The Great Reset, applied to Millennials

“Their economic fundamentals are fundamentally different,” said Christopher Kurz, an economist at the Federal Reserve.

Mr. Kurz and his colleagues last year analyzed income, debt, asset and consumption data to figure out how millennials compared at similar ages with Generation X, people born between 1965 and 1980, as well as baby boomers, those born from 1946 to 1964.

They found that millennial households had an average net worth of about $92,000 in 2016, nearly 40% less than Gen X households in 2001, adjusted for inflation, and about 20% less than baby boomer households in 1989.

Wages didn’t look much better. At the same ages, Gen X men working full time and who were heads of households earned 18% more than their millennial counterparts, and baby boomer men earned 27% more, when adjusting for inflation, age and other socioeconomic variables.

Among women, incomes were 12% higher for Gen Xers and 24% higher for baby boomers than for millennials, using the same measures.

That is from Janet Adamy and Paul Overberg at the WSJ.  Note this too:

Millennials, as a group, are better educated than any generation before them. About four in 10 ages 25 to 37 hold at least a bachelor’s degree compared with about a quarter of baby boomers, and three in 10 Gen Xers when they were the same age.

You can see the problem, yes?  Here is the original paper by Christopher Kurz, Geng Li, and Daniel J. Vine.


Alternate title: why student debt forgiveness is not necessarily regressive

Signalling via a college degree is rather expensive, especially for the additional 10% of marginal millenials (as compared to GenXers) who chose to signal that way.

Higher % with college = more deferring the start of adult earnings. Add in majors that don’t enhance earnings potential and mix in higher college debt and none of these results are surprising.


"You can see the problem, yes?"
no tell us please now
what is the problem exactly
get to the point
where does it hurt

never mind
read it on

ah yes, the problem. is it a problem or a problem that needs to be solved? it is a problem with no solution. a final solution. to give names to people that overlap in time, that differ by 10 years, that have association (siblings, certainly). it is the same to confuse that which ought to be (normative), with that which is (the case I have mentioned). In the case I have mentioned, you are solving for time, not behavior. there are errors, mistakes, and there is blasphemy.

it 2/3 of tragedy is comedy so there is that.

I recalled the foolishness of our scholars who had once maintained, at the time of our procession of the Sacred Heart, that it was unheard of to ever have a procession of the Blessed Sacrament outside the Octave of Corpus Christi. When someone has never left his back water and seen nothing else, he should be a little more cautious.

No one knows who had the Pantheon built, named as such since it is dedicated to all the gods; but it was Agrippa, son-in-law of Augustus, who had the portico built. Pope Boniface IV dedicated this temple to the Blessed Virgin and to all the martyrs on May 14, 607.

Yeah bookmaking this wasn’t a high risk conclusion outstanding post!

Since this is Marginal Revolution, I emphasize the marginal increase in the rate of people attending college. Our educrats and politicians have been saying that everyone should attend college and more, academically-mediocre millenials follow that advice. But as Richard Vedder has pointed out, there was not a corresponding increase in the percentage of jobs that actually require a college degree. So the additional 10% of marginal millenials getting college degrees (or worse, trying and failing to do so) are stuck with the full opportunity costs of their degrees while ending up as baristas at Starbucks trying to engage customers in a conversation about "white privilege."

The socialist solution is to compound the problem by urging more people to attend college and have taxpayers pick up the tab. It would be less costly for everyone concerned to pay people to dig holes and fill them.

More women with higher education relative to men PLUS the dramatic increase in overweight and obesity in the past generation, means far fewer people can find suitable mates.

Women's expectations are too high, as they now earn more degrees than men do and expect their partners to have the same level of degree, plus women's physiques far less acceptable, when compared to a generation ago.

This all results in fewer marriages, which contributes - in addition to marginal students going into debt to get useless degrees - to greater household expenditures and fewer savings.

Just buy yourself a Slovenian, hun.

A female Slovenian like Trump bought, or an indeterminate gender Slovenian like you bought?

She's female???

Eh ... obese people cannot marry each other?

I ran some numbers after graduation. The cost of my professional degree worked out to be almost exactly 1/3 tuition, 1/3 lost earnings, and 1/3 extra taxes, where the "tuition" third was the full list price(!)

I think people badly underestimate the lost earnings and extra taxes costs of a degree.

When will Millenials learn that socialism doesn't work. It never has, it never will. They spend all their money on Starbucks and IPhones and now they want their handout from government. Whatever happened to hard work and saving money? We should never reward irresponsibility.

the millennials have been rewarded in ways that even Gen-X wasn't.

Gen X: 1 in 10 kids had acne problems, now it is down to 1 in a thousand.
Gen X - for every five kids in Gen X who had to wear glasses, only one millennial has had to. And due to advances in styles, most of the millennials who wear glasses do not look dorky.
This is a big big thing in 80s retro shows, by the way .....

On the other hand, the young men of Gen X and the millennials share the fate, if they have chosen to join the military, of serving under equally bad military leadership. Well maybe Trump will be better than the preceding clowns, and maybe Tulsi Gabbard, the least bad of her ilk, will be the next Democratic winning candidate for Commander in Chief, but you can't change history, and Gen X and the millennials went to war with the idiotically-ignorant-on-military matters ClintonBush and Obama in charge.


