover the difference.  This, and global competition, means that Millennials cannot count on those jobs.  New businesses and types of businesses are going to have to be created to allow them to live better on less, since they are stuck with less.   Millennials will have to create them, because for existing businesses that would mean lower sales and making less money. 

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In addition to not working hard enough and spending too much, Boomers faulted Millennials for not investing wisely.

I don’t care who you are. If you don’t invest wisely (more than just a 401k) you’ll never make any money. The market has exploded over the last few years and if you buy wisely in stocks (you can make very large sums of money over time). Do your homework and be disciplined ( not emotional) about investing. Again it’s a risk. Do your homework. You can make money. If your not comfortable about it contact a reputable financial advisor to assist you and keep you on track with a plan for you to follow. Do not be an emotional investor. Be consistent with putting any sum of cash away and it will pay off eventually but it will take time.

Baby Boomers, however, inherited a situation where every asset was undervalued relative to the income it produced, allowing a high rate of return going forward.

Whereas today we are in an “everything bubble” inflated by rock bottom interest rates and quantitative easing.  The “market has exploded” because the federal government has borrowed $trillions that Millennials will have to pay back to prop it up. For three decades, in fact, every time asset prices have started to fall, the federal government has stepped in to keep them inflated.   That is income redistribution from younger savers and asset buyers to older and richer asset holders and sellers on a massive scale. Why is the Federal Reserve issuing reports on wealth by generation?  Perhaps because this is the downside of their policies to “save the economy,” and they are worried about it.

Nothing would do more to close the wealth gap more than an asset price collapse, with plunging housing and stock prices and bond defaults.  It would wipe out a portion of accumulated paper assets, but it would allow Millennials to buy in at lower prices that would allow some kind decent future return.  You can’t blame Millennials for being unwilling to get in on the ground floor when they are stuck two levels down in the basement, and every time the elevator threatens to descend below the 10thfloor the Fed launches another round of QE.  

As it is, a business that does not exist yet is not overvalued.  Building it is better than overpaying to buy it, but an asset price crash would create more room to build.   And as for housing…

Maybe I am missing something as I can’t quickly see the data this is based on but I suspect this is mostly an artifact of real estate wealth.  The boomers have ridden a long, long steady increase in the value of residential real estate.  Millennials have not had (and may never have) the opportunity to ride that gravy train.   Really unclear to me what happens as boomer’s estates go on the market and the population of millennials do not have the wealth to buy at current market prices. Generational drop in value of residential real estate?

I’ll keep saying it — don’t overpay for Generation Greed’s houses!  Hold out until you are 50 if you have to.

https://larrylittlefield.wordpress.com/2017/12/09/fannies-mae-and-freddie-macs-stealth-economic-war-on-the-millennials/

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Some pointed to another overpriced asset, a college education.

Lets not avoid the elephant in the room here. Millennials and their parents got ripped off by the corrupt collegiate educational system.  The ONLY profession on the planet that saw year-over-year salary, benefits, perks and employment guarantees during the were college/universities administrators and educators.  We saddled our next generation with the lie and associated debt that they had to attend college to be successful and then shipped jobs overseas to China in massive amounts.  How many gender studies or social activist jobs are there….really!

The Millennials who went to college started from a different place than us boomers. First a public university costs 13-14x what it did in the 70’s vs 4x overall inflation. I know as my son and I went to same school 37 years apart. I would say public colleges were impossibly cheap in the 70’s and they are slightly overpriced today. 

So, many college graduate kids enter the workforce at -$30-50k worse off in a job market where global competition has suppressed wages in many jobs and non-college grads without enough skill get killed on wages in competition with China, Mexico, India, etc.  The real solutions still come down to education and skill development and a mental toughness and discipline driving us to work hard and save and not take for granted this wonderful life we have. The Chinese and Indian students take education extremely seriously compared to the USA and are not whining about how hard engineering and science, etc is but getting it done in disproportionate numbers because they HAVE to if they want to succeed here or in their home countries.  We are worried about having 3 bathrooms and 3 cars before people in many parts of Asia have 1 bathroom or 1 car. We can be soft at our peril….

I think part of the problem is that too many young people are/were going to college just to “find themselves,” wind up wasting too much time partying or other activities only wind up with huge debts four years later and degrees for which they have no idea what to do with.

Many Millennials picked college degrees that are not in demand. Who’s fault is that?

I agree that too many people go to college, leaving many in jobs that ought not to require a college diploma.  But whose fault is that?  Employers have decided to make such a diploma a requirement for any and all entry level jobs, whether scholarship is part of the work or not. Credentialism is the reality Millennials are facing.

