Are Millenial and Zoomers economic pessimism justified?

[支持核绿派 (Greens4Nuclear)]

Huh, kind of on that topic:

New college graduates are overestimating their starting salaries by $30,000, report finds

I think I mis-estimated by 8k eight years back. But I'm not surprised it's gotten worse when costs are now much worse.

Somewhat related- the below video and blog post explain a lot of why younger folks are pissed about the economy right now

The McDonald's theory of why everyone thinks the economy sucks
Americans are spending as much of their paychecks as ever on fast food — and everything else.

Inflation — the price of a fixed basket of goods — increased a lot during this period: by 16 percent. But consumption increased by considerably more than that: by 25 percent. That’s right. From December 2020 through June 2023, Americans’ financial outlays increased by 25 percent. It’s not just that the fixed basket of goods was getting more expensive — they’re also putting more in their baskets.4

Now, it’s also true that consumption generally increases at a faster rate than inflation — as Americans get wealthier, they have more money to spend in real dollars. However, over the past few years, between higher prices for the same goods, clever strategies to get you to spend more, algorithmically-driven price discrimination, and pandemic-driven changes in spending habits — for instance, people who work from home are paying more for housing — Americans are really draining their batteries to zero. Here is the personal savings rate, which is now hovering at about 3 percent — about as low as it’s ever been save for a similar stretch just before the financial crisis.



I’m not sure that this is the whole story for why customer perceptions about the economy are so poor — this is a topic we’ll keep coming back to between now and the election. But I suspect it’s a lot of it. People are spending more money in real terms, a LOT more money in nominal terms, and the rate of increase is still fairly high (PCEs are up 6 percent year-over-year as of September). I’m wary of articles like the Washington Post story that frame politically inconvenient facts as “misinformation” — but this is an inconvenient set of facts for the White House.

[Sprouts Farmers Market ✘]

Somewhat related- the below video and blog post explain a lot of why younger folks are pissed about the economy right now

Yeah, I've heard a little bit about this from family members. It was news to me at the time. It is an awful practice and a terrible waste of time. I've also heard that the real entry level positions seem to have an absurd number of interviews and often hours or days worth of real work must be completed pro bono to have a chance (and even then, most companies just want the free labor with no serious attempt to hire).

I think a secondary reason is major burnout from the labor shortage. I read that fewer employees doing far more work was true in the service sector but I think this is increasingly widespread.

My team's headcount is down 15% YTD. Our overseas outsourcing is somehow down 18% YTD. yet Revenue is only down 6%, so if you look at productivity per US worker, it's up a quite a bit from all-time highs - and now they are asking us to put in even more time next quarter because we have no choice but to grow, even if we have fewer people - or else the model doesn't work.

In spite of that, pay freezes are anticipated for the next 12 months, and bonuses are completely in doubt for the second time in five years - so there will be a continued labor shortage that may be exacerbated by inadequate pay.

It seems like this is a pretty common experience though may not apply to every industry.

[ProgressiveModerate]

Somewhat related- the below video and blog post explain a lot of why younger folks are pissed about the economy right now

Yeah, I've heard a little bit about this from family members. It was news to me at the time. It is an awful practice and a terrible waste of time. I've also heard that the real entry level positions seem to have an absurd number of interviews and often hours or days worth of real work must be completed pro bono to have a chance (and even then, most companies just want the free labor with no serious attempt to hire).

I think a secondary reason is major burnout from the labor shortage. I read that fewer employees doing far more work was true in the service sector but I think this is increasingly widespread.

My team's headcount is down 15% YTD. Our overseas outsourcing is somehow down 18% YTD. yet Revenue is only down 6%, so if you look at productivity per US worker, it's up a quite a bit from all-time highs - and now they are asking us to put in even more time next quarter because we have no choice but to grow, even if we have fewer people - or else the model doesn't work.

In spite of that, pay freezes are anticipated for the next 12 months, and bonuses are completely in doubt for the second time in five years - so there will be a continued labor shortage that may be exacerbated by inadequate pay.

It seems like this is a pretty common experience though may not apply to every industry.

I remember last summer I was trying to apply for an unpaid internship at the math musuem in NYC.

Mind you this is an unpaid internship for high school students.