Never if they're like the Greeks or Argentinians (who apparently are ready to return Evita to power).

Evita Peron (1919-1952)? That Evita?
What fresh hell is this?

It's current political incarnation of Evita: Cristina Fernández de Kirchner.

J. Vernon McGee (yes, that J. Vernon McGee) in his "Radio Bible" commentary did a better job explaining what the book of Job was about than one would think possible.

Anyway, another book that easy-going middle-aged people of our day find a little obscure is Daniel and, once again, in the course of explaining that book of PROPHECY, J. Vernon McGee explained why "Antiochus Epiphanes" was (as nobody should want to be, trust me) a little horn on the great creature of the historical evil of his day, the poor creature, with several horns (the exact number is described in the Book of Daniel, you can look it up).

Argentina has rarely been blessed by God with good and honest leaders, that goes without saying.

Next time you are in an old folks home, doing volunteer work (and I hope that everyone here volunteers once in a while) - if you want to get a laugh from some of the old people, when they are complaining about their children (not that my experiences in old folks homes have often involved such complaints - to the contrary, most of the very elderly I have been fortunate enough to meet are very fond and proud of their children) - well, tell them, well, things could be better, they could be worse, your kid could have been the next Antiochus Epiphanes. Sometimes - not often, but sometimes - you will get a laugh.

et si vous parlez seulement le francais ....

"Madame, êtes-vous en état de reciter le Pater?"

.... "Repetez," dit-on avec douceur. "Je ne peux pas."

"Notre-Père, qui est aux cieux" commenca-t-elle doucement, avec l'accent du pays d'Auge.

"PATER NOSTER" dit on, d'une voix surhumaine.

I remember.

You better take your medication...

+1. He polluted the hell out of this page. Better 10 Mulp or clockwork walls of text than this neverending stream of mental insanity.

and .... billions of people on the planet.
2 out of those billions quoting stale "medication" insults and stale "wall of text" insults.
"that's your opinion" ---- big lebowski

"Arrogant people think that those they agree with are intelligent, and those with which they disagree are stupid".

The effect vanishes as time goes by and we understand better other people.

Go away, nitwit, until you grow up, and learn a little respect for your betters...

And if you knew I was quoting Bernanos, the greatest writer of the 20th century in France, well than tell me you knew that.

I am so tired of you arrogant ignorant trolls.

Go away until you learn a little wisdom.

and if you did not recognize the quotation - well learn some humility.

Read the Bible, pray for enlightenment.

Or just go back to watching Bill Maher or listening to sad old men like Harold Stern.

The choice is yours.

For the record, if you are the "medication" guy who shouted at me the way those sad losers so often shouted Babba Booey at golf tournaments ---- and if you are reading this, please do not be insulted. I am a supremely gifted psychologist ( actually, more like a "social worker" but such distinctions are unimportant to those of us who actually achieve something good by our efforts in this world). I am used to my patients telling me I am the one who should be taking medication.

And please do not be embarrassed, I promise you, nobody reading this knows whether or not I wrote what you said, as an excuse for these explanatory comebacks ( and please read a little bit about Bernanos, if you have not already, the old guy was right about a lot of things, although of course he was wrong about a lot of things too - I remember)/

J Vernon McGee was right about most of the Bible, too.

None of us are right about everything in the Bible, not in this century, anyways, you would have to go back 2,000 years or more to find a first-class expositor of the Bible (Jesus, John the Baptist, Mary the Mother of God, Daniel, and, at least for a few years when they were at their prime, Isaiah, Jeremiah, and Ezekiel).

Like I said, I remember. And may I ask you a favor? Please remember that people like me ALWAYS know whether or not medication is called for.

God loves you, my friend. Trust me.

And you have no idea how many angels - angels on my side, to begin with, and angels who love you, as well, in addition - you have no idea how many angels are praying with all the might angels have when they pray, in the hope that you will never again say anything as stupid as what you said to me. Not that I am important: I pretty much think it is funny when someone tries to insult me: but what is important is this: God loves you, and does not want you to try and hurt His friends.

Cor ad cor loquitur.

I remember

you made me laugh so there is that

God loves you, my friend. Trust me.

Moab is my washpot: think about it.

for the record, the only reason I waste my time on "websites" like this is to communicate with people like you, poor little "medication man".

What you think about me is not important.

What is important is this: either you understand God loves you more than you can imagine, or you don't.

Think about it.

And years from now, you will see why I dared to say I was a supremely gifted social worker. You are welcome. I had better things to do with my time but I felt compassion for you (that was a Borges-level contradiction, I know that)

Now tell me again, one more time, why I need to take medication.

Say it in your own words!

(the only reason I spend time on websites like this is to communicate with people who do not know that God loves them more than they can imagine)

the funny thing is, the worst thing you can think of to say to me, in your role as a troll, will be a simple weightless joke.

Nobody will believe that whatever you said, with your greatest effort at saying something nasty and filthy, was not some sad little insult that someone who was pretending to be you said, to make you look bad.

But my friend, we know better.

You were not born to be a troll.
God loves you.
God gave you a name on the first day of creation.

I remember.

Trust me, I do.

