
When I Was Your Age - aburan28
https://www.americanprogress.org/issues/economy/report/2016/03/03/131627/when-i-was-your-age/
======
huherto
Paraphrasing the classics. It is the housing market stupid.

Really, Even living in a place with very low population density(Rural
Mass/NH). Rents are high (and scarce), you need at least 250K to buy a small
house. Houses are old, Lot's are big, big distances, very few new houses are
built every year. I can't even image how blue collar families do it. If you
think about it, it even makes local companies less competitive, since they
need to pay more so people can barely survive.

This resonated a lot with me. [https://medium.com/the-ferenstein-
wire/a-26-year-old-mit-gra...](https://medium.com/the-ferenstein-
wire/a-26-year-old-mit-graduate-is-turning-heads-over-his-theory-that-income-
inequality-is-actually-2a3b423e0c#.iljcrro5m)

~~~
maxerickson
Our keystone national housing policy focuses on appreciating prices.

A sensible national housing policy would focus on improving the
characteristics of the housing stock (improving energy efficiency, removing
lead, etc). Of course the building code moves forward over time and new
housing generally beats older housing on metrics like that, and there are
occasionally tax incentives for making improvements. but none of that comes
close to the mortgage interest deduction in scope.

It would also focus on affordability. It's clear enough that with 40 or 50
years for the policy to work and ~1/2 of the nation not having much of any
wealth that home equity is not the path to universal prosperity.

~~~
Futurebot
This is one of the reasons that Germany housing policy is so successful:
[http://www.forbes.com/forbes/welcome/#1ef0063ebb2d](http://www.forbes.com/forbes/welcome/#1ef0063ebb2d)

In the US, housing is treated as an _asset_ , which is a huge mistake. In
place like Germany, most people are renters because: rents stay fairly low,
the government reassesses population periodically to allow more houses to get
built, and renters have plenty of rights. Here, we allow houses to act as a
hybrid place to live, ATM, and stock.

~~~
Terr_
Living in your investment is a bit like having your 401K funds invested in
your employer: If something goes wrong, you're doubly-screwed.

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gragas
>Millennials have spent almost their entire working lives in a labor market
that is loose—with too many job seekers and too few jobs—and where private-
sector labor unions are almost entirely absent. Certainly, monetary policy
that promotes employment while making it easier for workers to form unions
would help Millennials make up lost ground.

The issue I have with this is it promotes a certain ideology—that job-seekers
have the right to hold jobs even when there are too few. This article
completely ignores the other paradigm, that if you don't have a job, it's up
to you to make yourself valuable to employers.

I'm not trying to argue for one ideology or the other, I just think it's
absurd to ignore the existence of one or the other.

~~~
dev1n
_...that if you don 't have a job, it's up to you to make yourself valuable to
employers._

Most people do not have the opportunity to make themselves valuable.

It's generally understood that at this point in history most people shouldn't
really have to work at all. The whole point of technology is to make living
easier for everyone. The root of this problem, as far as I can understand it,
is misallocation of capital, not of "jobs". The efficiency of the free market
is telling the labor market, "hey, you don't need to do this job anymore." So
why are we still forcing these people to work? They should be allocated the
capital gains reaped from market efficiencies that are a result of
technological innovations.

~~~
ewzimm
The basic problem is that this idea that people shouldn't have to work goes
against centuries of religious thinking which is strongly embedded in American
culture. The idea of the Protestant/Puritan work ethic is that hard work is a
sign of God's grace and centrally important to the character of a person and
society as a whole. Sometimes you will hear people talk about this directly,
but more often it's just implied because it has become awkward to assert
religious ideas on society explicitly.

Until that cultural pillar of hard work defining a person's character and
place in God's kingdom goes away, we will be stuck with this idea that people
are defined by their work.

~~~
base698
So think about this another way...

What gives you more self-worth, learning a new programming language and
completing a project in it, or sitting on the couch and watching TV?

I personally believe the ancients understood this, from the usual parables.
Idle hands are of the devil, and lead you to fill your time with something.
Most of the easy somethings are drinking, eating and junk entertainment.

Technology may give us less to do, but at the expense of less opportunities
for developing self worth. Even some of the founding computer members
understood this--Wiener, a member of the "Dream Machine" crew mentioned it in
the book "Cybernetics".