They basically expected us to work a normal job minimum 5 days a week. Also for the application, they wanted the applicants to write like 2 essays, get 3 letters of recommendation, and submit other relevant works in addition to an in-person interview. Part of the reason I chose to not pursue the interview is because there seemed like such an imbalance between what they wanted from me and what they were offering me.

It's not like the NYC Math Musuem is a particularly desired or well connected place. Stuff like that just feels borderline illegal.

I think we need stronger laws to cramp down on "fake" job openings and the extent to which labour can be unpaid.

The harder thing to address is the internet allowing companies to hire workers overseas instead of here. Maybe taxes depend on the share of workforce that lives within the US?

Honestly, this problem gives me the same vibes as the problems with modern dating apps. Dating apps open people to a much larger pool, and as a consequence, everyone raises their standards higher. Dating apps also make it easier to not commit and just keep trying a new person. In the end, most people on dating apps struggle to find love. With job markets, the internet and remote work has opened the pool of workers to be larger, companies have raised their standards, and it tends to be economically beneficial to job hop.

[ProgressiveModerate]

https://nypost.com/2023/11/21/business/millennials-need-525k-per-year-to-be-happy-baby-boomers-content-with-124k-poll/



This is kind of a funny chart; Millennials feel they need to earn roughly 5 times more than other generations to be considered "happy".

This is probably due to a combination of cost of living increasing, media and social media setting unrealistic expectations, media narrative of Millennials being economically behind, and entitlement.

Honestly the thing I find more shocking about this data is that Zoomers are more or less in line with everyone and Millenials are the only odd ones out.

[Vosem]

https://nypost.com/2023/11/21/business/millennials-need-525k-per-year-to-be-happy-baby-boomers-content-with-124k-poll/



This is kind of a funny chart; Millennials feel they need to earn roughly 5 times more than other generations to be considered "happy".

This is probably due to a combination of cost of living increasing, media and social media setting unrealistic expectations, media narrative of Millennials being economically behind, and entitlement.

Honestly the thing I find more shocking about this data is that Zoomers are more or less in line with everyone and Millenials are the only odd ones out.

Wow, based Millennials. Incredibly bullish sign for the future of that generation and their ability to impact the world in a positive way.

[Tintrlvr]

https://nypost.com/2023/11/21/business/millennials-need-525k-per-year-to-be-happy-baby-boomers-content-with-124k-poll/



This is kind of a funny chart; Millennials feel they need to earn roughly 5 times more than other generations to be considered "happy".

This is probably due to a combination of cost of living increasing, media and social media setting unrealistic expectations, media narrative of Millennials being economically behind, and entitlement.

Honestly the thing I find more shocking about this data is that Zoomers are more or less in line with everyone and Millenials are the only odd ones out.

The Zoomer figures have an easy explanation (that the Millennial number is just bizarrely wrong because of a statistical fluke and is being reported breathlessly without justification) and an alternative, more credulous explanation (that Zoomers are too young to have developed the same sense of what money is as Millennials because, except for the very oldest, they aren't trying to get married, have children, buy houses or move up in their careers yet).

[ProgressiveModerate]

https://nypost.com/2023/11/21/business/millennials-need-525k-per-year-to-be-happy-baby-boomers-content-with-124k-poll/



This is kind of a funny chart; Millennials feel they need to earn roughly 5 times more than other generations to be considered "happy".

This is probably due to a combination of cost of living increasing, media and social media setting unrealistic expectations, media narrative of Millennials being economically behind, and entitlement.

Honestly the thing I find more shocking about this data is that Zoomers are more or less in line with everyone and Millennials are the only odd ones out.

The Zoomer figures have an easy explanation (that the Millennial number is just bizarrely wrong because of a statistical fluke and is being reported breathlessly without justification) and an alternative, more credulous explanation (that Zoomers are too young to have developed the same sense of what money is as Millennials because, except for the very oldest, they aren't trying to get married, have children, buy houses or move up in their careers yet).

It's a pretty huge gap to be a true statistical fluke unless this was a terrible study.

I think it's largely a combination of the reasons you state. Millennials are sort of at the prime time of starting families, buying homes, and settling down which obv means they have more expenses. Additionally, I think many Millennials feel like they're permanently behind because of the 2008 reccession and so feel like they need to earn a lot to make up for lost time.

[ProgressiveModerate]

https://www.youtube.com/@TristanPaine/videos

I think stuff like this helps explain why young people tend to be so up in arms about income inequality.