God loves us all.

Tell me, in your own words, that I do not understand.

God gave you a name on the first day of creation.

Remember that.

that moment when you remember that God gave you a name on the first day of creation ----

that is why I bother.

Wake up sheeple

God gave you a name on the first day of creation.

Remember that.

Either you understand that God loves you more than you can imagine, or you don't.

If you don't, think about this:

you do not understand time
you do not understand justice

if you understood either one of these two you would be a billionaire

maybe you understand love
but probably you do not understand any two of these three

maybe you understand love, but do not understand time or justice

maybe you understand time, but do not understand love or justice

maybe you understand justice, but do not understand love and time.

Tell me where I am wrong.

For the record God loves you more than you can imagine.

I don't care what your IQ is.

Wake up.

Actually I am pretty much the same person at the old folks home as a volunteer that I am here as a commenter.

I hope you too volunteer where you are needed!

It does not take much to be a good volunteer at the old folks home.

Learn to play an instrument or two, a few chords on the piano or a couple melodies on the cornet. Nobody expects much, and people are always grateful when we try.

Be ready, here and there, with a few of the old sayings from decades long gone "you don't say", "my word", "if winter comes can spring be far behind?" ....

and remember this.

You have never met a person in this world whom God did not love more than you can imagine.

And if you think I am wrong about that .... well, think about is some more.
I am among the most humble of people but I take pride in this:

I know that God loves you more than you can imagine.

I hope you volunteer too when you are needed.

Say what you want to me, pretend to be a vicious troll, or just an ironic and subtle commenter who wishes to "make it known" that people who say "God loves you more than you can imagine" do not know what they are talking about ....

say anything vicious you want but I know this


(I remember, Sorry to say that, I know it sounds like the sort of thing people who lie about things say, but I do not lie, and I really do remember. God gave you a name, a wonderful name, on the first day of creation. I don't remember that, but I do remember --- but I really do remember having understood why there is no possible reality in which God did not give you such and such a name on such and such a day and that name was given to you on the first day of creation. God did not want to wait. God has always - and this I definitely remember - God has always loved you more than you can imagine, well, unless you have an imagination that is beyond, far beyond, the sort of imagination that the average person with their name in the phone book can be proud of).

Cor ad cor loquitur.
You don't want to know what I know about the reasons why people don't know that

Trust me, I have lived a long time and many many worse people than you have trusted me. And they were not wrong to do so.

Anyways, I hope you volunteer too when you are needed.

Volunteer when you are needed.

Nobody cares if you are a millennial or not.

In my minimal efforts employed at writing these comments, I spent less than one percent of the energy I have spent today on helping people off-line.

Just saying.

Volunteer where you are needed.

"If you have ever read, with understanding, the poems of Whitman or of poor Victor Hugo, you will not regret the time you spent reading these comments"

tell us again about your prole belief that everyone you disagree with needs medication, prole dude

sturm and drang. people say drang like they say prole, like storms and language. drang is silence and what happens in that silence. I am nothing. I-- -- am nothing. I am I am my love, the life, thy, it is all they! not Him. the storm and lang that's all memory. what is so hard about that? the prole is the math. the storm and lang and memory the music. the math fits the memory, and there is tomorrow.

it is simpler than that.
God is your friend.

You and God are pals.

No storms, no nonsense.

Just God and you, almost as if you were both creatures of God, two close friends.

Nietzsche and those other clowns you were pastiching were, at their best, talented, but they went too far, and hinted that they knew more about God than they did, trust me, I know more about God than poor little Nietzsche, or the drang dudes of the 1780s and as God is my witness it was all nonsense, there was no storm, no drang, it was all simple ----
GOD LOVES US ALL (easy for me to say, I guess, since I do not really believe this is 2019 - but you are as smart as me, and you can reach the same conclusion in your own way)

No storms, no nonsense.

We may be troubled in the first moments of the storm, but in the morning there is joy

in matutinum laetitia

sea-memory 1) lunar rhythm 2) sun cannot disappear 3) do NOT covet

Nice - the sin I am least tempted towards is envy

Never met anyone who did not want to live a life as beautiful as mine

"God loves us the way we are but loves us too much to let us stay that way" ////

"It is no small thing to be a friend to a creature who never had a friend in this world"

Nobody will ever explain why I am wrong to say such things.
Trust me.

I am so tired of trolls, I thought it might be nice to ask them to say something witty.

Just to show that they are incapable of wit, because, trust me, no troll will ever say anything witty in response to what I have said this afternoon.

Sure the trolls of this world can say stupid nasty things.

But there is nothing interesting that such trolls can say in trollish response when someone says ---


God loves us all. Wake up.

r u a track runner?

no no no.

I have seen the faces of those who saw the face of God

you have no idea how humble I am, because of what I have seen

I do not believe in tracks

and if I did I would not

believe in track running, except as a way to pass the time

and me and time are friends and so I would never engage in an activity just to pass time

I hope that makes sense

friendship should be easy to understand

if it isn't, well, God bless you, someone needs to pray for you more than they have prayed heretofore

and don't worry.

if you need prayers, you will have those prayers.

what you do, knowing that, is the question.

Good luck, my friend.

