7 ms·

> The US is out of demand How is the US out of demand? Peak consumption years of population are between twenties and fifties and the biggest cohort of US demog

by npalli 11y ago

> The US is out of demand How is the US out of demand? Peak consumption years of population are between twenties and fifties and the biggest cohort of US demographics - the millennials - is just getting started. They crossed over the Boomers last year and now are the largest group. Behind them the younger (Gen Z) equally large in size is ready to backfill in another 15 years. It is true that demand from Boomers is done, but the Gen X's are not big enough to backfill the falling demand.

markdown 11y ago
And what good is a large population of people in their peak consumption years if they have no money with which to consume? So long as you have a low-paid workforce who have to save their money (either themselves or via insurance companies) in case they get an infected tooth or need to see a doctor for an antibiotic prescription, you'll have low consumption spending and low growth.
- seiji 11y ago
  even medium to highly paid workforce members aren't entirely capable of spending en masse these days. I'd love to stop paying $3500/month in rent, but any property to buy around here has a median price of $1.2 million. Unless we all move to rural Indiana, housing + healthcare is designed to eat 100% of your after-tax income with no room for further growth. (of course, that's assuming you're just a putz serial employee like myself and not a wise investor who can share the success of 1,000 companies at once without having to do any real work yourself.)
  - edabobojr 11y ago
    There is a lot of middle ground between the valley and rural Indiana. Depending on how you drove to get there, the northern route would take you through Salt Lake City, just north of Denver, Omaha, Des Moines, and just south of Chicago. A southern route would take you north of Phoenix, Albuquerque, Oklahoma City, just east of St. Louis, and possibly through Indianapolis. I would bet every one of those cities would have multiple opportunities for medium-highly paid workforce members while also providing affordable housing.
  - dsp1234 11y ago
    In Portland, OR, my healthcare is 4% and my 2k+ house in the burbs (30 min commute) is <20%. At $3500/mo (about $750k house), there are over 500 house available right now[0] just in the actual city of Portland (not including suburbs). And that's just limiting it to 2bd 1.25ba (and above) detached houses (not including condos, duplexes, etc) It's totally possible to work and live somewhere other than California. [0] - https://www.redfin.com/city/30772/OR/Portland/filter#!uipt=1&max_price=750000&num_beds=2&num_baths=1.25&region_id=30772&region_type=6&market=oregon https://www.redfin.com/city/30772/OR/Portland/filter#!uipt=1...
    - jeremy_k 11y ago
      Yeah but rain. I lived in Oregon for 22 years, and I've been living in California since 2012 and although its been through a drought, let me tell you some things I don't miss after being back in Oregon for the holidays. Waking up to gray, gloomy skies, with rain pouring down. Waking up to the dark at 7am in the Winter. Sunset at 4:30. It actually gets cold haha. The summers are amazing though! You get spoiled living here and thats why people like it.
      - dsp1234 11y ago
        Totally agree
    - linkregister 11y ago
      Aren't you leaving out the most important differentiation between Portland and SF? The amount of available jobs and their salaries is vastly different in each location. One minute of searching for "software developer" on indeed.com: SF: 7,223 jobs, median $95k Portland, OR: 1,222 jobs, median $80k
      - elenorelange 11y ago
        interesting that based on his numbers the extra $15k in SF is not enough to make up for the rent. and the guy in portland has a house!
      - 11y ago
