
Revealed: the 30-year economic betrayal dragging down Generation Y’s income - sasvari
http://www.theguardian.com/world/2016/mar/07/revealed-30-year-economic-betrayal-dragging-down-generation-y-income
======
forgetsusername
I sort of went down the rabbit hole in The Guardian's Generation Y coverage,
and ended up in an article with Millennials confessing their greatest fears:

 _“I worry that I’m never going to live up to my own expectations. I live in
terror that I will wake up on my 50th birthday in a perfectly ordinary house,
with a perfectly ordinary family and unremarkable job – living an
unremarkable, ordinary, average life._

If these are your biggest fears in life, take a step back to realize what
you've got. Entitlement and bizarre expectations about what "life" is are to
blame here. Not every one is above average.

~~~
speeder
I am 28 years old.

My biggest fear in life is waking up on my 50th and not owning a house, not
having a family, and not having a ordinary job... because so far is how my
life is going.

I currently live with my parents, have negative net worth, have no friends, no
girlfriend, no job, and can't afford to buy a new PC, and my current one is
trying to die on me, and I need it to do the occasional odd-job that shows up.

~~~
kingkawn
Obviously if your life is not matching the expectations built into you from
before you were aware it was happening it is because the expectations are
bullshit. I am looking forward to a return to communal living and away from
these ridiculous status markers being labeled independence and success.

~~~
fucking_tragedy
Where do you get the idea that we'll return to communal living?

For hundreds of years, we've been taught that it is "I versus Everyone Else"
in economically liberal societies. To think that will go away, and not go into
hyperdrive, when people are desperate, cold and hungry seems unrealistic to
me.

I truly want my assumption to be proven wrong, though.

------
radicalbyte
I'm on the edge of this group (1980/1982-wife); living in the UK house prices
were rising twice as fast as my wage. If I was just 2-3 years older I could
have bought a house for 80k instead of the 250k I had to pay years later (two
double-median incomes).

This has given my drive I didn't have before: I actively manage my career
(next step being starting for myself) and have feeling for
investments/planning that I wouldn't have otherwise had.

~~~
forgetsusername
> _I 'm on the edge of this group (1980/1982-wife)_

Hey, you're me.

> _If I was just 2-3 years older I could have bought a house for 80k instead
> of_

Yeah, this stuff is frustrating in hindsight. But the economic tide ebbs and
flows. It's important to be ready for the next opportunity; it's not always
obvious in advance.

Personally, I believe ours will come as the Baby Boomers (who haven't saved
enough) try to liquidate their McMansions to fund retirement and find no
worthy buyers. We just have to stop them from voting themselves legislation to
compensate.

~~~
efaref
> We just have to stop them from voting themselves legislation to compensate.

Too late. In the UK at least, the state pension is being increased from
~£110pw to ~£150pw, despite the fact that pension payments are among the
government's biggest liability and we're apparently in a time of austerity so
severe that we're required to starve disabled people by removing their living
allowance unless they submit to humiliating tests.

Meanwhile, the chancellor is planning some more pension "reforms" later this
month, which is most likely going to involve removing the deferral of tax on
pension contributions, i.e. moving all the tax payments that were due to
happen in fifty years' time to today. That means the current pensioners will
benefit from tax paid on current pension payments as well as tax paid on
current pension contribuitions. By the time millennials retire, the deferred
payments will have expired, and only the current contributions will remain.

Add on to that the massive blackhole that will be the forgiving of student
loan debt (which even by the government's own optimisitic predictions, 40% of
which will be unpaid over its lifetime - many experts predict this will be
higher), and you begin to see exactly how fucked millennials will be come
retirement.

------
dpina
This appears to be correct based on everyone of my age sharing the same
problems, but the article doesn't give any reasons on why it happens. Would be
good to get some more information on causes as this is a rather very
interesting topic. Any HN readers have good sources?

~~~
lkrubner
The world economy slowed in 1973. No one really knows why. Some books focus on
the effects in the USA, some focus elsewhere. In the West this has been "The
Great Stagnation" whereas in several countries in Asia this has been "The
Great Bounce Back" as formerly wealthy civilizations, such as China, recovered
some of the ground they lost in the 1800s.

Sad to say, I'm not aware of any books that tell the whole international
story.