In basically all these videos, the guy goes around asking people who claim to be/present as wealthy how they made their money. Most of the responses are things like "real-estate", trading watches, day trading, social media influencer, or "entrepreneur". Much of the advice people give in these interviews actively discourages people from going to college, and the way they present their stories makes it seem as if they're success sort of casually happened. Furthermore, many of the people in these videos seem to have purposefully narcissistic or infuriating personalities which I think is because that's what gets views.

These sorts of videos seem really popular on basically all forms of social media platforms young people use.

There are a few big problems with these videos:

1. A lot of these people could easily be lying about their true economic circumstances. There are so many times I see a lot of these interviews and almost laugh internally because it's clear to me the person is full on lying. Yet if one looks at the comments of these videos, whether positive or negative, it's almost all affirmative that what these people said at face value is true.

2. A lot of the "advice" these wealthy people give is just bad, such as actively discouraging people from going to college. The vast, vast majority of people who are millionaires or billionaires went to college. And the anecdotal success stories you hear about college dropouts are cases where they dropped out because they were insanely academically gifted at least in certain areas. The rest of the advice is pretty generic and bland, yet seems like so many people take it as gospel.

3. There is a severe underrepresentation of the more "traditional" ways of building wealthy, such as high-level doctors, lawyers, and people who work in actual finance fields, or people who run real businesses.

4. Almost all the wealth shown in these videos is very extroverted. It's usually someone riding in a fancy sports car or someone purchasing a luxury watch. The reality is most wealthy people while they may buy nice clothes, cars, and homes aren't that flashy.

5. Even if the person is genuine, they are 100% the exception and not the rule.

Given how I almost never see *any* pushback against the fact these videos are just terrible ways to go about interviewing, I think people take these at face value. For a young person working a hard 9-5 job and living paycheck to paycheck, I could understand how it would be frustrating to see narcissistic 16 year old boy become wealthy because of spending an hour a day dropshipping.

There really needs to be a clearer pushback on this type of content so that the fact it's not real or at least exadgerrated becomes normalized. The reality is most true wealth comes from generational wealth, and then being able to do something at a very high level.

[支持核绿派 (Greens4Nuclear)]

Somewhat related- the below video and blog post explain a lot of why younger folks are pissed about the economy right now

The McDonald's theory of why everyone thinks the economy sucks
Americans are spending as much of their paychecks as ever on fast food — and everything else.

Related post by jaichind on economic pessimism among post-1980ers in Taiwan that seems to carry over across the developed world. There seem to be similar structural forces at play regarding uneven economic growth here in the US. riverwalk3 has also commented on a tech boom where tech and finance workers are struggling less under higher inflation, although it's hard to speak of a "tech boom" post-mid 2022 in the wake of repeating layoffs in that sector.

This is sort of similar to Ireland, the Dutch disease, and other economies overreliant on tourism.  Overreliance on the tech sector to generate GDP growth leads to results like this.

[ProgressiveModerate]

Somewhat related- the below video and blog post explain a lot of why younger folks are pissed about the economy right now

The McDonald's theory of why everyone thinks the economy sucks
Americans are spending as much of their paychecks as ever on fast food — and everything else.

Related post by jaichind on economic pessimism among post-1980ers in Taiwan that seems to carry over across the developed world. There seem to be similar structural forces at play regarding uneven economic growth here in the US. riverwalk3 has also commented on a tech boom where tech and finance workers are struggling less under higher inflation, although it's hard to speak of a "tech boom" post-mid 2022 in the wake of repeating layoffs in that sector.

This is sort of similar to Ireland, the Dutch disease, and other economies overreliant on tourism.  Overreliance on the tech sector to generate GDP growth leads to results like this.

One issue with Tech is worker productivity is very scalable if that make sense. With physical labor, there is a realistic limit on how much someone can produce, but in Tech, one person could write software that literally hundreds of millions of people use. It means even as the Tech industry grows, they don't always need more workers to sustain said growth.

Some is true to a lesser degree in finance.

I really worry about AI being able to streamline per worker productivity in Tech and Finance to an extreme, and a ton of upper-middle class jobs in those fields going away in favor of a few 7-figure positions. Also a ton of CS, Economics, and Finance college graduates who won't be able to find jobs. Part of the reason I'm choosing math is because (in theory) it's more versatile across different industries.

[PSOL]

ayy lmao