Please don't take this the wrong way but I have spent thousands of hours talking to old folks in old folks homes, lots of them had an idea that they weren't really old, they were in the old folks home by mistake.

So I, who am a big fan of the truth, would say ---- well I can fix you up with a hot young lady in her 50s ( I would say this to the old men) or I can fix you up with a fine young man in his 50s ( I would say this to the old women) and always in response I would get a hesitating response- well maybe that is not a good idea, maybe it is not worth your time ....

and here I am on the inter webs talking to you all the way I talked to those old folks.

Maybe I am an idiot.

But God loves you, and God was always there for you when you needed Him.

You know I am right.

And I remember the scornful looks on the faces of those old folks - God bless their hearts, it was probably the last time in their life they had the energy to have a scornful look - and I remember smiling at them and I remember they knew that I cared about them and I only wanted to make them happy.

Tell me where I was wrong.
You can't.

if you are reading this long thread of comments before it is deleted, well, thanks for reading/

I am generous and I am completely fine if this is all deleted.

Like I said, 99 percent of my efforts are off line.

Next time you see an old person you may be seeing someone who knows that GOD LOVES that person and who knows that because

I told them.

That is what matters to me.

It is no small thing to be kind when nobody notices.

If inequality really is rising, things look even worse considering that outliers screw arithmetic averages (median would be a better metric here anyway) which is easily possible given tech wealth...

Using means should be outlawed.
Medians are so much more representative.

@dave Barnes - Do you believe in "one person, one vote"? That's not how shareholder proxies are decided. From an economic point of view, the means justify the ends (pun intended).

Sure, means and medians are great and all, but have you tried trimmed data?

Such is life in Trump's America.

“They found that millennial households had an average net worth of about $92,000 in 2016”

Yes Thiago it all began under Trump.

I do not know what you are talking about. I am Thomas, from the great state of Texas, or Tennessee, or was it Wisconsin?

That is an impersonator.

That too is an impersonator. I am myself.

I am Spartacus!

When did US higher education die? I want to place the date on the head stone.

Famous scientist Mr. Sidis was a fierce of American education of his time.

If millenials wanted a higher net worth they should have chosen better paying jobs. Sad!

They did. They just got them later in life because of all that education they (we, I guess) got. So measuring at the same age is a bit misleading. Comparing net worth 5 or 10 years out of school would be interesting.

I'm sure Gen X and Millennials would both be making more money, if the Baby Boomers had prepared for the retirement.

Millenials are lazy and entitled. When they stop whining, they might start winning. Might.

I wonder if this makes Bryan Caplan really mad or does it make him whistle with happiness knowing that he has a whole book on this problem?

I made my first million, as a GenX, before age 21. It was my inheritance, from my 1% family. Their net worth today is in excess of $10M. But--this is key--as recent as the early 00s we were concerned with the estate tax. At that time it was something like a mere $2M max limit before estate taxes kicked in. Then Bush II, bless him, raised the death tax limit so now it's less of a concern ($11.2M). That's why you have to constantly shed assets to worthy family members throughout your life. Not just the gift exception either. Too complicated to discuss here. We're not that rich, as Oprah Winfrey says, the first $20M is the hardest to get, then it's all easy (note she said this about 20 years ago, so now I bet it's more like $30M).

I myself have worked and on my own, for my age, I'm in the top 25% net worth according to this "net worth by age" calculator:

But, take it from me, when I retired in my 40s, I did not miss working one bit (work is hard, and if it's not, probably your job is too easy), I found a woman (outside the USA; inside the USA it's much harder, especially Silicon Valley were there's a shortage of woman, while the DC area I've read is the opposite, a shortage of men), and I'm happy doing nothing but sponging off my family. How you doing reader?

"made" lol.

Clearly on the arc of "shirtsleeves to shirtsleeves in three generations" except you have no progeny.

"... except you have no progeny."

Recall, the second-most interesting man in the world said his pet monkeys were very like naughty children - though I think they were so naughty he set them free.

Which reminds me of a Pakistani computer repairman I knew who kept an African Grey in his shop for many years. Then one day it was gone. He had released it. I may have expressed surprise, even betrayed a bourgeois dismay. "Would you like to spend your whole life in a cage?" he shrugged.

@BD - how do you know? Your kids have flown the coop. I doubt they even call anymore, especially since there's no inheritance to interest them. Who wants to talk to a boring old accountant who thinks 3%/yr is a decent return?

@peri- I gave the monkey to a guy who promised to take care of it. More work than kids. If you release it, it will be eaten as it's used to humans. They eat anything that moves in the Philippines, same as I once read about China, that's why there's hardly any animals except house sparrows. Not even wild pigeons (we raise pet pigeons however).

On a fireplace mantle of brass veneer, stood a green-rimmed glass lamp with a spindly caged frame—tied together with duck tape. A painted man with light brown skin, a gray brow, patches for bangs, and straight red lips leaned his elbows on the frame. He had a handkerchief in one hand, his knuckles were worn, and from the other hand, an array of black keys were on a table. Along the pink-triangle of an outsized watermelon were black seeds, and the watermelon’s shadow touched the keys. The skin of the watermelon contained vast diagrams, like wine on a glass, between the darker stripes of green.

