
Fed Says Millennials Are Just Like Their Parents, Only Poorer - jimmybot
https://www.bloomberg.com/news/articles/2018-11-29/fed-says-millennials-are-just-like-their-parents-only-poorer
======
iagooar
It's funny how this "generation" thing only quite exists (as far as I know) in
the English-speaking world. There is no such idea of generations of people
where I come from. It's hard for me to even grasp the idea of it. Who draws a
line between generations and why? People do not stop being born, nor do they
magically change because they supposedly belong to an imaginary generation.

Am I missing something?

~~~
klodolph
> It's hard for me to even grasp the idea of it.

It's just an arbitrary label for people born in a certain period of history.
These people generally have shared experiences that are different from the
experiences of other generations.

> Who draws a line between generations and why?

Same people that draw a line between lemons and limes. It's sometimes a useful
distinction so people remember it and use it.

> People do not stop being born, nor do they magically change because they
> supposedly belong to an imaginary generation.

There is no sharp dividing line between lemons and limes, either. Fruits in
the citrus family can be crossbred with each other and you will end up with
hybrids that cannot easily be classified as lemons or limes. There's no sharp
line between "tall" and "short", or "white" and "gray". That's just the way
names generally work, outside of fields like mathematics where you can use
more precise definitions.

~~~
curo
The world runs in cycles. You start to see various shifts when you zoom out
historically. Conservative / liberal oscillations for instance:

The Age of Enlightenment prized composure and disparaged human emotion. The
Romantics countered, to hell with composure! As William Blake wrote, "those
who restrain desire do so because there's is weak enough to restrain." A life
of love needed no guiding hand. Lord Byron wrote, "love will find a way
through paths where wolves fear to prey."

Three generations later the pendulum swung back. The Dark Romantics
underscored human fallibility. The Realists derided Romantic values and urged
a return to everyday concerns and simplicity. Victorian culture prized moral
strictness and Charles Darwin wrote, “the highest possible stage in moral
culture is when we recognize that we ought to control our thoughts.”

Then the pendulum swung again, culminating with the Roaring 20s, the rise of
Flappers, drinking, spending, and (relative to the time prior) lots of sex.
Americans valued optimism and prosperity.

That was until the Depression hit and war pulled us back to stricter social
norms. Those too were repealed and replaced by 1970s "counter-culture," "if it
feels good do it." That lasted till now, and many are suspecting that Gen Z is
a reaction to Millenials. They've accepted the progress we've made but also
reject the mistakes we've made. I won't mention surveys right now else this
will become political, but basically every generation is a reaction to the one
prior. And sometimes reactions take 2-3 generations, but it's always a cycle.

~~~
rainonmoon
I'm curious about those surveys, if you feel you could present them in a way
that won't upset people with you. As a Millennial who teaches Gen Zers,
observing the micro-generational differences and comparing them to reported
trends (and trying to figure out what is simply a difference of age) is always
interesting to me.

~~~
curo
The Wikipedia article on Gen Z has some interesting info:
[https://en.wikipedia.org/wiki/Generation_Z#Characteristics](https://en.wikipedia.org/wiki/Generation_Z#Characteristics)

One big trend is a massive shift towards saving and financial responsibility,
more risk-averse, less willing to take on debt. Far less substance abuse
(2013, 66% of teenagers (older members of Generation Z) had tried alcohol,
down from 82% in 1991). 40% drop in teen pregnancy, a 38% drop in drug and
alcohol abuse, and a 28% drop in dropout rates.

Re: church attendance, 41% among Generation Z, compared to 18 percent for
Millennials at the same ages, 21 percent of Generation X, and 26 percent of
Baby Boomers

Whereas Millennials were largely just magnifications of earlier trends in Gen
X and Baby Boomers, Gen Z seems to be a rebuttal. It's too complex to make
bets, but if I had to make a bet, I imagine 2-3 generations of risk aversion /
conservative values before those become overbearing and we have another
counter-conservative shift.

