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Cost of tuition continually grows, most graduates are not falling into extremely lucrative salaries and average salaries are not keeping up with inflation. This

Cost of tuition continually grows, most graduates are not falling into extremely lucrative salaries and average salaries are not keeping up with inflation. This is far from surprising but is very concerning. Another avenue to pursue this discussion from is the % of income allocated to retirement savings. I have a sneaky suspicious most of my peers are saving less for retirement than the same demographic 10, 20, 30 years ago. What happens in a few decades when all these adults who lived with their parents and hardly saved for retirement due to lower salaries and student loans are too old to work? It seems our tax dollars will be supporting them and this looks like a big problem. Curious what others think or if I am looking at this problem from the wrong perspective.

malandrew 10y ago
The problem already goes beyond millennials. Increasing automation is going to make unskilled labor a huge liability for countries. This is one reason I don't think some of the anti-immigrant position of many Americans (and Europeans) is unwarranted. Every country should want highly skilled labor to help improve their current account, but unskilled labor is huge future liability. There is already a huge surplus of domestic unskilled labor in developed countries. Allowing unskilled labor to increase through immigration is only going to exacerbate the problem.
- maxerickson 10y ago
  If there's literally no work to do, you can meet the material demands of the problem by turning more machines on. (meanwhile lots of the US runs on cheap labor)
  - jquery 10y ago
    There is work to do, though. Doctors, lawyers, engineering, etc. Lots of work for skilled labor. You can't just "turn on more machines" to placate unemployed unskilled labor.
    - astronautjones 10y ago
      What if the majority of people can't afford doctors or lawyers?
      - jiaweihli 10y ago
        Then many of the doctors/lawyers burdened with extreme student debt and unable to find work will put pressure on the insurance companies and ultimately charge lower prices. That's likely decades out though.
  - praptak 10y ago
    The machines have owners. How do you make them give away whatever they produce?
    - beachstartup 10y ago
      through legislation, i.e. the recent push toward universal basic income. personally i think in today's world in which 0.1% owns pretty much everything or at least controls ownership of everything, it's an unavoidable eventuality, but it's not going to be an easy process of getting there.
    - ArkyBeagle 10y ago
      They may have to. If there is no money to buy these things, then they'll be back living at home, too.
      - pdimitar 10y ago
        Don't be naive. Governments and corporations will just devise laws that you HAVE TO buy these goods. How do you muster the money is, and always will be, your problem. They'll find a way to make money, don't you worry about that at all. They'll sooner make you owe money by the mere fact you're born than to give up.
- astronautjones 10y ago
  This will become a global problem about as quickly as it becomes a national problem.
- crdoconnor 10y ago
  Immigrants, boomers and technology are convenient scapegoats for declining wealth. Technology is particularly favored in the media because it sounds vaguely plausible if you don't look too closely and being anti-technology makes you look ridiculous. The 0.1% and their media naturally aren't going to blame themselves, or their trade agreements, or their lobbyists, or their wall street.
  - lucker 10y ago
    I wonder what the math is on the 0.1%'s money. If the 0.1% became significantly more generous with their money, how much would that actually benefit everyone else?
    - crdoconnor 10y ago
      https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/ https://www.scientificamerican.com/article/economic-inequali...
      - pflanze 10y ago
        When that article laid out that it was talking about a survey I sat down and thought about what kind of distribution there likely is. My first guess was: f(x) = 500 / (1-x) where x is 0..1 (excl. 1), 0 being the poorest person and the one right before 1 the richest. This yields 88.8% being owned by the richest 20% when using 1mio slices (the only reason I'm not trying to integrate symbolically is that I'm too lazy to try to revive my college math skills). This is strikingly close to the 84% that the article claims is reality. So, what's wrong with this then now? The journalist writes that it "should" be different but doesn't provide for an explanation that says why the distribution should be following a different mathematical formula (and which). Who is being stupid here, me or the journalist?
        crdoconnor 10y ago
        >So, what's wrong with this then now? If you think that having wealth should be rewarded more than creating wealth then nothing I guess. Geometrically increasing wealth is caused by the "compound interest effect" where wealth begets wealth. In other words, it's a signal that creating wealth is steadily diminishing in importance while owning it is increasing in importance.
- tkyjonathan 10y ago
  Sorry, but I am not sure I understand. Automation is in things like factories, back offices.. Those things are not entirely unskilled. While you still have plenty of unskilled labour jobs in services/food/entertainment and they haven't yet invented robots to pick strawberries - which in the UK is something we use season immigrants for.
  - varjag 10y ago
    In a bizarre recent trend, people are starting to call anyone without college education 'unskilled'. A decent toolroom machinist required more training and did more mentally challenging work than many office workers with 'soft' college degrees. These are indeed the kind of jobs that were lost to automation. Truly unskilled labor was replaced not by robots but by cheaper unskilled labor of other people.