I don't know about that, Ray, but a terrible/ terrific read is Jonathan Franzen's piece about the birds of China, and the birders of China, plus a little golf. (Loss is the norm everywhere, but to love birds in China is an unusual and tragic fate, worse even than heaving your anchor into the job market during the Great Reset.)

@peri - thanks, good article. On a somewhat related note, avoid buying strawberries in the USA, as they are called the "Devil's Fruit" due to the incredibly difficult back breaking labor needed to pick the fruit by illegal workers who often sleep outside. From a "New Yorker" type article, forget where, but similar to what you cited.

I come out pretty well on that calculator, buy my Asian girlfriend does even better. That's the way you do it, Ray.

The commenters on the WSJ article think it's a fabrication and the damn millenials just need to quit drinking Starbucks and get better paying jobs...

Some of that is true.
Way too Millennials that I know don't cook. They spend (waste) money on prepared meals, order using Doordash, and dine out.

Yeah, as a related point, I refused to pack my lunch for years; ate out almost every day (although some of those got charged to clients when I was travelling). Now that I have a mortgage, that seems really dumb and I wish I had a tenth of that money back.

But their many years' long attachment to skinny jeans suggests a frugal reluctance to start over with a new wardrobe.

Coming of age during the worst economic crisis since the great depression has permanent consequences. Talking about bad luck. Where one starts in life is where one often ends up. By the way, the adverse consequences of an unlucky birthdate apply to graduates of elite schools: if one tracks the earnings of graduates from the elite law schools, one will observe the same pattern of trailing those who came not only before but after as well. One will recall the mini-scandal when it was discovered that some elite law schools were actually paying part of the salaries of the millennials, which could be explained as evidence of the schools taking responsibility for them or an effort to protect the rankings of the law schools (measured in part by the income of the graduates).

"Where one starts in life is where one often ends up."

Back in 1919, this was true.

It's the same amount of true, more or less.

Yes flooding the countries with at least 1 million competitor immigrants in the younger ages was acgreat idea.

Low skilled immigration, automation and higher levels of international trade all tend to put downward pressure on the lower quintiles. This isn't rocket science, but it does seem like a lot of people are in denial.

The stock response has just been to get job training and more college degrees. But at a certain point this just leads to lower returns to a college degree and a lot more marginal college degrees.

Yeah, Immigration Denialism is rampant. I do a simple check on articles like this: Does the text string "migra" appear anywhere in the article?

95+% of the time: no.

This would seem like a simple paper to publish: pull up 1000 articles on "inequality" in the NYT, WSJ or WP. How many of them mention "automation"? How many of them mention "immigration"?

By the way, does anybody write academic papers tracking the use and disuse of politically tendentious text strings. For example, I did a little study of "Emmett Till" versus "Tawana Brawley" in the New York Times. Back in the 1990s, they were used roughly the same amount, but by 2017, the former was appearing once or twice per week while the latter was down to once every few years.

1M out of a country of 330M isn't "flooding" the country. That's 0.003%. More like pissing in the ocean. You anti-immigrantards need to learn math.

.3% is 100 times greater .0003%, who needs to learn math now? Also the labor force is significantly smaller than 330 million.

"1M out of a country of 330M isn't "flooding" the country. That's 0.003%. ... You anti-immigrantards need to learn math."

That is funny as hell. Was it a troll or just an idiot? Hard to tell, but I lean toward idiot.

ROFL. Now shoot the other foot!

Of course, as people that are not in the US do not compete with Americans, right? It’s better to make hundreds of thousands of Indians working in tech compete from abroad, making pennies on the dollar vs their current salaries. They will be so uncompetitive!

Mexicans in the US compete with us, but if they are making cars in a Mexican factory, they don’t count. And if they did, we’d just add tariffs to everything. Let the rest of the world buy cheap electronics made abroad, as fully American made things would be better.

more college degrees != better educated

This is what I was going to say. Failing to adjust for the type of degree and assuming that the rigor of coursework is unchanged over time gives a measurement of human capital that is, at best, worthless.

Not really, though, unless you have evidence that Boomers and GenXers were significantly better students and chose more careerist courses of study. One might just as easily conclude that a slacker Gen X student with a bachelor's still earned more than a slacker Millenial.

And many a Millenial was the recipient of "it's more important that you get a degree than what degree you get". The advice may have been wrong, and it doesn't necessarily follow that we should redress the consequences of its being following, but still: encourage kids to go to college come hell or high water, then chastise them as adults when the high water came - there's a word for that.

Well, there are amusing statistics about the amount of time college kids spend on their coursework compared with students from earlier generations. And it seems likely that somewhat earlier generations were, on the average, better students, if only because it's usually, though certainly not always, the better students who are more likely to go to college, so greatly expanding the number of people going to college would seem to reduce the average quality. There's a state two-year college where I live that has no problem admitting students who didn't finish tenth grade and whose IQs are as low as 80. Did that happen in the 50s and 60s?

There's only so much cognitive ability in a population, and the overall mean value changes only slowly over time. If you send the top 15 percent to college, a college degree means you're in the top 15 percent. If you send half of the population to college, you might only be average, or close to it.