------
esotericn
I think the term "poorer", and the monetary analysis done here, is too high
level to extract real meaning.

The average young person/couple that I know are able to do and buy far more
than their parents (e.g. eat out, order takeaway, take holidays, go to bars,
buy things for hobbies, buy clothes, ...).

They just don't own property and have no path that leads there.

In some sense you could say that they have higher incomes whilst having lower
wealth, but that doesn't really capture it.

Housing just went bonkers which makes retirement impossible.

~~~
aglavine
I think that they eat out and order takeaway because they perceive that they
never going to save enough money to afford a house.

~~~
gnicholas
A friend of mine complains about the young SV crowd that decry unaffordable
real estate but also drive expensive cars. I think this is the same motivation
that you describe, but on a grander scale. In this case, they're playing the
startup lottery, and if they win it won't matter if they drove a Honda or an
Audi. And if they lose, they'll have to leave SV when it comes time to buy a
house.

I don't personally subscribe to this mentality — I've seen other friends save
up $50k, double it with patient investing, and then scrape together a down
payment. Even if you end up leaving SV, having had property here can be a good
investment.

------
Waterluvian
This is a very complex subject and I'm not trying to reduce it to something
simple. But a big smell to me that something's just plain messed up is this
fact:

I make more money (inflation adjusted) than my parents did combined when they
bought the house I grew up in. I would have to double my salary to afford
buying/maintaining that house today.

~~~
rootusrootus
There could be lots of reasons for that, however. Since you have not provided
enough information to make speculation possible, I will mention my own to
illustrate my point:

My parents bought their house in 1970, when my dad was making about 15K. The
house was about 30K. To buy that same house today you would need to make about
150K. Inflation adjusted, my dad's income then would only be about 100K now or
maybe a little less.

But ... what changed? In 1970, we lived in a remote area, where it took close
to an hour to get there from the nearest city of any size. But about 10 years
later the freeway was built and the nearest city expanded, now the property is
still technically rural but it's 15 minutes from the city. It would be hard to
argue that the value of the property hasn't been significantly increased as a
result. Not many people wanted to live that far out in 1970; my dad's
coworkers at IBM all told him he was crazy. Today that area is very popular.

~~~
asdff
Housing prices has risen more in some areas than others for sure, but the
trend of housing rapidly outpacing wages still holds when looking at much
larger data sets.

~~~
rootusrootus
The last time this topic came up on HN, I recall someone bringing up numbers
that show that if you control for house features, in particular size, the
price actually hasn't gone up that dramatically. Average house used to be
about 1600sf houses 40 years ago, now the average is 2600+.

~~~
asdff
That just shows profit margins on builds haven't changed. It doesn't matter if
you are technically getting the same price per square foot on the house if you
can't afford the homes available on the market.

------
burlesona
From the article:

“What’s old is new again. The paper observes that some of the millennials’
parents were subject to similar baseless grumbles of "kids these days" from
their elders.”

I don’t know though. Seems like part of the nastiness of the times is the baby
boomers constantly taking jabs at millennials. Perhaps the silent generation
complained the boomers weren’t “frugal enough” but I have a hard time
believing they had such widespread disdain for their kids as the boomers do.
Anyone seen any research that quantifies that?

~~~
tssva
Baby boomers were teenagers and young adults from the late 50s through the
80s. So the birth of rock-n-roll, the protest movements of the 60s and 70s,
emergence of drug culture, the sexual revolution, disco, the crack epidemic,
and the birth of rap.

As a Gen X'er I can personally remember the mid-70s to the late 80s and the
hate spewed out at baby boomers by previous generations. I don't think the
Millennials have it any worse or better. Those who are currently going through
it always see it as the worse.

I think out of everyone my generation had it the easiest. We were teenagers
and young adults during a time of general peace and prosperity.