For the USA, there have been an abundance of books and articles showing the
decline of the middle class:

[http://billmoyers.com/2015/01/26/middle-
class/](http://billmoyers.com/2015/01/26/middle-class/)

Tyler Cowen came up with the phrase Great Stagnation:

[http://www.amazon.com/Great-Stagnation-America-Low-
Hanging-E...](http://www.amazon.com/Great-Stagnation-America-Low-Hanging-
Eventually/dp/0525952713/ref=sr_1_3?ie=UTF8&qid=1457354526&sr=8-3&keywords=tyler+cowen)

Some writers treat this as a political issue:

[http://www.amazon.com/Boiling-Point-Republicans-Middle-
Class...](http://www.amazon.com/Boiling-Point-Republicans-Middle-Class-
Prosperity/dp/0679404619/ref=sr_1_4?ie=UTF8&qid=1457354859&sr=8-4&keywords=decline+of+middle+class)

Some writers focus on long-term factors that have little to do with politics.
Robert Gordon got good reviews for his historical analysis of the specialness
of the 2nd Industrial Revolution 1860-1940, and why the current era is not as
robust:

[http://www.amazon.com/The-Rise-Fall-American-
Growth/dp/06911...](http://www.amazon.com/The-Rise-Fall-American-
Growth/dp/0691147728/ref=pd_rhf_dp_s_cp_1?ie=UTF8&dpID=51N3J9armvL&dpSrc=sims&preST=_SL500_SR92%2C135_&refRID=0TSBYD4ETDER5E9DVG22)

~~~
TheOtherHobbes
1973 was the first oil crisis. Oil prices went up by 400% and there was a huge
spike in inflation.(There's a book waiting to be written about the curiously
close relationships between the Saudi and the US oil establishments, and the
Saudi influence on US foreign policy since the 70s.)

The oil crisis gave the Right a convenient pretext to blame wage increases for
inflation.

This became a standard element of economic orthodoxy, and ever since then
increases in wages and salaries - which were a driver of post-war prosperity -
have been labelled "inflationary', even though inflation is primarily caused
by other factors.[1]

By a remarkable and unexpected coincidence, this was the moment when labour
share of GDP and middle class prosperity both started to decline. See e.g.

[https://en.wikipedia.org/wiki/Wage_share#/media/File:Adjuste...](https://en.wikipedia.org/wiki/Wage_share#/media/File:AdjustedWageShareUSAFRGJapan.PNG)

[1] The Bank of England always plays on this. About a year ago there was talk
of increasing interest rates to "head off inflationary pressure" just in case
wages _might_ have started rising in the future. Meanwhile asset inflation in
the form of rising property prices is ignored, and more obvious drivers of
increasing costs, like consumer energy prices, are downplayed.

~~~
lkrubner
No one knows why 1973 was the beginning of a long era of economic
sluggishness. Oil prices crashed in the 1980s and again in 1990s and again
after 2008, but none of these crashes restarted the post-war boom. Adjusting
for inflation, oil achieved new lows in the 1990s, and again in recent years,
but the very low prices that we see are not enough to bring back the years
when the economy grew at 4% on a regular basis. Nothing has revived
productivity growth to the 3% a year seen for most of the era 1945-1973. If
the spike in oil prices in 1973 was enough to start an era of sluggish growth,
then why didn't growth restart once the oil prices collapsed? There are many
theories about this, and many brilliant people have written long books trying
to explain the events of the last 40 years, but no one knows for sure, and
there is nothing like a consensus on the issue, which is why I wrote "No one
really knows why."

------
agentgt
I'm 35 and for the most part like many software engineers relatively well off
so I'm probably myopic of the full situation but here is what I have noticed
differently among peers 5 to 10 years younger than me (that are often
developers as well)..... they don't seem to mind not having wealth.

When I was college as an intern I opened a Roth IRA and put my earnings into
it (I was fortunate to go a relatively cost effective school). I was
absolutely afraid I was going to retire with no money.

When I got out of college my first goal was to buy a two family or something I
could rent and live in. Which I eventually did waiting for the market to tank.
I negotiated for raises or position title changes as often as I could. I
absolutely was completely focused on provincially building wealth... people of
similar age to me were equally concerned.

I can't say the same for folks 5-10 years younger (I'm not saying there aren't
wealth focused millennials.. I just haven't met many yet). For example one
individual I know went to Europe out of college used some parents money for as
long as possible and then eventually came back home (the thought of asking my
parents for money makes me uncomfortable).

I somewhat admire the guts it takes to not worry about the future like that
and live life (and this is coming from someone who left a job and started a
company).