I'd agree with that. I guess AOC needs no introduction, but it's seems to me that it is obviously unfair that she cannot sue Boston University for what Boston University did to her. If I were on the jury she'd get her tuition money back plus a huge damage award for the functional equivalent of a lobotomy she got while there.

Hahahahahaha! AOC is so stupid.

aoc already has a racehorse named after her in Britain. How many people can boast that achievement?

Fast track to being a horse's ass?

Increased housing costs in cities where entry level jobs are plentiful aren't helping the situation either.

Millennial here. I graduated college in June 2009 (four months after the stock market bottomed out) and considered myself lucky to have gotten a job doing cybersecurity consulting for the U.S. Federal Government (the only organization creating labor demand at the time). I was paid $45,000. This is with a degree from what Brookings calls one the best value added universities in America ( Because I was a high performer, my salary slowly crept up, until I had the option to get off the track and go to business school, to try to reset what my market value is anchored at.

The only advantage was that I built a decent 401k on cheap stocks after the financial crisis and now have a decent nest egg. Still, my lifetime earnings are probably down at least half a million because Clinton, Bush, Greenspan, Obama, et al. screwed up the economy so badly.

Cowen spends a lot of energy promoting future potential economic growth as the best way to create the most good in the world. I don't disagree, but perhaps he should focus more on the output gap that we still haven't closed after a decade of <2% rates, lame fiscal stimulus, a broken education system, inadequate healthcare, monopolistic rent seeking and land speculation.

Isn't closing the output gap just another way of saying increasing economic growth? Sounds like you two are saying the same thing.

That's not the way I interpret Cowen's pro growth philosophy. To me he is addressing long run growth through technological advancement, i.e. the technology factor in the Solow growth model, where capital and labor are scarce and supply constrained, but technology is not.

What I am describing is a situation in which there is a huge amount of slack in the capital and labor markets (an exogenous fall in aggregate demand). There are trillions of dollar bills laying on the sidewalk that governments are not picking up, while the economists jabber on about output ratios and long run technology.

As humans, we probably overrate the very short and very long runs. The medium term, say 20-40 year stretches are where we should be aiming to maximize our output. Any shorter and we get back to Greenspan puts; any longer and the damage you do to the social fabric starts to equal the gains you get from technologically leveling up (great leap forward, Russian/Soviet industrialization, etc.).

Unemployment rate is 4% there's no slack

Unemployment rate is an unimportant rate. Pay attention to labor force participation:
After a five years of decline post GFC, we have been stuck for five more years at 20 year lows. 15M workers idling away doing opioids, collecting disability, stuck at home without desirable job skills or too far from (expensive) centers of industry and employability.

Hey Tyler, I can't guess what the problem is (sorry not trained in econ!). Would you mind giving me a hint? Is it just that millennials are starting jobs later in life?


Mehdi, it is mostly due to timing of the Great Financial Crisis. The reasons millennials are so fare behind in owning wealth are threefold:

1. Salary in year (t) can be modeled as a function of your salary in year (1) of work because jobs the labor market anchors on your previous salary, so workers get tracked unless they switch professions/careers, in which case they are usually starting from entry level wages again (
2. Capital formation is difficult when your income isn't high enough to save at significant rates. This is particularly true for the half of America who builds equity through home ownership rather than buying stocks, but even those millennials who would have a sizable stock portfolio at their current ages under normal circumstances, were not able to buy while stocks were cheap.
3. Monopoly rents in three key sectors have ballooned like crazy due to Baumol's cost disease ( These sectors, housing, education and healthcare have not shared in the twin productivity booms from the internet and globalization (they are constrained by physical space). Therefore, while everything else gets cheaper, these sectors have balanced the general deflation with staggering sectoral inflation. Because they are not optional things to spend on, Millennials have been especially hard hit. Prior generations got these things at massively subsidized rates (particularly housing) and future generations at least have higher income to compensate. Still, it's better to be a boomer than a gen z, but worst to be a millennial.

1. Weren't 2001 and 1989 the tail end of two periods of great prosperity for the USA? Do those dates truly represent the "average" situation of the generations with whom the comparison is made? What happens if you use 1992 and 2003?

2. If the millennial generation is the best educated, how does getting later in life into the workforce affect your ability to accumulate assets, especially when there will be higher student loans to cover the longer time studying?

"1. Weren't 2001 and 1989 the tail end of two periods of great prosperity for the USA? Do those dates truly represent the "average" situation of the generations with whom the comparison is made? What happens if you use 1992 and 2003?"

First thing I thought of. One of there very best ways to prove a point in the field of economics is to very carefully choose the beginning and ending years of your studies. Also, if these claims were to be meaningful, we would have published at the same time the relative performance of the economy in the preceding ten years or so as well as the trend for the numbers being measured. Was this a sudden change? Did 90% of the change occur in one or two years with economic extremes?

Never trust any comparison of wages or wealth "adjusted for inflation" beyond, say, ten years. The sensitivity to measurement becomes too severe and the rate of modern technological progress makes the idea of comparing bundles across time untenable anyway.

