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I think parents owe it to their kids to really educate them on how to budget and put money away. I'm 26 now and I just started getting better with money about year ago, before that I spent exactly what I made without leaving myself any cushion, without even thinking twice about it.
And too many people go to college. I wish I had taken some sort of technical training right out of high school rather than going the community college ---> waiting tables ---> community college ---> dropping out ---> waiting tables route. I lucked into a good job eventually, but it took me awhile.
The problem with this evaluation is that it's too narrow.
Most people mistakenly compare the post World War II era to today's environment. With Europe all but decimated and Russia digging in it's heels, the United States was the preeminent (economic) superpower. We had a growing population, lots of young men coming back from the military and we were the only game in town. If people needed "stuff," we made it and got paid for it. No other time was quite like that, and it'll never happen again.
The Silent, Greatest and older Boomer generations benefitted, partly because of sound decision making, but mostly because of their date of birth.
It's difficult to juxtapose because people are living longer and longer than they did 100-150 years ago. Nowadays, we actually have to consider outliving our retirement. There was a time when you were lucky just to make it to that age. I know for my maternal great-grandparents, the idea of retiring was foreign to them. You slowed down, but you didn't really stop working. They were born in 1889 and 1896 respectively.
I think parents owe it to their kids to really educate them on how to budget and put money away. I'm 26 now and I just started getting better with money about year ago, before that I spent exactly what I made without leaving myself any cushion, without even thinking twice about it.
And too many people go to college. I wish I had taken some sort of technical training right out of high school rather than going the community college ---> waiting tables ---> community college ---> dropping out ---> waiting tables route. I lucked into a good job eventually, but it took me awhile.
This goes with parents not being parents anymore whether it is by economic choice of having latch-key kids because both parents are working or they choose not to because they rather be their child's friend. I honestly learned on my own but it was worth it I think. I know to try bargain brand food and see if it is bad or not and look for deals. It took some time but I've done that and do it pretty well.
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Anyone with a working knowledge of our Economy can predict that things could drag along or stay the same if enough isn't done to fix the trends.
I can explain why if needed.
Be warned, lol! This is a long post. But you DID set yourself up for it with your concluding comment!
I, for one, would appreciate your perspective. I'm older than you, and also attempt to discern the forces that have been in play during my career. I know the fact pattern I see, and the conclusions I draw from it. However, I am only one person. Most likely, I filter out evidence that does not support my bias however much I try to guard against it.
So here's my opinion about the direction of events.
I believe that ez credit has flooded the economy since the 80s and has driven asset bubbles of one kind or another since then, all on borrowed money. Leads to an unstable system that topples wildly when external variables are introduced.
In the 70s and 80s, the external variables comprised the oil crises and the decline in the auto industry, attributable to higher quality, lower cost imports. That was not a balance sheet depression, in the 80s. That was a structural depression. Dislocated workers, the decline in auto and its precursor - steel. Not being dumb, domestic CEOs took a lesson from the foreigners. They could do it cheaper overseas. Domestic CEOs began offshoring all of the industries that drove cash-hungry plant, property and equipment. They dumped a ton of domestic expenditure, and brought back finished goods with a cost advantage. Hence, the decline of the middle class: for the most part, we became the "service economy", servicing one another with $8-$12/hour jobs.
Since most could not afford to live on what they were making, in the face of high inflation and stagnant wages, ez credit metastasized. Massive corporate and household debt began driving asset bubbles. The 80s were the era of merger manias. Likely prompted by the need for consolidation - with declining demand, who had extra cash? Financial leverage became the strategy of the day.
That did not end well, since the next recession - in the early 90s - wiped out white collar jobs as well. For the first time, I'm told. Still, we were told that the "service economy" was the next wave of prosperity. I didn't see it - the only way you can bring fresh liquidity into your region (or town, or home) is by getting it from the outside and bringing it back. At the national level, without a high value-added manufacturing sector producing exportable items, where is the new money going to come from?
The service economy now in full swing, the next twist was "financialization". Banking no longer required verifiable assets to back loans. Now, lending (and scooping up closing fees) became its own reason for being. Without needing to verify hard assets, issuing bets on metadata ("derivatives") emerged to soak up the cash created by pledging every asset in the country multiple times. Our legislative branch really jumped on the gravy train, passing deregulation after deregulation, making the government a puppet of the financiers.
Here we are today. Still selling electrons to one another, with no semblance of verifiable asset backing. The economy of the top 1% is based on smoke and mirrors - but that's okay, since they own the smoke and mirrors, and nobody's ever going to call 'em on it. Those of us who are relegated to the "service", in contrast to the "financial" economy, watch as the $40/hour vet buys $20/hour beautician services, and the beautician buys $8/hr child care. Operating leverage, where you have the means to make stuff for export on a massive scale, is no longer relevant. It's more lucrative to collect fees on the basis of promises to pay. Hence, the Lehman Brothers crash and the subsequent depression, from which I believe we have not yet emerged.
What I see is a long, slow decline. The citizens' role is to act like frogs in the proverbial pot that is slowly brought to the boil. As we speak, half the people in the nation make less than $500/week if they're employed. If they've dropped off the books, they are the 100 million or so selling services to one another for $8/hr. In another 20 years, using the same operating model we've been in since the 90s, a substantial majority of the country will be doing this. At that point, even with illegal aliens democratizing the low end of the service sector, there will not be enough tax revenue coming in to keep up the façade of being a first world nation.
In many ways - real educational attainment (have we actually attempted to have conversations with the people who are public school teachers lately?) has declined precipitously. The longer we have unions in control of public school teachers, and we are paying overhead for administrators that outnumber the teachers by 3:1, and the teachers' unions maintain the fallacy that their members are educators and protect them regardless of their ignorance and incompetence, the worse educational attainment will become.
