
The Cheapest Generation (2012) - stuff
http://www.theatlantic.com/magazine/archive/2012/09/the-cheapest-generation/309060/?single_page=true
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douche
It would appear to me, as a 25 year old college grad, that I and my peers are
spending just about every dollar that we are able to make just to get by. That
doesn't give us much opportunity to make purchases that require substantial
down-payments in addition to financing, like vehicles and property.

Prices have inflated so dramatically since our parents' generation, on
virtually everything, that saving up enough money to put 10-20% down on a
major purchase, like a home, requires 5-10 years of savings. Then there is the
job market uncertainty, where one cannot be assured that it will even be
possible to remain employed in the same area more than a couple years down the
road. Under such unstable conditions, tying oneself down into a home that it
may not be possible to sell when circumstances dictate a change is a losing
proposition.

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javajosh
Yes, it was an odd article that seemed to imply that "Gen Y" doesn't _want_
new cars, rather than they simply can't afford the luxury of a new car.

The funny thing is that this is a tragedy for car makers; but for the rest of
us, even Gen Y, is it really all that bad? Isn't this just a natural way of
reducing consumerism, and reducing impact on the planet? What if this article
was lamenting a drop in fast food consumption by Gen Y, would that be tragic
to anyone other than fast food companies?

~~~
akavi
> "Gen Y" doesn't want new cars, rather [...] they simply can't afford the
> luxury of a new car.

The bay area certainly is filled with plenty of 20-somethings who can afford
the luxury, and yet people still don't seem to want it. Among people I know, I
can think of multiple couples with income in the quarter million a year range
who share a 5+ year old beater as their only car, if they have a car at all.

~~~
WalterBright
5 years is hardly a beater! My daily driver is a 1989 Ford. A 2009 would be a
'new' car to me.

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bronbron
Isn't this just eerily reminiscent of what happened with depression babies?

Widespread, extended, negative macroeconomic event happens. Those experiencing
these events at crucial development points in their lives (childhood, early
adulthood) adjust their livelihoods to compensate. Even when the negative
effects disappear, behavioral patterns have been set in stone.

Sure, there are obvious differences, e.g. we sometimes still fritter away our
money on electronics we probably don't really need. Still, I think the
similarities are pretty striking. We're a lot more like our grandparents than
our parents.

As for the article, I think the car/housing situation is probably a really
simple one to explain: millenials know first-hand how crippling debt can be
(in the form of student loan debt). Even those lucky enough to escape that can
see how awful it's been for our cohort.

Most of us are insanely debt-averse now (wasn't there just an article
published recently that people under 40 are the most likely to have their
mortgage paid off in full?), and cars and homes are the two items you might
typically accrue debt for.

~~~
hga
Bingo. My parents are from the Silent Generation, early enough to experience
the Great Depression and WWII from the home front. And they're rather miserly
with money.

This could be related to the observation that people who enter the workforce
during a recession end up earning quite a bit less than those who don't.

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ArkyBeagle
Here's the critical point: "Since World War II, new cars and suburban houses
have powered the economy and propelled recoveries."

Emphasis _suburban_ houses, not a loft in a building built in the 19th century
in a formerly downtown industrial space.

This because new cars and new houses are a lot about debt money creation. In
every recession since 1980, these have mostly led recoveries.

Without debt money creation, we'll likely see more slack. Or something -
capacity utilization is actually up.

From the banking-industrial-advertising complex's view ( roughly congruent
with the mores of the Silent Generation ), this _IS_ cheapness. My parents
were Silent Generation and were extremely cheap by those standards. But at
that time, the stock of both existing cars and housing was well under demand.

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GFK_of_xmaspast
Maybe the answer to why kids aren't spending money is (a) student loans and
(b) there are no freaking jobs anymore.

~~~
gress
That, plus perhaps they can see that most of the things one can spend money on
do nothing to increase happiness.

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morgante
I don't know what this has to do with being cheap: my generation just doesn't
care about the same exact purchases that previous generations did.

It seems like this entire article could be explained through increased
urbanization. As more Millenials choose to move into (and stay in) cities, one
would 100% expect:

* Decreased car ownership (public transport is definitely preferable in an urban environment)

* Decrease home ownership (you're probably living in an apartment)

* Increased communal living (space is more expensive in a city)

None of this has to be attributed to some inherent "cheapness." I myself am
choosing to live in NYC and don't plan to buy either a car or a house anytime
soon, but that doesn't make me "cheap" (my Christmas spending would definitely
beg to differ).

~~~
walshemj
And basing an article on one anecdote about trying to bring a hot hatch to the
USA a market where that type of car doesn't work whereas in the uk its
massively popular is not actually very useful.

Hot sports cars are cheaper in the usa have you seen how cheap the Mustangs
are I mean the full fat v8 ones people who want the equivalent to a GTI in the
USA just buy different types of cars.

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ajaimk
Gen Y isn't cheap. They just don't want to own a car or a house cause they
think of better uses for their money.