The ungreatest generation

We are all victims of our age. In my case, I came of age when the stock market had experienced a long period of, well, mostly nothing, while the generation before me experienced a collapse of both the stock market and the economy. I vividly recall my grandmother teaching me the value of earning interest. Interest. Rising asset prices as the path to prosperity has been a recent phenomenon. One will recall an earlier era when rising asset prices was the path to prosperity. I am always amused how the blame for the financial and economic crisis is spread around like peanut butter: if everyone is to blame, nobody is to blame. Is that comforting or ignorance? It's a constant struggle to see what's in front of one's nose. I must have a large nose. At the depth of the recent crisis the banks were at risk and needed to repair their balance sheets. This could be accomplished by raising capital from investors. Or by rising asset prices for the assets on the balance sheet. Duh. I am greatly impressed by those who saw the obvious, as the obvious is not, well, all that obvious. Interest. That's what my grandmother taught me. It's obvious.


My first job was as a stockbroker at EF Hutton in 1978. The DJIA had been trapped between 600 and 1000 for 15 years and didn't break above 1000 until 4-5 years later. And dividends were not substantial at that time and inflation during the 70's was so great that Paul Volcker felt the need to raise the Fed Funds rate to 20-something per cent.

Thus, my first investing lesson was not that the stock market always (eventually) goes up and I have been a cautious investor ever since.

I still fear the day the 401k millionaires find out the stock market can go down and stay down for extended periods. And not just the 401k holders. Pension funds, endowments, and all other manner of people who rely on an eternal bull market.

Then deduct management fees and the deferred taxes on your distributions, which are dependent wholly on the future sales price for your (in most cases) mutual fund shares. I think this will be a slow train wreck. We'll see.

lessons to be learned

I don't believe you are looking at the issue from the correct perspective. The 401K millionaires are doing just fine. They are by far the exceptional person. Even if the market is stagnant for 15 years they are way, way above average. They've actually saved a substantial portion of their income.

"An October 2017 Government Accountability Office (GAO) analysis found that the median retirement savings for Americans between age 55 and 64 was $107,000. "

From the WSJ article:

> The Cochrans are working to pay off $377,000 in student debt.
> “We have to be far more strategic and creative in order to try to fit everything in around our student loans.”
> the couple chose a state that mandated insurance coverage of in vitro fertilization
> Ms. Cochran also has a 17-year-old daughter from a previous relationship and has promised to pay for college

When most people think "student loans", they probably imagine a 20-24 year old borrowing tens of thousands to pay basic tuition and room and board fees.

I've personally known working adults, over 30, with children, who've been more "creative" and borrowed hundreds of thousands in student loans to supplement their incomes and pay for adult living expenses. Ideally, one would work towards "loan forgiveness" options so you don't have to pay back the principal.

I don't know the featured family. But I'd be curious how prevalent student loan abuse is and how easy it is for "financially creative" types to get very large student loans and then get them forgiven.

$60k tuition + $30k living expenses x 3 years of law school adds up pretty quickly and accrues interest pretty quickly too if you can’t afford to pay off this massive balance shortly after graduation. The only abuse is being meted out by the banks/schools/government.

See also the WSJ reporting that only 1% of government employees who applied had their loans forgiven (864 out of 73,000). Non-government employees have to pay their loans for 20 or 25 years depending on the program, so no one is even eligible yet. There is no scam here, just misery.

There is no scam here, just misery.

I cheer for human happiness and mourn for human misery. Human misery is inevitable but regrettable.

That said, people probably shouldn't take out giant amounts of loans. While all people deserve sympathy, I don't think student debt is necessarily deserving of more sympathy than any other kind of debt.

The cited family does have admirable views regarding their teenager; Starting at affordable community college, aiming to complete school without debt, and judging college based on expected financial return.

"There is no scam here, just misery."

Why is having to pay back the money that you borrow debt misery? Odds are they will still Net far more money than your average low skilled person working in retail. Why should society help them out with more resources than anyone else?

Better educated in nonsense subjects. They are vessels of leftist propaganda, not useful knowledge and skills.

This is the most emo comment board MR has ever assembled. Strong confirmation of what any millennial in a multigenerational workplace already knows: boomers and gen xers have melted their brains and deserve to be retired from public discourse.

I'm curious whether some of this could be explained by rent prices / choosing to live in expensive cities.

This explains Roissy's perspective on dating markets.

"Gen X men ... earned 18% more than their millennial counterparts, ... Among women, incomes were 12% higher for Gen Xers [controlling for age, education, and work status]."

D.C. combines high income with a vanishing gender pay gap. This makes it hard for men to become financial "alpha's" and buy love. So D.C. men learned "game" to attract women by lifting weights, dressing better, and using pickup lines.

Everyone should actually lift weights.

Most of the boomer generation lives with their single family home as their vehicle for wealth, and they've successfully skewed laws (local to national) to protect that.

That works fine for one generation, screw the next, and that's what we are seeing.

A better society would have had cheap housing and effective (public or private!) old age security.

Table 4 says millennials have less home ownership (by far) than previous generations. Table 7 says they pay a larger share on housing. That's what I'm talking about.

Are there just more families earning higher incomes? Basically in 2016 were there fewer families at the bottom, relative to 2001 and 1989, because many had risen up to $92,000 bucket?