------
andrewclunn
So Australia didn't get on the free trade agreement train. Could it be that
decreased prices from outsourcing labor helps those who are already
established and the poor in foreign countries, but at the expense of unskilled
and new workers at home?

------
11thEarlOfMar
Wasn't sure at first why the title bugged me. I think it is the word
'betrayal'. Parents want their kids to do well. And what that means is likely
evolving over time. But is it a right to do better than your parents? Is it an
entitlement? I don't think so. Each generation has issues it needs to solve,
and by definition those issues are left to them by prior generations. One
generation had to survive the Great Depression. The next, World War II. Then,
political upheaval of Vietnam. Then 'stagflation', Internet bubble bursting,
mortgage crisis... Each person has their own set of opportunities that are
influenced by both personal and national economic circumstances. But it is the
personal circumstances that make the difference. More than ever, parents need
to teach their kids to be resourceful and adaptable. Competition for jobs is
more global than it has ever been. I once jokingly advised my kids to become
dentists because that was one job that could not be off-shored. Then this
whole robotics thing came along ...

What I find interesting are the opportunities for young people in 2016 that
prior generations have not seen. First and foremost is the elective jobs that
are available: Find something to sell on eBay, borrow your parent's car and
drive for Lyft or Uber, build up a stake, rent an apartment and become a
hotelier with AirBnb, or buy a car and rent it out through GetAround.com...
These are jobs that you can do if you want to do them and can serve both as a
place to start now and as a fall back if you find yourself unemployed in the
future.

I am not saying it is easy. It wasn't easy for any generation.

------
crdoconnor
Number of mentions of the increases the share of income and wealth taken by
the 0.1% / 1%: precisely zero.

Incitements to blame grandma for your economic woes in this article: many and
varied.

Or, as Jay Gould put it: "I can hire one half of the working classes to kill
the other".

------
kfk
And yet in Bulgaria you can live very well with $1000 per month. With $2000
you build enough savings in 30 years to leave well another 30 years without
working.

The thing is, the biggest issue is not lack of jobs, it's mobility. If people
could really easily move between countries, they could live much better lives.
Of course, to do that we need to have many more remote jobs (hopefully this is
coming), kill stupid cultural/political barriers (difficult), stop thinking
people should remain in a 20km radius from were they were born.

Consider that a lot of this welt they talk about is in real estate. The moment
you stop paying 50% of your income in rent, you become automatically richer
than your parents.

------
tyfon
Being born in 1980 I think this is the first time I've seen myself included in
the group millennials. I have always though of that group as those born after
1990.

My age group, at least in Norway, seems to be fully employed and own houses
etc.

~~~
dnautics
That's unsurprising. Norway and Sweden have had low headline inflation for the
past few decades. Note how the person in the article complains that her cost
of living scaled with her promotions and pay raises. Although there was a
brief bout of deflation in 2008, one of the primary mechanisms of the
generational theft is deficit spending y governments which perpetuates secular
inflation and steals from the future to pay the present.

------
twoodfin
As @ModeledBehavior pointed out on Twitter, it's potentially misleading to
compare median household income across generations when young people are
increasingly delaying marriage.

~~~
tomp
Hm... IMO, falling median household income is _the_ reason for delaying
marriage...

~~~
dagw
How so? I mean being an unmarried couple isn't cheaper than being a married
couple.

At least among everybody I know, _the_ reason for delaying marriage is that
marriage isn't seen as that important any more, especially before kids show up
in the picture.

The only argument I could see is that falling median household income is the
reason people are delaying having kids, which then makes getting married early
less important.

~~~
lmm
For people who feel the weight of particular social expectations (which I
agree they shouldn't but that's a separate discussion), weddings themselves
are expensive.

------
cmdrfred
A combination of debt, joblessness, globalisation, demographics and rising
house prices* is depressing the incomes and prospects of millions of young
people across the developed world, resulting in unprecedented inequality
between generations.

* The question is if all the other factors are true, how can the prices continue to rise?

~~~
branchless
House prices continue to rise because it's how we print money. Govts want
"growth" when this simply means printing more. So they let banks take more of
our labour for the same pile of bricks and then tell us things are improving.

Of course we can't include house prices in inflation fully because that would
short-circuit the soft default.

------
ap22213
As a parent of young kids, the future really worries me. Unless there's a new
industrial revolution in the next decade, my kids' generation is going to be
the first in a very long time that will have a worse life than their parents.