- witty_username 10y ago
  That's only because of the welfare system. Otherwise there is no harm to others because a person with unskilled labour gets paid less over time (they're coming to America and Europe because the wages are better). And it is still probably better for that person than staying in their previous country.
- tomjen3 10y ago
  There is potentially giant market for unskilled labour. From an economic perspective it makes no sense to have an engineer clean his own toilet, wash his own windows or cook her own dinner. That does require us to overhaul the tax system so that income isn't taxed twice when it is paid directly from one person to another.
jackcosgrove 10y ago
Your sneaking suspicion is correct for baby boomers and gen X: http://www.pewtrusts.org/en/about/news-room/press-releases/2014/09/18/pew-finds-generation-x-facing-an-insecure-financial-future http://www.pewtrusts.org/en/about/news-room/press-releases/2.... "Gen Xers have less wealth and six times more debt than their parents did at the same age," despite having higher salaries. I think you're right to be concerned. Not being able to strike out on your own delays family formation, which leads to some attrition of people who never have children for financial reasons. This decreases the birthrate and then on top of the working generation supporting members within its own cohort, they also have to support an older generation of retirees with an ever rising dependency ratio. It's a negative feedback loop that countries like Japan, Germany, and Italy are stuck in. Both the education and housing problems can be solved. Education can be automated and amateurized using technology, and more housing can be built. Both of these would do a lot to decrease youth debt loads. Medical price inflation is the tougher problem but is less pressing for young people. Eventually we will be old though and then it will hit like a ton of bricks for those unlucky enough to have not accumulated wealth.
- ap22213 10y ago
  This was surprising: "Among Gen Xers who have exceeded their parents’ income, those with college degrees are less likely to surpass their parents’ wealth, mostly due to student loan debt."
  - ryandrake 10y ago
    Gen X here, just turned 40. If you compare how I'm doing with how my parents (who were solidly middle class) were doing, it's not even close. At 40, they had multiple homes, were secure in their savings and retirement through generous pensions, and practically debt free. This was on school teachers' salaries! Me? Student loan debt set me back years, crippling housing costs, and a crappy 401(k) that is probably worth around what I put into it due to multiple deep recessions during my prime working years. I can't even begin to imagine how bad it is for you under-30s! This is not sustainable. All the value captured through productivity increases is being captured by shareholders and asset owners now rather than the working class.
pjdemers 10y ago
By the time the young adults of today are too old to work, they will have long since inherited their parent's house. I would bet in 25 years when 10,000 baby boomers are dying every day, housing prices will be in free fall. So many of today's young adults will pay little, if anything, for the house they retire in.
- ryandrake 10y ago
  Thanks to reverse mortgages, I doubt there will be a massive housing transfer when the boomers die out. Boomers in general will outlive their retirement savings and all that will be left is their home equity. We'll see tons of bank-owned homes but today's young adults still won't be able to afford them.
  - shostack 10y ago
    And I wonder if they will be sold by banks or merely rented out and packaged as collateralized investments.
    - afarrell 10y ago
      They will probably be sold to rental management companies (of which there will be a whole bunch) or like liquid-property-investment startups like https://bricklane.com/ https://bricklane.com/
      - resolaibohp 10y ago
        This will be a bigger problem in the near future. I keep seeing advertisements for property investments along the lines of the company you linked. Everyone thinks that housing is an investment and a way to make money. This has and will continue to drive up prices.
        afarrell 10y ago
        Why would it drive up rents? If people invest in properties to then let/rent them out, then there will be more homes on the rental market. The thing that will prevent this is if there are laws preventing new construction? The thing that prevents new construction in many areas is laws designed to "preserve the character of the neighborhood". Homeowners/investors have an incentive to push for these laws to keep housing prices high. However, if they actually own a diversified asset that can grow with new construction by adding new properties, then that incentive is reduced.
r00fus 10y ago
> What happens in a few decades when all these adults who lived with their parents and hardly saved for retirement due to lower salaries and student loans are too old to work? Simple - they die early... barring a massive electoral shift in governance priorities.
ArkyBeagle 10y ago
I'm curious why anyone thinks it's a big problem. SSI and SNAP have really high velocity. For one thing, velocity is a good thing on its own. For another, they're both composed of everybody's favorite convenient social fiction - money. The both run around 5% of GDP. So say that doubles. People not working is only actually a problem if the overall economy experiences something akin to opportunity loss from them not doing anything. The map is not the territory and the books are not the company.
- jackcosgrove 10y ago
  I am listening to this book now called "The Dictator's Handbook". One of the arguments is that as more people become economically productive, the level of autocracy in a society decreases because it is in governments' interest to liberate productive people to generate wealth. So a society in which many people are unproductive is also a society more liable to become a dictatorship.