Look at Table 1 and 2 in the linked paper. Table 1 shows inflation-adjusted average household incomes in comparable years for each generation. The differences are small and in various directions (e.g. Millennials marrieds have slightly higher incomes that Gen-X or Boomer marrieds). Table 2 shows a regression fit to inflation-adjusted incomes controlled for factors such as education and race. Now the differences are stark and significant (e.g. Boomer male income 30% higher).

My basic take is that Millennials on aggregate aren't doing worse. But they are doing significantly worse than they expected given their education and whiteness.

Makes sense to me, but shouldn'r "education" be in sarcastic quotation marks?

OK, I'll mention the unmentionable. This is a safe space for free speech.

The millennial generation contains a much larger fraction of minorities and recent immigrants than other generations. For whatever reason, minorities and recent immigrants make less money than white people. I wish it weren't so, but that's the reality.

All that plus starting work at a later age, the Great Recession, etc.

He said from his house purchased in the 80's for less that $100 grand?

Get over yourself. If starter homes were an actual thing, in the cities where these kids find jobs, they'd have wealth.

It would help too if they paid 80s tuition.

Houses are not a good way to build wealth (if you live in them). They're actually very bad investments for most people

That may be true, but I was talking about what people do.

Big mortgage first, 401k second or not at all.

Actually, Larry purchased his home in 2017 for $6.995 million.

That's besides the point though. Larry is wrong and prejudiced to say that Millennials are poorer because the immigrant and minority proportion of the generation is higher. We know this because the paper tells us that Gen X is significantly different than the "Greatest" Generation demographically, but still doing well financially. The demographic difference between Gen X and Millennials is not significant, yet Millennials are accumulating much less wealth and earning lower incomes. Also, relative to previous cohorts of white, middle class men, Millennials are doing worse than they could have been expected to in terms of wealth formation and income.

This issue, as Anon said above, is that the GFC crippled lifetime earnings for those who entered the job market from 2008-2012, while incurring a huge asset bubble to bail out the bad investments banks made. If you had real assets after the bail out you got filthy rich or at least increased your net worth. QE has been very good to property speculators. Millennials, except those from wealthy families, didn't have enough net worth to buy in before asset prices exploded and are now too late to the game.

The millennials are not paying for all that boomer debt. The Federal interest charges alone will be near 4% of their salary, it is not gonna get paid.

Let's assume millennials are choosing the same mix of majors as gen-xers and boommers, so we can compare their educational attainment with that of the previous generations.

Let's assume their wages are indeed lower and that we've controlled for everything.

A millenial today has a supercomputer in his pocket. A supercomputer he replaces every few years. Not. A. Single. Boomer had a supercomputer that they'd replace every few years. It would have cost a million a year. Which boomer or gen-xer had their own driver that would show up when they called? Which of them had a personal shopper that would do their groceries?

Are these million-dollar a year bonus les the millenials take for granted as an everyday thing accounted for when comparing wages from 2019 to wages from 1989? If not, why not? Add that in and rerun your regressions. You won't have to control for jack, since this technology miracle will overwhelm everything else.

"Are these million-dollar a year bonus les [sic] the millenials [sic] take for granted as an everyday thing accounted for when comparing wages from 2019 to wages from 1989? If not, why not?"

No, because the most important things in life are more expensive than ever (health, housing and education). Smartphones are great, and I'm glad to have access to so much information at all times, but I'd trade my smart phone in a second for:
- a nice 3br/3bath home in a city with good public transit and jobs
- lifetime no-frills healthcare
- all the money my family spent on 21 years of k-12 school, college and grad school

In fact, my quality of life would likely increase without a smart phone, although I would miss it. We are trapped in a new communication equilibrium where constant contact is expected, even if it's a tax on concentration and happiness. The real world still happens in physical space, and the happiest people I know are rooted in the physical world.

Are healthcare and education comparable between these time periods? I know housing isn't--I own a house built in the 1970s and am in the process of upgrading it, so I can tell you from personal experience the advancements made in that field. Yes, total cost is more these days, but what you get for that cost is greater than what the cost difference alone can account for. A modern water heater is not your grandfather's water heater. Even toilets have changed significantly--one toilet in our house is an original model, one a new one. Guess which one works better and more efficiently?

I know from experiences with broken bones that diagnostic medicine has changed, and several of my sisters have undergone surgeries that were not possible even ten years ago (robotic and remote surgeries, for example). So I'm inclined to think that we at least need to be cautious in comparing medical care costs across time.

Education is one area where the increased cost has not been associated with increased technology. Cost disease is pretty much the only factor here--layers and layers of administration.

It's as if all the changes in the last 50 years were designed to transfer wealth, power, and status from the core of traditional American men to hyper-educated elites, middle class women, and favored minorities. With a few Iphones and tvs thrown in to placate the rubes.

50 years ago are you sure 'traditional American men' had so much more wealth, power, and status than the elites of 1969?

It's true that women and minorities are treated with more respect now.

Who knew “free” birth control and breast pumps would cost so much?

If you think health care is expensive now, wait until you see what it costs when it's free.”

― P.J. O'Rourke

Obamacare was an arrow aimed for the middle class. Millennials voted for it. You got your benefit.

The ACA did not tax the middle class or alter the usual middle class arrangement of employer-provided health insurance. Stop making false statements.

A whole ZMP generation? Who would have thought.

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