~~~
joncrane
Now it's our job to bring peace and prosperity to the next ones.

~~~
brokenmachine
The boomers have made it so difficult to buy a house that I chose to not have
kids so I have a chance at having some peace and prosperity myself. Sucks but
true.

------
maxxxxx
I think the big problem is that there are less stable paths now. Previous
generations had a clear path to getting a house, affordable education and
stable retirement whereas now you have to take on a lot of debt, gamble in the
stock market and have to have some level of luck to retire safely. Any major
health expense or company layoff may destroy your well laid-out plans and put
you back to zero.

I think today's life is just more stressful. With some luck you can do
incredibly well but it can also go the other way big time.

~~~
humanrebar
Arguably, Boomer style retirement based on being independently wealthy was/is
a fleeting historical oddity. Historically people died young or moved in with
family.

~~~
maxxxxx
"Boomer style retirement based on being independently wealthy was/is a
fleeting historical oddity."

It was an illusion that never really materialized for most people.

------
will_brown
Baby Boomers are directly responsible for all the debt in the country, they
invented it to pay for their lavish life styles they couldn’t afford and so
they invented debt to kick the can down the road to future generations, and
payment has come due. 1950 federal debt was ~$250B now $21T. Credit cards
didn’t exist before baby boomers now $19T in consumer debt. Student loans
didn’t exist before the boomers, now it’s more than $1T debt.
Medicare/Medicaid didn’t exist before the boomer generation, now that’s >$50T
in unfounded debt by all estimates.

What a revelation.

As it turns out all this bullshit about millennials not wanting to get
married, or own houses, or own a car is manufactured news...and people really
do want to have families and own things, only they can’t afford any of those
things.

Wow next thing we will hear is millennials are not choosing to be uninsured,
but they can’t afford healthcare insurance.

Edit: removed “Medicare/social security” with Medicare/Medicaid...that slip
triggered the HN pedantics and in their mind made the remainder of the comment
“patently false”

~~~
toomuchtodo
I agree with most of this except the part about inventing debt; come on now,
debt has existed as a concept far back into human history.

EDIT: Yes all, I understand credit is now more easily available than ever, and
I would argue that ease of credit is a substantial problem allowing for the
transfer of responsibility to future generations.

@infogulch: I agree with everything you said, but that is not what OP said,
and hence, not what I replied to. Internet Talking is hard!

~~~
marviel
Last evening while we were out to beers, a friend recommended me a book
apparently reviewing precisely this history: [https://www.amazon.com/Debt-
First-5-000-Years/dp/1612191290](https://www.amazon.com/Debt-
First-5-000-Years/dp/1612191290)

~~~
toomuchtodo
Yes, this was the book I was thinking of when I wrote my comment. Do read it,
it's fantastic.

------
acconrad
It's painful to see that younger people are worse off - poorer and life
expectancy I see is down again. I thought we were trying to give our children
a _better_ life? How did we become so narcissistic that we don't even want to
make future generations better off?

~~~
lotsofpulp
Everyone is trying to give their children a better life, not everyone else's
children a better life.

~~~
humanrebar
Propping up housing prices and NIMBYism isn't trying to give your offspring a
better life.

I guess by some math they would leave the house to the kids, but that will be
when the Boomers are ideally 80 and their kids are already grandparents.
Assuming the wealth isn't spent on end of life care (it will be).

~~~
lotsofpulp
A lot of people seem to think that withholding vaccines and using low fuel
efficiency SUVs to transport their kids is giving them a better life, I don't
have much hope of them considering broader economic outcomes. But they will
sacrifice others' outcome (not to their face though) if they think it will
further theirs even a little bit.

------
simias
I always find it a bit strange when people pit generations against one
another. It's common to find articles complaining about millennial, I also
often see young people online complaining about how "baby boomers ruined
everything".

I mean, do we seriously believe that if we magically swapped these generations
around things would've gone massively differently? I know that Americans put
the individual first and foremost but I have absolutely no doubt that the
current generation would have done mostly exactly the same mistakes if we had
been born a few decades earlier. And similarly I'm pretty sure that my
grandmother would be wasting her time on Instagram or playing Fortnite if she
was born today. Does anybody really believe otherwise?

It's such a ridiculous thing to do. It's not like you can chose when you're
born. It's just a way to deflect your own problems onto other people while at
the same time not proposing anything constructive to move forward.