malandrew 10y ago

The problem already goes beyond millennials. Increasing automation is going to make unskilled labor a huge liability for countries. This is one reason I don't think some of the anti-immigrant position of many Americans (and Europeans) is unwarranted. Every country should want highly skilled labor to help improve their current account, but unskilled labor is huge future liability. There is already a huge surplus of domestic unskilled labor in developed countries. Allowing unskilled labor to increase through immigration is only going to exacerbate the problem.

maxerickson 10y ago
If there's literally no work to do, you can meet the material demands of the problem by turning more machines on. (meanwhile lots of the US runs on cheap labor)
- jquery 10y ago
  There is work to do, though. Doctors, lawyers, engineering, etc. Lots of work for skilled labor. You can't just "turn on more machines" to placate unemployed unskilled labor.
  - astronautjones 10y ago
    What if the majority of people can't afford doctors or lawyers?
    - jiaweihli 10y ago
      Then many of the doctors/lawyers burdened with extreme student debt and unable to find work will put pressure on the insurance companies and ultimately charge lower prices. That's likely decades out though.
- praptak 10y ago
  The machines have owners. How do you make them give away whatever they produce?
  - beachstartup 10y ago
    through legislation, i.e. the recent push toward universal basic income. personally i think in today's world in which 0.1% owns pretty much everything or at least controls ownership of everything, it's an unavoidable eventuality, but it's not going to be an easy process of getting there.
  - ArkyBeagle 10y ago
    They may have to. If there is no money to buy these things, then they'll be back living at home, too.
    - pdimitar 10y ago
      Don't be naive. Governments and corporations will just devise laws that you HAVE TO buy these goods. How do you muster the money is, and always will be, your problem. They'll find a way to make money, don't you worry about that at all. They'll sooner make you owe money by the mere fact you're born than to give up.
astronautjones 10y ago
This will become a global problem about as quickly as it becomes a national problem.
crdoconnor 10y ago
Immigrants, boomers and technology are convenient scapegoats for declining wealth. Technology is particularly favored in the media because it sounds vaguely plausible if you don't look too closely and being anti-technology makes you look ridiculous. The 0.1% and their media naturally aren't going to blame themselves, or their trade agreements, or their lobbyists, or their wall street.
- lucker 10y ago
  I wonder what the math is on the 0.1%'s money. If the 0.1% became significantly more generous with their money, how much would that actually benefit everyone else?
  - crdoconnor 10y ago
    https://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/ https://www.scientificamerican.com/article/economic-inequali...
    - pflanze 10y ago
      When that article laid out that it was talking about a survey I sat down and thought about what kind of distribution there likely is. My first guess was: f(x) = 500 / (1-x) where x is 0..1 (excl. 1), 0 being the poorest person and the one right before 1 the richest. This yields 88.8% being owned by the richest 20% when using 1mio slices (the only reason I'm not trying to integrate symbolically is that I'm too lazy to try to revive my college math skills). This is strikingly close to the 84% that the article claims is reality. So, what's wrong with this then now? The journalist writes that it "should" be different but doesn't provide for an explanation that says why the distribution should be following a different mathematical formula (and which). Who is being stupid here, me or the journalist?
      - crdoconnor 10y ago
        >So, what's wrong with this then now? If you think that having wealth should be rewarded more than creating wealth then nothing I guess. Geometrically increasing wealth is caused by the "compound interest effect" where wealth begets wealth. In other words, it's a signal that creating wealth is steadily diminishing in importance while owning it is increasing in importance.
tkyjonathan 10y ago
Sorry, but I am not sure I understand. Automation is in things like factories, back offices.. Those things are not entirely unskilled. While you still have plenty of unskilled labour jobs in services/food/entertainment and they haven't yet invented robots to pick strawberries - which in the UK is something we use season immigrants for.
- varjag 10y ago
  In a bizarre recent trend, people are starting to call anyone without college education 'unskilled'. A decent toolroom machinist required more training and did more mentally challenging work than many office workers with 'soft' college degrees. These are indeed the kind of jobs that were lost to automation. Truly unskilled labor was replaced not by robots but by cheaper unskilled labor of other people.
witty_username 10y ago
That's only because of the welfare system. Otherwise there is no harm to others because a person with unskilled labour gets paid less over time (they're coming to America and Europe because the wages are better). And it is still probably better for that person than staying in their previous country.
tomjen3 10y ago
There is potentially giant market for unskilled labour. From an economic perspective it makes no sense to have an engineer clean his own toilet, wash his own windows or cook her own dinner. That does require us to overhaul the tax system so that income isn't taxed twice when it is paid directly from one person to another.

