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OK, a real "old timer" here...I'm 68. Born 1947, so I'm a boomer.
I not only remember how things were for me during the 60s and 70s, but I grew up listening to my grandparents speak often of the Great Depression, which they lived through as adults. My parents were born just before the Depession, and they remembered it well too.
The OP asks if things are "cyclical"...yes, they definitely are. If you take a human lifespan (~ 80 years, today) there will be a repeat of what happened a lifespan ago. 79 years before 2008, there was the great crash of 1929, which ushered in the Great Depression. You didn't need to have been in the stock market, to have suffered in that depression!
You've seen the pictures, of people standing in bread lines, soup lines...old black and white pictures? Where are the bread lines and soup libes of today? None? Ahhh, the government has learned how to hide them! There are millions of Americans who would be mighty hungry if not for EBT cards ("food stamps"). These people are invisible. They pay at the supermarket registers with their EBT cards, just as we do with our debit or credit cards. The Invisible Poor.
As a young man, I married at age 27, and my bride was pregnant with our first child when I was 28. By the time I was 30, we had 2 babies. She stayed home and cared for the children, while I bootstrapped myself into business with state contracts for trucking services. We did have a real starter home back then, a small cape with 2 bedrooms and one bath. It was not in a bad neighborhood - it was just small. We still own that little house, which comes in handy for when we visit the grandchildren. Of course, we've had other properties since then.
I started working at age 12, and haven't really ever stopped. Jobs were plentiful if you wanted one, but I wanted a business, and there were opportunities for that, too. When others post about the 'banksters', inflation, the crisis in Greece, the high student loan debt, the worthless dollar, the coming train wreck - listen closely. They are correct.
I have done well during my life, but I have 6 grandchildren that I love dearly, and I worry for their future. One reason why I keep that little starter home is to prevent any of my grandchildren from becoming homeless. I teach them, when they visit us in Maine, how to grow food gardens and raise poultry. They all know how to fish; the older ones are learning to hunt. My oldest grandson, age 18, is staying with us for the rest of the summer, when he will start community college. It is all paid for. It is all paid for, for the other 5, as well. What they do for their last 2 years is up to them, but their parents college funds for them don't kick in till their last 2 years. Hopefully, none of them will end up in debt.
They will go through some very ugly times. But they are young; they will live to see the sun shine again.
So many "old timers" in this thread insist that outright collapse is imminent, as if modern life were an abject fraud deserving of a resounding recompense. I disagree. Modernity is rife with much that's phony, but to suppose that in the coming decades we'll be subsisting on homegrown cucumbers and venison shot in national-parks, is rather a hyperbole and tantrum.
I graduated from college in the early 1990s. For an aerospace engineer, it was a most inopportune time, with a "peace dividend" that crushed the aerospace/defense sector after its burgeoning during the Reagan era. But it recovered. New enemies arose, new weapons had to be built, and jobs recovered.
The greater the celebratory excess, the greater the impending trough. This happened for example to residential housing, or in my example, to the defense industry. But "trough" is not apocalyptic collapse.
I marvel that so many people regard it to be natural and proper that blue-collar semi-skilled labor ought to merit "middle class" wages. I'd argue instead that post-WWII mass-prosperity was unnatural and unstable. What we're seeing in current times is not a catastrophe, but a return to equilibrium. Shocks, jolts and bear-markets are inevitable. We've just lived through two brutal bear-markets in equities, 2000-2003 and 2007-2009. Conceivably we're on the cusp of another one, courtesy of Greece, China, Puerto Rico and so forth. But eventually we'll recover from this as well. The new equilibrium will not be shanty-towns and raw sewage flowing in the streets, but it won't be measureless expanses of McMansions and three-car garages either.
The OP was indeed unlucky to be starting out in life exactly in phase with a substantial trough. As others have said, frugality and eschewal of instant-gratification are good recipes for eventual success. They are not guarantees; noting is. But they are eminently worthwhile tools.
No era was the "good old days", and every era had its shocks, its crises and perversions. We will, I think, no longer see in America the prosperity of 60-40 years ago. But neither will we be fighting to sacks of grain tossed from the back of UN food-relief trucks.
I marvel that so many people regard it to be natural and proper that blue-collar semi-skilled labor ought to merit "middle class" wages. I'd argue instead that post-WWII mass-prosperity was unnatural and unstable. What we're seeing in current times is not a catastrophe, but a return to equilibrium.
I marvel that so many people on this forum believe stories they heard or made up, and aren't interested in exploring what has really happened and is happening.
What is unstable is when middle class wages *don't* rise with the economy. Consumer capitalism is symbiotic and can't work otherwise. That's precisely why we had crashes in 1929 and 2008.
This time is worse, though. Globalization is key to this wealth shift and we won't see a return to sanity and rising real incomes. Not until we are as poor as the rest of the world.