~~~
CyberDildonics
Thinking that entire generations of people are really different at their core
is fallacious, but looking at their behaviors and indications of differences
in the system they operate inside seems valid to me.

------
Multicomp
While the article itself is talking specifically about spending habits on
physical goods vs 'experiences', the subject line could be better worded.

IMHO Millenials tend to be more aware of their financial weakness at a younger
age relative to their older cohorts, thus resulting in more risk adverse
behavior.

------
vinceguidry
> As a caveat, spending on avocado toast wasn’t specifically tracked for this
> analysis.

We need an Avocado Toast Index to track consumption patterns across
generations to go along with the Big Mac Index that tracks purchase parity
across countries.

------
nkg
But isn't the fact that they are just like their parents _exactly_ the problem
? The GDP of the United States has more than doubled since the 80's, so how is
it that millenials are as "poor" as their parents ?

~~~
asdff
People aren't paid according to the GDP of the United States.

~~~
nkg
The GDP was just an indicator to highlight the fact that the country got
richer, but the relative wealth of the people did not grow at the same pace.

------
couldbewrong113
"Housing and food are two areas where millennials have spent less than
previous generations." Spending less on food I would believe; we have
tremendous abundance and it's inexpensive relative to everything else.
Housing, though? That...doesn't seem correct, unless they're including in the
calculation millennials who live with their family and pay nothing for
housing. Can anyone point to a reference that backs up the claim that
millennials are paying less for housing than the prior generation?

~~~
esotericn
Guesswork here, but it might be possible due to a selection effect.

If you can obtain a mortgage, you are more likely to (be willing to) spend
more on that mortgage than you would on the rent for a number of reasons.

Anecdotally, I see people attempting to spend as little as possible on
flatshares because they don't think they'll ever have a high enough income to
bother with that, so they don't save either, and just enjoy themselves with
the money left over (spending as little time at home as possible).

------
ikeyany
That's not true--millennials are also far more depressed.

------
chrisco255
I wonder how much of this is permanent and how much of this is related to the
fact that millennials came of age in the worst recession since the Great
Depression? Maybe millennials will bounce back over the next 10 years, as
boomers retire and assuming the economy doesn't suffer another catastrophe.

------
enraged_camel
It's good to see a study that quantifies what we have suspected for a while
now: millennials aren't doing as well as their parents were at any given age.
This is why certain "life thresholds" such as getting married or buying a
house are delayed, sometimes significantly.

The annoying thing is that this is typically blamed on imaginary negative
traits that millennials possess, such as laziness or spite borne out of
feelings of entitlement. Whereas the fact is that Boomers had it really,
really good, having grown up during an age of unprecedented growth, especially
in contrast to the rest of the developed world, which was recovering from
World War 2. That's the main reason they have done so well economically:
America's rising tide has lifted all their boats. Unfortunately, this has come
at the expense of subsequent generations, who now have to live with, and pay,
their debt.

~~~
twoodfin
Or on average they stayed in school longer than their parents, which tends to
delay everything, including high earnings years.

~~~
enraged_camel
Maybe, but it's worth noting that college is _tremendously_ more expensive
today than it was back when Boomers were attending it. We're talking an order
of magnitude or more.

edit: not multiple orders of magnitude

~~~
beaconstudios
also, more people are attending college. College didn't used to be something
everyone went to. With the proliferation of student loans, universities have
no reason to keep fees down.

~~~
asdff
Living wage jobs are much harder to secure without a college degree, full
stop. I read a headline today that in the Inland Empire, 50% of jobs do not
pay a living wage.

------
refurb
Is it just me or does the article provide zero evidence that Millennials are
poorer? The graph is just spending, not income.