jackcosgrove 10y ago

Your sneaking suspicion is correct for baby boomers and gen X: http://www.pewtrusts.org/en/about/news-room/press-releases/2014/09/18/pew-finds-generation-x-facing-an-insecure-financial-future http://www.pewtrusts.org/en/about/news-room/press-releases/2.... "Gen Xers have less wealth and six times more debt than their parents did at the same age," despite having higher salaries. I think you're right to be concerned. Not being able to strike out on your own delays family formation, which leads to some attrition of people who never have children for financial reasons. This decreases the birthrate and then on top of the working generation supporting members within its own cohort, they also have to support an older generation of retirees with an ever rising dependency ratio. It's a negative feedback loop that countries like Japan, Germany, and Italy are stuck in. Both the education and housing problems can be solved. Education can be automated and amateurized using technology, and more housing can be built. Both of these would do a lot to decrease youth debt loads. Medical price inflation is the tougher problem but is less pressing for young people. Eventually we will be old though and then it will hit like a ton of bricks for those unlucky enough to have not accumulated wealth.

ap22213 10y ago
This was surprising: "Among Gen Xers who have exceeded their parents’ income, those with college degrees are less likely to surpass their parents’ wealth, mostly due to student loan debt."
- ryandrake 10y ago
  Gen X here, just turned 40. If you compare how I'm doing with how my parents (who were solidly middle class) were doing, it's not even close. At 40, they had multiple homes, were secure in their savings and retirement through generous pensions, and practically debt free. This was on school teachers' salaries! Me? Student loan debt set me back years, crippling housing costs, and a crappy 401(k) that is probably worth around what I put into it due to multiple deep recessions during my prime working years. I can't even begin to imagine how bad it is for you under-30s! This is not sustainable. All the value captured through productivity increases is being captured by shareholders and asset owners now rather than the working class.

pjdemers 10y ago

By the time the young adults of today are too old to work, they will have long since inherited their parent's house. I would bet in 25 years when 10,000 baby boomers are dying every day, housing prices will be in free fall. So many of today's young adults will pay little, if anything, for the house they retire in.

ryandrake 10y ago
Thanks to reverse mortgages, I doubt there will be a massive housing transfer when the boomers die out. Boomers in general will outlive their retirement savings and all that will be left is their home equity. We'll see tons of bank-owned homes but today's young adults still won't be able to afford them.
- shostack 10y ago
  And I wonder if they will be sold by banks or merely rented out and packaged as collateralized investments.
  - afarrell 10y ago
    They will probably be sold to rental management companies (of which there will be a whole bunch) or like liquid-property-investment startups like https://bricklane.com/ https://bricklane.com/
    - resolaibohp 10y ago
      This will be a bigger problem in the near future. I keep seeing advertisements for property investments along the lines of the company you linked. Everyone thinks that housing is an investment and a way to make money. This has and will continue to drive up prices.
      - afarrell 10y ago
        Why would it drive up rents? If people invest in properties to then let/rent them out, then there will be more homes on the rental market. The thing that will prevent this is if there are laws preventing new construction? The thing that prevents new construction in many areas is laws designed to "preserve the character of the neighborhood". Homeowners/investors have an incentive to push for these laws to keep housing prices high. However, if they actually own a diversified asset that can grow with new construction by adding new properties, then that incentive is reduced.

r00fus 10y ago

> What happens in a few decades when all these adults who lived with their parents and hardly saved for retirement due to lower salaries and student loans are too old to work? Simple - they die early... barring a massive electoral shift in governance priorities.

ArkyBeagle 10y ago

I'm curious why anyone thinks it's a big problem. SSI and SNAP have really high velocity. For one thing, velocity is a good thing on its own. For another, they're both composed of everybody's favorite convenient social fiction - money. The both run around 5% of GDP. So say that doubles. People not working is only actually a problem if the overall economy experiences something akin to opportunity loss from them not doing anything. The map is not the territory and the books are not the company.

jackcosgrove 10y ago
I am listening to this book now called "The Dictator's Handbook". One of the arguments is that as more people become economically productive, the level of autocracy in a society decreases because it is in governments' interest to liberate productive people to generate wealth. So a society in which many people are unproductive is also a society more liable to become a dictatorship.