When I was finishing schooling and looking for a job, I sent out hundreds of letters. Back then no computers, no word processors. Each letter was individually hand typed. It took a long time to get any interviews and even longer to find a job. I had moved to Cleveland so my wife could finish her degree. Unemployment was about 25%. I looked for jobs all over the country. My field was even worse than average since it was going through downsizing, mergers and consolidations. I lost a lot of jobs due to businesses being bought or closed. In 7 years, we lived in 5 States. It got better after that and I only lost 3 more jobs and lived in 2 more States for the rest of my career.
Buying a house was not exactly easy when I was young. We had to pay over 10% mortgage interest on our first house. Needless to say we had difficulty affording a house and making those payments. When we lived in California, we actually paid more then 50% of my gross income towards the mortgages. We had one official mortgage with the bank and another under the table payment to the seller.
These are the good old days with low unemployment and low inflation and extremely low mortgage rates.
There have always been obstacles and some tough-sledding for the upcoming generation. Everyone knows about the Depression and WWII, but then came the Korean War plus three recessions in the 1950's, Vietnam and your local draft board to ruin your life in the 1960's, oil price spikes in the 70's, job-killing Reaganomics in the 80's, and then the S&L collapses in the early 90's. The 90's after that weren't too bad, but then came the two Bush-43 recessions, and we still haven't fully recovered from those yet. You just have to stick to it and grind it out these days. Just like pretty much always.
Okay, when I say "Old Timers" I don't actually mean that, but more like just.. people who've experienced a decade or so more than me (I'm 29). But was it always bad? Is today any worse than before? Is the seemingly difficult economy of the last 7 years typical for a recession/post-recession climate? Or is this just how the media portrays it and are we all just pessimists?
I've never experienced this before. I started college in 2007 and graduated in 2011, so I really only know a tough job market. I submit 10-15 resumes to get an interview and typically need 3-4 interviews to get an offer. Even now with 4 years of relevant experience (in a STEM field) it's the same way.
Home ownership, in a decent part of town, is just a joke for people my age. Was it this way for you guys? Being married, we have a combined income that puts us in about the top 25-30th percentile for our metro, but when it came to buying a house nobody in the world would qualify us for the middle-class parts of town where livable homes cost 350-500k, so we bought in a decent working class suburb, one of the cheapest parts of the whole metro, for around 200k. Most of my friends just avoid home ownership, because they'd rather rent in a more desirable area - or stay in their parents basements. And I live in one of those cities that most people consider "affordable" (Salt Lake).
Student loans are a disaster which I don't think even I fully understand. I was "lucky" enough to grow up in mild-poverty and have the government pretty much foot the bill for my education, but nearly all of my friends from college are saddled with 10+ years of debt repayment. Did any of you have this?
Kids are just financially not an option for so many of us. The cost of having a child at the hospital alone being so high is enough to scare most potential parents out of it. Insurance premiums won't touch any of it until you hit your uncomfortably high deductible and this is before we get into the cost of childcare and buying their life necessities. Was having a kid always such a terrifyingly expensive endeavor? How did the families of decades past have 4+ kids? Having just 1 is frustratingly expensive.
I kind of want to be told, "No Geo-Aggie, it's always been like this. We all had these struggles. It's always been rough and when you're 50 you'll find your success too, just like we did." So please, if you experienced this as a 30 year old in the 80s or 90s, tell me! Or is this really due to a broken economic system that I just ended up losing the birth-year lottery in? Do we go through cycles? Are we due to break this and have a decade of awesomeness where things start to look less bleak and the typical American gets more than one job offer for every 30+ resumes sent out?
Geo? don't sweat it! Things have been worse and that was under Bush! You will be fine but the difference today is that you have to compete! Back in the day? Not everybody had a College degree and now EVERYBODY has one!
You need a "niche" today so prepare yourself for something you are really good at.
Hone in your skills.
Good Luck!
Okay, when I say "Old Timers" I don't actually mean that, but more like just.. people who've experienced a decade or so more than me (I'm 29). But was it always bad? Is today any worse than before? Is the seemingly difficult economy of the last 7 years typical for a recession/post-recession climate? Or is this just how the media portrays it and are we all just pessimists?
I've never experienced this before. I started college in 2007 and graduated in 2011, so I really only know a tough job market. I submit 10-15 resumes to get an interview and typically need 3-4 interviews to get an offer. Even now with 4 years of relevant experience (in a STEM field) it's the same way.
Home ownership, in a decent part of town, is just a joke for people my age. Was it this way for you guys? Being married, we have a combined income that puts us in about the top 25-30th percentile for our metro, but when it came to buying a house nobody in the world would qualify us for the middle-class parts of town where livable homes cost 350-500k, so we bought in a decent working class suburb, one of the cheapest parts of the whole metro, for around 200k. Most of my friends just avoid home ownership, because they'd rather rent in a more desirable area - or stay in their parents basements. And I live in one of those cities that most people consider "affordable" (Salt Lake).
