If you are a Millennial who graduated around the great depression of 2008, chances are your life went totally different than you expected.
Millennials are being left out of the world’s middle class, research says
As wealth inequality increases with each generation the Middle class is actually shrinking with a declining labor pool. Part time and temporary work masks this with “low” unemployment levels.
Nearly half of indebted millennials say college wasn’t worth it, and the most educated generations in history like Millennials and Gen Z, might end up experiencing being more poor than their parents on average.
In rich countries, the middle class is getting smaller and smaller, generation by generation and it’s a dangerous sign for the future of Capitalism as we know it.
Millennials are being squeezed out of the world’s middle class as incomes stagnate and costs rise, according to research by the Organization for Economic Co-operation and Development (OECD).
It’s not just your imagination, it’s really happening. College tuition and student-loan debt are higher than ever — the cost of college has made a degree less advantageous over time. As wealth inequality accelerates due in part to monopolistic companies and corporate interests, the financial health of entire generations is in jeopardy.
Nearly half of indebted millennials think college wasn’t worth taking out student loans, according to an INSIDER and Morning Consult survey.
Why is this scary? Because it’s getting worse with each generation.
Across Western Europe and North America, the middle class is shrinking, according to a new report by the OECD. With each new generation, a smaller share of the population find themselves earning middle incomes.
With more “disruptive” technologies on the way in the 4th industrial revolution, this will actually accelerate wealth gaps and magnify the power and influence of the 1%.
For millennials who said college was definitely or probably worth it, there were more respondents who had previously paid off their student loans entirely (64%) than those who are still paying off student loans (48%). I’m turning 40 in May, I’m still paying off my student loans. I graduated in 2009.
In short, those who are paying off their debt seem to feel worse about their decision to go to college, while those who have already paid off their debt feel better about having gone to college. It’s not just a financial drag, it’s a psychological and self-esteem thing. It’s about not being even able to afford the next stages in life. It’s about putting your life on hold and feeling stuck (indefinitely).
If you compare from the time of Baby Boomers to GenZ, you notice this pattern. When the Baby Boomers, who were born between 1943 and 1964, were in their twenties, some 68% were in middle-income households.
Only 60% of Millennials & GenZ , who were born between 1983 and 2002, could say the same at a similar time in their lives.
The correlation of wealth and ethnicity in the U.S. is just very disturbing. The poverty rates of Single Mothers. And, what that means for their children’s future.
The OECD defines the middle class as people earning between 75% and 200% of the national median annual income. Its data is an average of results from Canada, Denmark, Finland, France, the United Kingdom, Ireland, Italy, Luxembourg, Mexico, the Netherlands, Norway, Spain, Sweden, and the United States.
- Less Gen X were Middle Class than Baby Boomers
- Less Millennials are Middle Class than Gen X
- Less Gen Z will be Middle Class than Millennials.
This is maybe the most disturbing thing about America and Europe in general. We are worse off than our parents, and even our grandparents. And you want us to trust things like the Government, big banking and big technology firms?
When housing and higher education squeezes you, you cannot prosper. There is no dream if you are stuck with rising debt to income levels.
Housing costs are squeezing the middle class the hardest; this now consumes a third of disposable income for middle-class households, up from a quarter in the 1990s. Housing and higher education expenses have been rising faster than middle incomes, the OECD said.
Economic Uncertainty Will Only Increase
Intergenerational inequality is not really something that’s mainstream knowledge. This is because the Government and institutions are usually run by older people, they aren’t personally affected by it.
We know that social mobility is declining just as young people saddled with debt is increasing. It’s increasingly a system of economic slavery where aging populations will be expensive for society in ballooning healthcare costs. The system is clearly not working for most people.
Research led by Harvard’s Raj Chetty has shown that social mobility is declining, as fewer children earn more than their parents.
Even the ultra-rich are saying Capitalism isn’t working. That is, the modern version of capitalism isn’t working, according to some of the country’s richest people. Higher taxes for the ultra rich and corporations are a big topic of the economy for the 2020 presidential elections. Though it’s hard to see anything substantial will come of it.
The widening income inequality and under-investment in public education in America is likely the decline of the United States as a superpower. It’s eroding the quality of life of Americans. Skill-gaps are forming in the economy, that will in part help to accelerate things like automation. Economic uncertainy is building, things are shifting.
You can read the report by the OECD here. It’s called Under Pressure: The Squeezed Middle Class, and was published on April 10th, 2019.
Middle-class households feel left behind and have questioned the benefits of economic globalisation.
In some ways, certain aspects of globalization have felt like a ponzi-scheme that benefit the ultra rich and major corporations. Meanwhile, people have been left behind.
There’s an economic parody and dysfunction here. The costs of some goods and services such as housing, which are essential for a middle-class lifestyle, have risen faster than earnings and overall inflation. That is, as wealth inequality accelerates, the mechanisms of capitalism begin to fall apart. That’s the greatest danger of the 21st century, perhaps even more serious to humanity short-term than global warming.
Democratic presidential hopefuls Elizabeth Warren and Bernie Sanders are campaigning on higher taxes on the wealthy, and some left-leaning policies are sparking a renewed debate over socialism vs. capitalism. However they don’t address our system of exploitation that favors corporations over people, and the lack of regulation in how they operate behind just the will of shareholders or power-politics of board rooms.
There is a major disconnect. Young people can feel it, most people living in capitalism, not so much. It is the American construct of “reality” after all. They think it’s normal to compete, strive and fail in the pursuit of justice, equality, liberty and the American Dream. Yes, we are failing. But it’s not necessarily your fault.