The stubborn unwillingness of millennials to buy cars and houses and save for pensions may reflect a shifting consciousness about material culture, but can also be attributed to the undeniable fact that young people have no money.
As Derek Thompson pointed out a year ago in The Atlantic, gains from the "recovery" since the crash have been extremely lopsided: almost all of that money has gone to rich people, with some trickle-down to older middle-class workers. For workers aged 18-24, wages have steadily decreased in real terms.
The fact that young people have no money to spend on cars and houses and pensions doesn't mean that they're not reconsidering their relationship with those staples of the American Dream, but it does explain why that reconsideration is taking place.
First: Why are real wages falling across so many fields for young workers? The Great Recession devastated demand for hotels, amusement parks, and many restaurants, which explains the collapse in pay across those industries. As the ranks of young unemployed and underemployed Millennials pile up, companies around the country know they can attract applicants without raising starter wages.
But there's something deeper, too. The familiar bash brothers of globalization and technology (particularly information technology) have conspired to gut middle-class jobs by sending work abroad or replacing it with automation and software. A 2013 study by David Autor, David Dorn, and Gordon Hanson found that although the computerization of certain tasks hasn't reduced employment, it has reduced the number of decent-paying, routine-heavy jobs. Cheaper jobs have replaced them, and overall pay has declined.
The Incredible Shrinking Incomes of Young Americans
[Derek Thompson/The Atlantic]
(via Naked Capitalism)
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