Perhaps I may clarify the historical background of the present situation if I
say that the first industrial revolution, the revolution of the “dark satanic
mills,” was the devaluation of the human arm by the competition of machinery.
. . . The modern industrial revolution [i.e., the computer revolution] is
similarly bound to devalue the human brain. . . . The answer, of course, is to
have a society based on human values other than buying and selling. To arrive
at this society, we need a good deal of planning and a good deal of struggle.
. . . (Wiener, 1948, pp. 37-38, bracketed words added)

~~~
mfoy_
Well, you're comparing "learning a new programming language and completing a
project in it" with "sitting on the couch and watching TV". There are things
you can do instead of "working" that isn't being a couch potato.

For example, learning how to play an instrument, picking up painting,
attempting to master chess, or Go, are all things that you could do instead of
working and are still personally enriching, if not financially enriching. They
may not boost the economy directly but they will make the culture a better
place nonetheless. There is a lot of untapped potential that could be explored
if people have a guaranteed basic income and didn't _have_ to work that dead-
end, minimum-wage job.

Of course we still need a lot of human labour to make society run. I mean who
_wants_ to do menial labour, or plough snow at 4am so the morning commute
isn't a complete disaster.

So I don't have an answer, I just think you're falsely equating "not working"
with "idle hands".

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11thEarlOfMar
I'd be interested in seeing the change in wage distribution by profession. In
the 70's it was still possible to exit high school and move into manufacturing
jobs that paid 2-4x minimum wage. Those jobs are largely gone now, and the
opportunities for 30-year-olds with high school only are more often (I
speculate) Walmart or Starbucks or Chipotle type jobs. There is a higher
percentage of college educated that may balance that out, but we need to see
the distribution to understand it.

~~~
willholloway
People I know that skipped college and began working and saving right after
high school (all as waiters), were able to purchase a home, or a two-family,
or three units for investment purposes with the rock bottom
prices/foreclosures during the housing crisis.

They have been able to accumulate some wealth on service industry salaries.

They don't make much less than many of their counterparts with liberal arts
degrees, who without the head start graduated into the recession with nothing.

For many the opportunity cost of college was high.

~~~
dionidium
I dated a bartender for a few years and one of my best friends waits tables,
so I've ended up meeting a fair number of industry people. I have no idea what
you're talking about. They're almost all renters. And this is in St. Louis,
where housing is cheap. (Also, I'm in my thirties. Not talking about people
just starting out.)

~~~
willholloway
What's cheap?

My cousin bought his first foreclosure for 33k during the south Florida
housing bust. He has two more now, all from waiting tables and being extremely
thirfty.

A 140k two family amortized over 30 years at 3.5% can be free to live in for
the owner occupying one unit. That can be done in Connecticut for example.

This is how some of my non colege educated millenial friends are getting by
quite well.

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pc86
It's no surprise that the Center For American Progress pins the blame for this
on lack of labor participation among Millennials, but I don't buy it. We're
talking about a sub-2% drop compared to Gen X.

~~~
cmdrfred
You forgot to adjust for inflation. 2% drop on money that is worth 6% less or
so.

~~~
pc86
I was referring to unionized labor participation between Gen X (30 in 2004)
and Millennial (30 in 2014) as defined by the article, meaning that its
overall effect on Millennial income is negligible enough to approach zero.

Not sure that inflation in relevant to that.

~~~
mikeyouse
Small absolute differences but that's still a ~22% decrease in union
membership at the same age.. It could definitely affect wages, and certainly
does for those in formerly union jobs.

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two2two
Another issue worth noting is getting past the set requirements to be
evaluated by a human. I'm 30, without a college education, and worked for
Apple retail as a 'Genius' for 5 years. That meant enough at the time to get
me a job at Hulu with the expectation of upward mobility. Unfortunately,
Hulu's executives made poor decisions and the type of work I was doing was
unbearable. After leaving, I've been unable to find a job due to my
application submissions missing a key component to even be considered; a
college degree. Now, no one cares I worked for Apple like they used to.

~~~
ajmurmann
The whole college degree as a filter thing is the laziest thing a company
could do to quickly get through a stack of applications. On the other hand the
market is apparently in their favor enough that they can afford to use lazy
filters like these that might lead to missing out on an awesome employee.

~~~
michaelbuddy
There really needs to be a way to get honorary degrees of some sort where
you've put in the work. College degrees are something focused to complete,
which shows initiative, but in terms of classes and skills they are so
unfocused i'd rather see somebody so focused within a niche with no degree
because they knew college would hurt their ambition.

~~~
nradov
Honorary degrees are usually granted to people who have achieved something
particularly noteworthy in the field, or who make large donations to the
school. I think what you're actually asking for is academic credit for work
experience. And indeed some of the lower-tier online colleges such as
University of Phoenix or Kaplan University do offer that option. So if you
just want to check the box of having a Bachelor's degree then that might be an
option, but be aware that many employers don't take such degrees seriously.

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snake_plissken
Huh? That chart in figure 3 tells it all; on the assumption that an employer
in the 80s valued a college degree as much as a company in the 2010s, then as
more people attain a college degree, it's value (i.e wages) won't move up. In
fact you'd expect it to go down but that increase in "productivity" probably
offset the downward pressure.

If you asked me, the problem facing workers in their 20s and 30s is that
people are having longer careers, either by choice or by necessity. This is
coupled with a job market which has never really recovered from the mid 2000s
peaks. Until the Baby Boomer generation really begins to retire, the job
market will remain tricky to navigate. Compound it all with an ever increasing
cost of living (basically, the cost of housing) in pretty much every market
and you get the bleak landscape we have now.

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mattlutze
They state the causes of lower Millennial average pay is an incomplete
recovery causing lower participation in the labor market, and lack of unions
to force higher wages.