And the data on changes in median earnings by educational attainment is clear. It is falling for the college educated, but still falling faster for those who have just an associates degree or a high school diploma.  Those who went into the trades have gotten killed, and in unionized situations Millennials have been on the wrong end of multi-tier contracts – when they haven’t been hired as temps or freelancers.  At one time people got a college diploma to get ahead. Now you need one to reduce the extent to which you fall farther behind.

As for partying and studying art history, I’m old enough to remember that these are the very accusations that were hurled at the Boomers themselves.  In part because many were pursuing higher education for no other reason than to avoid the draft, something they could afford because for many public college and university tuition was free at the time.

And wasn’t the 1960s generation the one that invented sex and drugs to go with the Rock and Roll.  It certainly seemed that way coming along behind them.  Again, Boomers are projecting their own youthful behavior on to Millennials, as if every Boomer became an engineer and worked for NASA and every Millennial lost their virginity and stated smoking pot at age 14.  There are plenty of both sorts of youths in both generations, but the data shows the Baby Boomers were the partiers.  

Take the context out of generational equity, and they are happy to cheerfully brag about it.

Even one of the richest, smartest and most entrepreneurial among them.

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Finally, some Boomers think Millennials are ingrates to even raise the issue of wealth, since they will end up inheriting wealth from the Boomers.

And who will end up with the Boomers assests and property?  The Millennials. My son is already asking about his inheritance and how much longer I am going to live.

And who do you think will inherit the boomers wealth? Hello millennials!

Chances are that as many boomers die, many millennials stand to inherit large sums of money.  The boomers, for the most part, didn’t have that opportunity. The millennials have a lot to look forward to

Is this going to be yet another “us vs. them” divisive issue? Let’s keep in mind that a good many of those millennials will eventually inherit a tidy sum from those “wealthy boomers”.

Btw, who do you think all the Boomer’s wealth is going to be left to when they die?  As a generation, the Millenials stand to inherent more wealth than any other generation, ever. Cheers!

For Millennials who have Baby Boomer parents who were both successful and cheap, and whose estates will not be complicated by multiple divorces and remarriages, things may end up that way.   But that sure as hell won’t be the typical situation.

For Boomers, the median for 401k and IRA balances is $144k.  They may have a pension, but these are rarer everyday. SSI could add up to $2-3k per spouse.  If they take 10% a year from their savings that would give them $14.4k per year and would last roughly ten years while facing increased life expectancy.

My brother has worked for companies that handle the finances of older, well off people, most of whom have been in the Silent Generation that preceded the Baby Boomers, and was even better off.  Doctors, lawyers, business owners, successful people, wealthy people. And he says what keeps him up at night is the concern that at current low interest rates, given the possibility of an unusually long life or a need for custodial care, some are going to run out of money.  The asset price crash that would help Millennials would make that even more likely. 

And since my expertise is public policy, moreover, I acutely aware that while some Millennials will inherit wealth individually, all Millennials will inherit massive collective debts and other left-behind liabilities.  Not only an on-the-books national debt now soaring past 100 percent of GDP, but contingent liabilities, public old age benefits that are underfunded – despite later-born generations paying more and getting less – and a depreciating infrastructure, public and private, due to decades of high consumption and low investment. The Boomers could have taken this advice from 1996, but they didn’t. Still well worth a read — don’t say we weren’t warned.

If you were to stack up the individual wealth that some Millennials will be inheriting against the collective liabilities that all Millennials will be inheriting, I wonder how the two will compare?  I think the latter will be greater, and that some of the former is directly related to the latter.  Some Baby Boomers have done enough for their own children to fully offset that collective legacy, but most have not.  

And that poisoned collective legacy grows worse by the hour.  You’d think that in this contentious political year there would have been some discussion of that legacy, but there has not.  Perhaps because of which generation continues to set the agenda, and determine what may and may not be talked about.

By the way, George Carlin was not a Baby Boomer.  He was born the same year as my parents, a member of the forgotten generation between the Greatest Generation and the Boomers that was eventually called the Silent Generation.   But he later identified as a Boomer, as he explains at 3:00, in a video that shows what that actually meant.

In any event, Get off my lawn.

3 thoughts on “Who Are The Snowflakes Who Can’t Take the Heat?

  1. larrylittlefield Post author

    “Honestly, I truly believe it’s because the Boomers know they are at fault.”