Student loans are a disaster which I don't think even I fully understand. I was "lucky" enough to grow up in mild-poverty and have the government pretty much foot the bill for my education, but nearly all of my friends from college are saddled with 10+ years of debt repayment. Did any of you have this?
Kids are just financially not an option for so many of us. The cost of having a child at the hospital alone being so high is enough to scare most potential parents out of it. Insurance premiums won't touch any of it until you hit your uncomfortably high deductible and this is before we get into the cost of childcare and buying their life necessities. Was having a kid always such a terrifyingly expensive endeavor? How did the families of decades past have 4+ kids? Having just 1 is frustratingly expensive.
I kind of want to be told, "No Geo-Aggie, it's always been like this. We all had these struggles. It's always been rough and when you're 50 you'll find your success too, just like we did." So please, if you experienced this as a 30 year old in the 80s or 90s, tell me! Or is this really due to a broken economic system that I just ended up losing the birth-year lottery in? Do we go through cycles? Are we due to break this and have a decade of awesomeness where things start to look less bleak and the typical American gets more than one job offer for every 30+ resumes sent out?
At the state university I attended in the early 1980s, tuition was around $300 per semester. It's now over $5000. I feel for kids trying to pay for a major college tuition today. I did have some student loan debt, but it was only a few thousand dollars and I easily paid it off in a couple of years.
The average student leaves college today with 30K in debt. Thats the average. Since 1980 when you went the cost has increased by over 440%.
Now imagine starting your career with a average income of around 60K say....and trying to service 30K or more in debt. Thats a decade of lost wealth.
Half a year's income is a decade of lost wealth? I think it's a half year of lost wealth.
How much "lost wealth" is a car?
It's the education that's enabling you to make $60K instead of $25K, where the $60K will grow to $120K in a few years if you're any good, instead of remaining at $25K forever.
The one thing that is different is that he economy is more global now so you are having to compete more directly with qualified foreigners. I'm working in Peru and one of the girls that worked for me just sent me her resume to review (she's looking for a new job) and she speaks English, Spanish, French, and Portuguese fluently and can communicate in German, has great experience, is a good worker, and she is struggling to find a job here and she makes much much less than you would consider working for. I told my kids to prepare to compete against the foreign labor because I've worked internationally for a dozen years and see very qualified and motivated labor that will work for cheap.
Just so you know, when I was in college, I worked 30 hours per week and went to school ful time and worked 80 hours a week away from my home in the summer to afford college...life is not easy, get used to it.
Not sure when you went. If it was after 1980 then I have some sympathy.
The main issue isn't jobs. I have a fairly decent one and make some pretty decent money. The problem is a huge amount is repaid to the banks from non-dischargable debt. That needs to be put under control before the economy can truely restabilize. Otherwise all disposable income will go to the banks (and government) and the economy will implode.
Also don't you think your local family pediatrician or dentist has 300k (after interest accrual that's not uncommon) of debt that is more likely to behave in more unethical ways and perform more unneccessary procedures to service their own debts? It's a vicious cycle that has the potential to uproot the ethics of many of the professions.
I was born at the start of WWII and lived on a very small farm so I was used to working. I knew that after high school I would be drafted and I was in 1959. In for 8 years and 9 months. My pay at the end of that time was about $350 per month. In 1968 started my career with a major corporation at $1.95 per hour or about $350 monthly with overtime. My wife also had to work and we purchase our first very small house in the worst section of town next to a rail road track. The cost was $9,000 and the trains would always wake you up during the night.
I purchase a new car in 1967 for $3,600 about one years salary. College was almost free with the military and my company. I was lucky in the job market because a young captain that was going back to college told me to switch my major for accounting to anything computer related and I did.
I believe expectations are much higher for young people today, they are better educated and knowledgeable than my generation. We also trusted the system and seldom questioned authority to a fault. The corporation feared unions and treated us well until the 80's. I was in management at that time and had meetings with supervisors that had to identify employees they thought may vote union. We also had printouts of everyone age 50 and over, salary, growth potential, informed and up to date with new technology or is it time for a gentle nudge to prepare for transfer, retirement or termination.
We eliminated entire departments, pushing all the employees to small new start-up company. However the people would be paid $3 less per hour with out benefits if they wanted to work for that company. Eventually even large mainframe computer systems were being operated from India.
I learned very fast not to invest in people but invest in corporations via stocks. You will earn much more by doing this than you will ever by working for the corporations.
I would say it was less difficult for me in the job market in my field. Not much competition and outstanding training from the corporation. Even flying me out to California for specialized training in the IBM management school and other training. I did not work for IBM. I could never again qualify for the position I held during my career. Starting pay was very low even compared to minimum pay today. However, after completing college and promotions by retirement in 1990 my pay was much higher than average.
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