They then go on to say that the Fed should continue depressing interest rates,
and that employers should start providing significant parenthood benefits.

I'm not sure with the last two -- continuing to depress capital for businesses
and increasing the costs of an employee -- will encourage greater hiring or
higher wages.

If it's not profitable to make loans, banks won't provide the capital many
businesses need to grow their staff since profits instead have to be more
conservatively retained to protect against cash flow fluctuations.

I thought that recent economic research was demonstrating that, when
controlled for position and employment type, male and female salaries weren't
significantly different. I'm not sure this one makes complete sense as a
solution to the problem of employers not hiring people, but I'd definitely be
interested to see more analysis on the hypothesis that greater gap coverage
for maternity leave could help keep women on track and such, that's
particularly cool.

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jcuga
Graduates are increasingly less prepared for the working world and burdened
with large student loans. It should come as no surprise that higher levels of
education have not improved Millennials' standing.

There are more distractions and diversions than ever that prevent youth from
otherwise doing something constructive with their time. And universities have
been dumbing down curriculum to bring in more (less qualified) students that
are buoyed up by federal loans.

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galfarragem
My empiric opinion is that it's very common among millennials to 'follow their
passion'. 'Weakness' that is exploited by business people when negotiating
salaries. Mix it with post-scarcity economics and globalization and the
phenomenon is explained.

~~~
ZanyProgrammer
Most don't love what they do-they want the world their parents promised would
be theirs by going to college.

~~~
galfarragem
I agree. Older generations made emotional promises that made sense in that
moment of History - 'graduate from a good college and the world is yours' \-
forgetting that there are ever changing dynamics that easily refute that
judgement: e.g. supply and demand. You don't earn a good sallary because you
_know a lot_ , you earn a good sallary because the skills that you are able to
market have a favorable demand/supply ratio that inflationate their value.

~~~
ZanyProgrammer
Moreover, it was promised (because when people graduated from college in 1973
it made sense) that any college degree was your white collar meal ticket. I
still think people who advocate undergrad liberal arts/humanities are
delusional or have a vested interest (like they themselves have non STEM
degrees)

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lr4444lr
"By all rights, Millennials—people born between 1981 and 1997—should be the
highest-paid generation in American history. They are, after all, the most
likely to hold a college degree and are working in a period of unsurpassed
productivity"

This syllogism is not only unfounded, but basic economics suggests the
opposite is true.

~~~
CPLX
I have a degree in Economics, and I don't understand what you're trying to
say.

There should be a positive correlation between productivity and compensation.
How does "basic economics" suggest the _opposite_?

~~~
maze-le
I think what he means is: More people hava a college degree. That means more
people are in competition to get "white collar" jobs. More competition on the
"white collar"-job market, creates incentives to lower the cost per person
(There is a bigger share of people willing to be paid less than a generation
before). Therefore the average salary per person drops.

~~~
guscost
Also, "more productive" means fewer people are needed to do the same amount of
work, so labor prices are being pushed down from the demand side too (as long
as the total work being done doesn't keep pace, i.e. low growth).

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gozur88
>By all rights, Millennials—people born between 1981 and 1997—should be the
highest-paid generation in American history. They are, after all, the most
likely to hold a college degree and are working in a period of unsurpassed
productivity.

"By rights"? This article goes off the rails right there in the first
sentence. It's hard to know where to start with how wrong this is.

If the demand for your skill doesn't change and twice as many people have it,
in aggregate the people with that skill are going to make _less_ money. The
idea that we're going to educate ourselves into prosperity as a society is
daft - if we could all do brain surgery it would be a minimum wage job.

The over-schooling of the millennials is a massive misallocation of resources,
fueled by debt, cynical college administrators, weak politicians, credulous
bureaucrats, and parents doing the wrong thing for the right reasons. That's
not the kind of thing that makes you wealthier. Quite the opposite.

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cheath
That lead photo caption is just horrible.

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taivare
Unemployment ,I graduated in 1981 , newly minted , state certified in welding
1750 cr. hrs. With a lot of hope went for a welding job in Toledo , the line
was 100 yds. long . I got up there, the guy shook his head at the guy next to
him and said this is the guy we need ; looked at me and said son look behind
you all of those guys have families to feed ! Unemployment I could tell you
all about unemployment !

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z3t4
To hire someone, you need money, and to get money, you need to get hired ...
The problem is that there is not enough money!

~~~
maxerickson
There's plenty of money.

The problem is that spending $10 on capital to make the existing work force
more productive is often a better investment than spending $10 on some more
labor. It's difficult for labor to argue its importance in such an
environment.

~~~
z3t4
Being more productive usually let you earn more too.

~~~
maxerickson
That's why I'm separating capital investment out from labor.

New equipment helps the business earn more, which of course gives them the
option to pay their employees more, but if there are lots of people willing to
be employees, they business probably doesn't need to pay more.

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jschwartzi
Is it generally accepted that lower federal reserve interest rates increase
employment? If so, what's the mechanism?

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lintiness
govt subsidies for college degrees have made them the new high school diploma.

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timsco
Boo hoo. Now get back to work! ;)