    I think politics, dominated by Boomers, is currently as divisive as it is because it is about finding someone else to blame. But there is good and bad with each generation. Here is what I wrote when I ran as a minor party protest candidate for state legislature, in 2004.

    http://www.ipny.org/littlefield/civicunion2020.html

    “Aside from lobbyists who are just out for a dollar, politics appears to be driven by two different concepts of the word “freedom” that emerged in the 1960s and 1970s, one good and the other (for lack of a better word) evil. The good freedom might be called freedom of identity, or of lifestyle. For a brief period after World War II, many Americans believed that if you didn’t look like, act like, think like, and live like everyone else, then you shouldn’t be accepted. The idea of America as a land of social conformity is mostly gone, but politicians can still get elected by manipulating 35 year old resentments with tribal appeals to groups of people, and the invocation of “values” issues on which they have no intention of changing anything. Sadly, tribal politics determines how many people vote, among those who vote at all. They are suckers.”

    “The evil idea of freedom is freedom from responsibility, which has both a “liberal” and a “conservative” version, depending on which responsibilities one does not want to meet. Liberal Democrats have sought to attract votes by telling the poor and not so poor, the old and not so old, the sick and not so sick, and others that they do not have personal responsibilities to work and earn their own living, or to take care of their family members. To knowledgeable critics, their excuse for irresponsibility has been “social realism, ” the assertion that this is the way people live today (because they are free to live that way) and government programs, paid for by someone else, must limit the damage. And they have cultivated a sense of entitlement to assistance, causing recipients of public benefits to feel anger at anyone who dares to make demands on them in exchange.”

    “Conservatives and Republicans have sought to attract votes by telling the better off that they do not have social responsibilities to their communities, to the less well off, to the rest of the world, and to the future, particularly with regard to taxes and debt, but also with regard to the environment. To knowledgeable critics, their excuse for irresponsibility has been “economic realism, ” the assertion that the affluent are self interested and mobile, and if you make demands on them for the benefit of others, or for the benefit of the future, they will take their assets and go elsewhere, leaving you worse off than before. They also cultivate a sense of entitlement, telling the affluent that their position of privilege is the result of their own moral superiority, not social advantages or luck or (as the business scandals show) worse, and that they do not owe anything to anyone in exchange for it.”

    The poster child for freedom from responsibility — personal, social, business, every kind there is — is Donald Trump. That’s why I say he is THE MAN of his generation.

    1. GenXer

      That politics are still dominated by Boomers, when Gen Xers should have greater representation by now, has kept us from making any progress as a society or country. I agree that it’s as divisive as it is because they try to place blame anywhere else but where it belongs – on themselves. Most bewildering is Trump blaming Biden when he’s, unfortunately, been our president the last four years. Not that I’m a fan of either, but we need Trump out.

      What you wrote is spot on. Both parties have been shifting blame for decades now, and both are wrong in their ideas of “freedom”. A society simply cannot thrive on Individualism. People, as a community, have a responsibility to one another, rich and poor. It’s so sad to see what this country has descended into.

      Trump truly is the man of his generation, you’ve got that right. We have a selfish, self serving Malignant Narcissist in the White House. We need Boomers entirely out of politics if we’re ever to make progress. That’s my opinion anyway. Although I fear the damage he has done to this country is massive.

  2. GenXer

    Fantastic article, Larry. Thank you for saying the unsaid! Generation Greed, indeed.

    You might be interested in the Rand Corporation Trends in Income report that backs up everything you’ve pointed out about all generations after Boomers having not achieved the wealth that they had, at any age: https://www.rand.org/pubs/working_papers/WRA516-1.html. Time also covered the report: https://time.com/5888024/50-trillion-income-inequality-america.

    Boomers are sticking their heads in the sand and outright refusing to see, let alone comprehend, that things are very different than when they were our age. Not only the truth about income inequality but the astronomical rise of healthcare, education, and housing costs. I honestly don’t believe there’s any way to get through to Boomers at this point. They’re the most narcissistic generation ever born. They have no concept of anything but their own warped reality. They project what was said about them, as well as place the blame for their own failings, on to the younger generations.

    Boomers fell down on their parenting job of all of us, and that is why we haven’t learned and don’t know the things Boomers apparently hold so dear. They didn’t pass down their knowledge. They certainly didn’t pass down any values instilled in them by Greatest and Silent Generation. Yet, to Boomers, it’s our fault for not already knowing these things, and not their lack of teaching or parenting. It’s our fault that Boomers gave out participation trophies as well, apparently. It’s absurd the length they will go to in order to avoid responsibility. It’s yet more of the “Screw you, I got mine.” that defines the entire generation.

    Honestly, I truly believe it’s because the Boomers know they are at fault. But, being the narcissists that they are, they can’t possibly accept they did anything wrong ever, so they’re creating their own reality and placing blame on the younger generations that had nothing to do with it. They simply refuse to take any ownership or responsibility for the role they played in the world being as it is.

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