~~~
vitaflo
Namely paying off their ridiculously expensive student loans. When you have
more debt starting out than any generation before you and have trouble finding
work, is it any wonder they don't want to also buy big ticket items?

~~~
kaybe
In Europe, most don't have the student loans and still don't want cars. But
then, the public transport system has better coverage I guess. It's ridiculous
to spend that amount of money on something you want only once or twice a month
and then also don't really need it. (Things can change when people have kids.)

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vinceguidry
I bought a new car. There are two reasons why, if either of them weren't
there, I'd have stuck with my old truck. First, I finally found a firm
financial footing. I've a job I'm not worried about losing and no desire
anymore to jump into Startups-ville.

Second is the 2014 Mazda3. I just don't like any of the other cars, they've
all just got really boring styling. I can't see what the value proposition
between buying say, a Ford Focus vs. a Hyundai Elantra. If I'm going to spend
$X0,000 on something that fills a need I can fill with $X,000, it better offer
a lot of added value, and I just wasn't seeing it. The 2014 Mazda3 just looks
fantastic and is a lot of fun to drive. I feel good getting into it. People
compliment me all the time on it. It's not a Tesla, but I can't afford a
Tesla.

When I bought my car, I saved up for 6 months and had the car I wanted picked
out before I ever walked in. I'm having a hard time seeing anyone that's in
the position to buy a big ticket item coming out from a recession doing it any
other way. You have to make something they want to buy and compete for a much
smaller pool of buyers, because they can just as easily get by without. Most
companies just don't get it, they sell undifferentiated pap.

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mikhailt
Wow, while the article mentioned it a few times, they don't seem to actually
find the pattern that would come up with a better title.

Gen-Y isn't a cheap generation, they simply have less money to spend or can
afford anything. That's not cheap, that's being realistic. However at the same
time, they are spending things on a luxurious items such as cell phones, not
to mention the high cell bills, and so on. These are the things that are more
useful to them than a car if they live in an area where public transportation
is available and/or they can work remotely/walk to work.

I am not cheap but I am not getting paid enough to be able to afford car
payments, health insurance, mortgage, loans, etc etc all at once. Even health
insurance itself can be more expensive than a car payment and insurance is
more important to me than a car. Give me free insurance, I'll be gladly to use
a car instead.

I want a car, I want a nice house, and I want all of these things that is
usually combined into "the American dream" but I'm realistic to know that I
don't want to spend the rest of my life and my children's lives paying these
things off.

Previous generations can afford to pay these things off by mid-life and pass
it on to their children after they pass without causing a burden. We can't
anymore.

Why in hell would I want to pay 10-15K a year for an apartment rent and get
nothing of value in the end when I can get a nice house? Simply because I
cannot afford the down-payment and the high rates and I don't have enough
credit. I'm still building it up slowly.

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rokhayakebe
In America a vehicle is a way to display status. If you drive a "shitty" car,
it is mostly likely because that is all you can afford.

I spent some time in Europe, and it seems they just do not see cars the same
way (in general). Nobody is judged by the ugly car they drive.

In America, good luck showing up on your first date as a an adult in a 1997
Ford Escort. In Europe, at least in France, it just did not seem to be
something they cared for.

~~~
HeyLaughingBoy
Is that really your experience? I've actually known people who did exactly the
opposite. e.g., a software developer who drove a crappy looking (but running
perfectly) 15 year old Chevy pickup because he wanted to avoid women who only
cared about how much money he had.

The average age of an American car on the roads today is up to 11 years old.
People are driving older vehicles in large part because their reliability is
far improved over the ones 25 years ago.

~~~
rokhayakebe
I think your second sentence supports my opinion.

As far as my experience it has been mixed, but I just know people care for
this stuff here.

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WalterBright
Part of the problem may be that new cars are simply boring. When I travel and
rent a car, I sometimes cannot even remember what it looked like, and have to
search the parking lot. Different brands all look alike to me. Most are simply
ugly, and my mind just tunes them out.

Unsurprisingly, given my age, I like the looks of cars made in the 60's. Those
had style, looks, and exciting performance.

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GFK_of_xmaspast
"But we know if they have the opportunity to drive Ford, they’re more likely
to choose Ford if they buy a car.”

Personally every single Ford I've driven in the last 5 years (at least 4
different models, all rentals) has convinced me never ever ever to buy a Ford.

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hawkice
The impulse is to only speak up when you contradict the story, so here's my
evidence: I'm 21, I've been a salaried software engineer since I was 17, I
have never owned a car and barely know how to drive (even though I spent two
years in Los Angeles). I don't spend all the money I make, but I do spend
quite a lot on things I _do_ value. I'm not sure if I am a trend, but I also
don't see how that would change any of my decisions, so I guess I don't care?

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stank345
I wonder how this trend relates to where people live. It seems like not owning
a car is only possible if you live in an urban environment. We make it work
thanks to good public transportation and ZipCar.

Perhaps people still own cars, but only one to a couple instead of two?

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nickhalfasleep
I wonder if housing will follow food into mobile trucks when the real estate
gets more and more unreal. It seems like an RV with decent internet, a place
to sleep and cook, is about all anybody needs until they decide to settle
down?

~~~
derekp7
That doesn't work in northern climates though. What would be great is if there
existed RV parks with a large warehouse on site that you can move your
trailers into for winter usage.

~~~
kaybe
You can fit trailers for winter usage if you add better insulation for full-
time living. The tiny housing community has a lot of info about this.
Basically, people build their own small houses on trailers and choose a spot
to live. The difference to RVs is the appearance (it actually looks like a
house), and that they are fit also for winter climates. (Start here for
example: [http://thetinylife.com/](http://thetinylife.com/)) You can move
them, but people don't do it a lot. It seems to be quite cheap and fun to make
them.

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sosuke
I keep wondering, do these trends apply even to places without walkability or
public transportation?

~~~
coldtea
Whether Gen Y avoids those places as much as it can, because of those trends,
would be another question.