~~~
quaunaut
They reference this paper:
[https://www.federalreserve.gov/econres/feds/files/2018080pap...](https://www.federalreserve.gov/econres/feds/files/2018080pap.pdf)

------
Moodles
Compulsory xkdc on the concept of jouvenoya:
[https://xkcd.com/1227/](https://xkcd.com/1227/)

------
madeuptempacct
Average expenditure at 30: $45,000

That's strange to me - is everyone living on debt? Factor in median household
income for a fam with Bachelors degrees: $68,728 _, which is $52,000ish net of
tax.

How are people spending that much?

_[https://en.wikipedia.org/wiki/Household_income_in_the_United...](https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Education_and_gender)

~~~
nyghtly
"Millennials spend huge amounts on rent, using up 45% of income made by age
30"

[https://www.usatoday.com/story/money/personalfinance/real-
es...](https://www.usatoday.com/story/money/personalfinance/real-
estate/2018/05/18/millennials-spend-large-percentage-income-rent/609061002/)

~~~
refurb
_" GenX adults spent only 41% of their income on rent by age 30"_

Doesn't seem out of line with the previous generation?

------
matte_black
Will the generation that comes after millennials be _even poorer_?

~~~
xemdetia
I feel like that is a given based on what I have been seeing right now. If
people are already redlining spending/debt without savings any financial leg
up that they can provide their children is that much less. If anything I am
anticipating a decline in people pursuing college as those children who see
lives defined by student debt as just not worth it, but the current jobs
market does not have a ton of high paying positions for high school educated
workers. In a sense because I have education and specialist skills I feel like
I am part of the group pulling up the ladder behind me when it comes to
knowledge work.

If the next generation is even net poorer the property asset appreciation
train might finally crash though, and I'm of mixed opinion if that is going to
have a net good outcome, or if the front is going to fall off two generations
from now.

------
LiterallyDoge
Millenials are killing everything. Except the economy. Boomers killed that.

~~~
philodough
Boomers made the economy grow incredibly and had some busts along the way.
They got up and kept going. The boomers are the most creative and productive
American generation period.

Millenials are still living with their (wealthy) boomer parents, delaying
marriage and waiting for their boomer parents to die, whereupon the millenials
will inherit their boomer parents' wealth. Unfortunately this will fail, b/c
millenials have neither a work ethic nor a saving ethic. In the end, they'll
spend their parents money and the US economy will flat-line.

~~~
fetus8
It's a real shame that boomers weren't creative or intelligent enough to
prevent issues related to automobiles and climate change. It's also a shame
they didn't come up with a decent fix for Social Security that will only
benefit their generation and no one after.

------
elocinstr8t
Sorry but I kinda disagree. I'm a Millennial with Baby Boomer parents and I'm
definitely not poorer than them. No, I wasn't born rich, but I'm definitely
earning more than my parents. Okay, maybe not as much as my Mom but this
article is such BS. It all just depends from person to person you know. I hate
it when generations always crap on millennials like we're the worse thing
that's happened in the world. Have you met the teenagers? The young
millennials? No? Well there you have it.

~~~
cableshaft
If you're doing anything related to software for a living and live in the US,
you're not representative of the average American.

I'm not making anywhere near as much as I could be in software development
right now and yet I'm making significantly more than the average household
income in the US, just by myself (not including my girlfriend that lives and
shares bills with me).

Also it's all relative. The types of jobs my parents worked were both middle-
lower class jobs and we struggled at times to make ends meet. I ended up in
one of the higher paying fields out there, so it makes sense that I make more
than they did.

Comparatively, a good friend of mine's dad is a lawyer, but my friend is a
teacher in the Pacific Islands (he studied for and tried being a lawyer for
awhile, but his wanderlust got the better of him). He's making significantly
less than his family did.