Yet, our only hope to revitalize as a nation is precisely to call out failures in critical thinking at every opportunity, and to demand accountability from our government. The logical frameworks that would help us frame the argument - yea, even to have the thought - have been eviscerated from our curricula, and are incomprehensible to educators whose understanding is limited to political correctness. In 20 years, the nation's citizenry will be too dumbed down to apply critical thinking to anything at all, and will just sit around in the slowly boiling pot, swimming lazily in circles, texting one another about what they had for breakfast, and whining about how life is unfair.
More STEM grads? Yeah, right. /sarc
The perfect setup for the 1% - the only ones who will still retain the capacity for critical thinking, and who will understand that life is much simpler and more lucrative when you can simply spin the sound bites and run everything with slogans. They will have concentrated the remaining assets amongst themselves, and will watch the proles numbing themselves on social media - while they sip champagne and make bets amongst one another.
I am a skeptic, and what I foresee is a slow decline. I just don't see any way around it.
Personally, I'm weary of listening to people pat themselves on the back about how well they did back in the day when there was still an export economy that created more evenly-distributed wealth. Now, for the most part, today's citizenry are stuck with $8/hour part time jobs for way longer than you were - and every penny of that $8 is taken up by eating and breathing necessities. I'd challenge any of the smug people here to realistically advise a 30 year old making $8-$10/hour how, precisely, he will get his $1000 grub stake together when rents are now $800/mo for a one bedroom apartment (thanks to you), and wages have not increased. Perhaps you will fund him yourself, out of the bounty of your brilliance? No? Thought so.
Frankly, anybody talking about how things were 30 and 40 years ago, and giving advice on that basis, is disconnected from reality.
Them's my thoughts, and I'm sticking to 'em until I'm given evidence to the contrary.
None of those three are in high paying fields (a County employee, a maintenance manager for a marina and a teacher), all have student loan debt, none got any sort of scholarship.
They live in a high COL area.
Yet they all are successful, are working, have cars, don't really want for anything.
So, two-thirds of your working progeny are in public sector jobs. That means somebody has had their pockets gouged to pay their salaries via ever-increasing taxes.
It's starting to look a little uneven. One taxpayer (the electrician) and two tax takers (the teacher and the county employee). Most likely in a town with a declining population.
Not that there's anything wrong with working with what you've got, from the standpoint of employers. Before the nation went to a service economy, your progeny would have had a wider range of choices. I'm sure you witnessed that yourself - there's a dearth of non-public sector jobs on the north shore.
FWIW, CT, CA and VT have the same problem. Just sayin'.
When it comes to comparing generations, I can't think of a single example in my life time of 60-plus years of one generation significantly having it better than another generation.
When I started college in 1971, I wanted to become a teacher. I was told to forget it. Teaching was a popular occupation at the time (even though it paid less than it does now), and the older boomers had taken all the jobs. The only exceptions were math, science and special education, which did not interest me. Those who wanted to become college professors faced the same situation. Too many "called," too few "chosen."
In other words, I was part of a huge generation that was very competitive. Even such jobs as supermarket checker for a major grocery chain were very difficult to get. I discovered it was "who you knew", not "what you knew" that determined whether or not you were hired. This was especially true in government jobs (city, county, etc.)
I therefore ended up working in jobs that paid hardly more than minimum wage and were far below my level of education. I lived in a small apartment with roommates. Of course, I also made choices that had an effect on my situation. Living in an expensive part of California, for example. I had grown up there, and did not wish to leave.
Then things really got bad. From 1978 to 1980, the economy was in terrible shape. Unemployment went up to double digits, as did inflation and interest rates. My rent literally doubled in one year, but I had no pay increase whatsoever and was lucky to have a job at all.
It took about 5 years for the economy to get better. But it was only better for a short time, and it was structurally changing for the worse as major corporate downsizing took place and an economy based on manufacturing turned into an economy based on services.
Around 1990 we had another recession that lasted for about three years.
Then, in about 1999, we had the dotcom boom and subsequent bust. During that short period, you had to be young and cute to get a good job. But what a job it was -- 22 year olds with no special skills or education were making six figures -- far more than I had ever made!
Then there was the great washout. I remember the wonder kids evacuating their $2500 per month small apartments in San Francisco without even giving notice to the landlord or taking their toys with them. This, of course, was just a preview of what would happen eight years later when the housing market imploded.
I get that young people have it tough now, but they shouldn't imagine that their elders had it easy.
My generation had Vietnam, as earlier generations had Korea and WW II. We had a draft then, and the death toll in Vietnam was over 50,000.
One factor that made it especially tough for young single men at the time was the sudden entry of women into the work force. The labor force almost doubled, but the number of jobs stayed the same. So employers were able to cut pay or keep it down in a highly inflationary economy, while two-income couples (with high incomes) bid up the price of housing, etc.
Many older people today have been forced into early retirement or minimum wage jobs. They have gone through cycles of downsizing and, with each job loss, they have become less attractive to employers who would rather hire the young for less money.
They have spent their savings well before retirement age and many have felt the need to support their adult children as well.
In the meantime, I see a lot of millenials living a lifestyle that could hardly be described as frugal.
My suggestion to them is to draw the obvious conclusion from their situation and stop voting for Democrats who demonize the rich, capitalism, business, and who seem to think that America can absorb the poor from all over the world while still providing good paying jobs for its own citizens.
Voting for Obama alone disqualifies millenials from complaining, as far as I'm concerned.
sure learn to weld @ ROP free and buy an air ticket to dubai and make some money.
stay out of debt
now how hard can that be?
I apologize for being dull, here, with this question - but what on earth is ROP? Thank you in advance for enlightenment.
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