  - echelon 11y ago
    Atlanta has a great tech scene, and the housing costs are extremely affordable. I pay $900/mo rent for two bedrooms and one bathroom in the extremely popular Inman Park neighborhood. I draw the same salary that my coworkers in SF do and don't have to worry about rent, state taxes, or anything of the sort. The Atlanta food and art scenes are great. We have wonderful communities, lots of events, and the weather is pretty great.
  - softawre 11y ago
    Hey, I live in Indiana! I'm hiring a full-stack software engineer if anyone wants to get in on the 2500 sq-ft homes for 200k.
digikata 11y ago
The US is out of demand because wages for Gen X and millennials have been minimized by decades of shift in the power balance between employers & labor, on top of that, many millennials have been saddled with much higher education costs compared to Gen X and especially the Boomer generation. So even as careers progress and wages rise due to experience, some of that margin of money isn't going to disposable consumer spending, it's going to go to loan repayment. That money then spends more time circulating in the financial service sector vs other sectors where there is a greater amount of real value creation and real growth.
tedks 11y ago
>the biggest cohort of US demographics - the millennials - is just getting started As a millennial, this is hilarious to me. I hope your startup doesn't depend on millennials consuming ANYTHING. The best you can MAYBE achieve is having people disable their adblocker.
- Joof 11y ago
  Most people I know either don't have much money or have a lot and don't care to spend it.
bsder 11y ago
> Peak consumption years of population are between twenties and fifties and the biggest cohort of US demographics - the millennials - is just getting started. They have no money to spend and little to spend it on. This has a ripple effect. Many of them don't want to buy cars--Uber/Lyft allows them to dodge that (for now). Lots of them aren't getting married--this then drops spending of the household since they don't have children which sucks up vast amounts of resources. etc.
drzaiusapelord 11y ago
Genx and y are hit pretty hard between increased taxes to take care of Boomer retirement entitlements, public sector union pensions and other 1970s deals coming to roost, and significant student debt. These are expenses the previous generations didn't have to worry about. With a lower tax load and no student loan payments, my economic life would be fairly different. At least a second car, definitely more travel, nicer house, more random spending, etc. When we do hiring here I'm floored by how low entry-level salaries are for people with 4 year degrees and 1-4 years of work. Hell, we opened a coordinator level position recently and got resumes for people mid-career dying for work. I think the economic picture isn't as pretty as some stats make it out to be. x, y, and z just won't have Boomer wealth and our economy must adapt to that. Its not the end of the world, but it won't be like the Clinton years again. Also, there's a pretty rough calculation in regards to real estate prices vs income. A middle class income in the 70s got you a decent house with a reasonable percentage of your salary to pay for it. That relationship is kinda crazy now as high real estate prices have become the norm. I couldn't afford my parent's house I grew up in and I make 3 to 4x what they made. Fixed for inflation, I make easily 2x what they made.
andrewjl 11y ago
Lots of millennials are deep in debt due to student loans. Also, with jobs being more precarious, I wouldn't be surprised to see a much higher individual saving rate for the millennial cohort. This would then correspond with lower aggregate discretionary consumption.
s_kilk 11y ago
> the millennials - is just getting started... Yeah, but they're all broke and living with their parents.

by npalli 11y ago

markdown 11y ago

And what good is a large population of people in their peak consumption years if they have no money with which to consume? So long as you have a low-paid workforce who have to save their money (either themselves or via insurance companies) in case they get an infected tooth or need to see a doctor for an antibiotic prescription, you'll have low consumption spending and low growth.

seiji 11y ago
even medium to highly paid workforce members aren't entirely capable of spending en masse these days. I'd love to stop paying $3500/month in rent, but any property to buy around here has a median price of $1.2 million. Unless we all move to rural Indiana, housing + healthcare is designed to eat 100% of your after-tax income with no room for further growth. (of course, that's assuming you're just a putz serial employee like myself and not a wise investor who can share the success of 1,000 companies at once without having to do any real work yourself.)
- edabobojr 11y ago
  There is a lot of middle ground between the valley and rural Indiana. Depending on how you drove to get there, the northern route would take you through Salt Lake City, just north of Denver, Omaha, Des Moines, and just south of Chicago. A southern route would take you north of Phoenix, Albuquerque, Oklahoma City, just east of St. Louis, and possibly through Indianapolis. I would bet every one of those cities would have multiple opportunities for medium-highly paid workforce members while also providing affordable housing.
- dsp1234 11y ago
  In Portland, OR, my healthcare is 4% and my 2k+ house in the burbs (30 min commute) is <20%. At $3500/mo (about $750k house), there are over 500 house available right now[0] just in the actual city of Portland (not including suburbs). And that's just limiting it to 2bd 1.25ba (and above) detached houses (not including condos, duplexes, etc) It's totally possible to work and live somewhere other than California. [0] - https://www.redfin.com/city/30772/OR/Portland/filter#!uipt=1&max_price=750000&num_beds=2&num_baths=1.25&region_id=30772&region_type=6&market=oregon https://www.redfin.com/city/30772/OR/Portland/filter#!uipt=1...
  - jeremy_k 11y ago
    Yeah but rain. I lived in Oregon for 22 years, and I've been living in California since 2012 and although its been through a drought, let me tell you some things I don't miss after being back in Oregon for the holidays. Waking up to gray, gloomy skies, with rain pouring down. Waking up to the dark at 7am in the Winter. Sunset at 4:30. It actually gets cold haha. The summers are amazing though! You get spoiled living here and thats why people like it.
    - dsp1234 11y ago
      Totally agree
  - linkregister 11y ago
    Aren't you leaving out the most important differentiation between Portland and SF? The amount of available jobs and their salaries is vastly different in each location. One minute of searching for "software developer" on indeed.com: SF: 7,223 jobs, median $95k Portland, OR: 1,222 jobs, median $80k
    - elenorelange 11y ago
      interesting that based on his numbers the extra $15k in SF is not enough to make up for the rent. and the guy in portland has a house!
    - 11y ago
- echelon 11y ago
  Atlanta has a great tech scene, and the housing costs are extremely affordable. I pay $900/mo rent for two bedrooms and one bathroom in the extremely popular Inman Park neighborhood. I draw the same salary that my coworkers in SF do and don't have to worry about rent, state taxes, or anything of the sort. The Atlanta food and art scenes are great. We have wonderful communities, lots of events, and the weather is pretty great.
- softawre 11y ago
  Hey, I live in Indiana! I'm hiring a full-stack software engineer if anyone wants to get in on the 2500 sq-ft homes for 200k.

digikata 11y ago

The US is out of demand because wages for Gen X and millennials have been minimized by decades of shift in the power balance between employers & labor, on top of that, many millennials have been saddled with much higher education costs compared to Gen X and especially the Boomer generation. So even as careers progress and wages rise due to experience, some of that margin of money isn't going to disposable consumer spending, it's going to go to loan repayment. That money then spends more time circulating in the financial service sector vs other sectors where there is a greater amount of real value creation and real growth.

tedks 11y ago

>the biggest cohort of US demographics - the millennials - is just getting started As a millennial, this is hilarious to me. I hope your startup doesn't depend on millennials consuming ANYTHING. The best you can MAYBE achieve is having people disable their adblocker.

Joof 11y ago
Most people I know either don't have much money or have a lot and don't care to spend it.

bsder 11y ago

> Peak consumption years of population are between twenties and fifties and the biggest cohort of US demographics - the millennials - is just getting started. They have no money to spend and little to spend it on. This has a ripple effect. Many of them don't want to buy cars--Uber/Lyft allows them to dodge that (for now). Lots of them aren't getting married--this then drops spending of the household since they don't have children which sucks up vast amounts of resources. etc.

drzaiusapelord 11y ago

Genx and y are hit pretty hard between increased taxes to take care of Boomer retirement entitlements, public sector union pensions and other 1970s deals coming to roost, and significant student debt. These are expenses the previous generations didn't have to worry about. With a lower tax load and no student loan payments, my economic life would be fairly different. At least a second car, definitely more travel, nicer house, more random spending, etc. When we do hiring here I'm floored by how low entry-level salaries are for people with 4 year degrees and 1-4 years of work. Hell, we opened a coordinator level position recently and got resumes for people mid-career dying for work. I think the economic picture isn't as pretty as some stats make it out to be. x, y, and z just won't have Boomer wealth and our economy must adapt to that. Its not the end of the world, but it won't be like the Clinton years again. Also, there's a pretty rough calculation in regards to real estate prices vs income. A middle class income in the 70s got you a decent house with a reasonable percentage of your salary to pay for it. That relationship is kinda crazy now as high real estate prices have become the norm. I couldn't afford my parent's house I grew up in and I make 3 to 4x what they made. Fixed for inflation, I make easily 2x what they made.

andrewjl 11y ago

Lots of millennials are deep in debt due to student loans. Also, with jobs being more precarious, I wouldn't be surprised to see a much higher individual saving rate for the millennial cohort. This would then correspond with lower aggregate discretionary consumption.

s_kilk 11y ago

> the millennials - is just getting started... Yeah, but they're all broke and living with their parents.