4 ms·

Millennials kill industries because they're poor: Fed report

32 points by joeyespo 8y ago

Rjevski 8y ago
Maybe millennials are just more efficient at spending the little money they have and don't want to spend more than they need to, which coupled with the new business models the Internet & recent technologies allow makes some legacy business models (cable TV, etc) unsustainable?
- tehlike 8y ago
  Most of millenial trouble can be attributed to baby boomers.
  - alehul 8y ago
    I hear this incredibly often. Can you explain why this is, or do you have a link or two that's convinced you on this point? I understand NIMBY-ism which, to some extent, is responsible for impractical zoning laws and, in turn, higher rents and home prices. Beyond that, however, why is this the case? Wasn't America just more prosperous in previous decades, due to the political/military victories we enjoyed, and the lack of international competition we faced?
    - IggleSniggle 8y ago
      I’m not sure it holds more true now than in times past, but I believe the argument generally goes that the older, richer generation has exploited the land and taken on huge amounts of debt, all while jacking up the prices of the things that gave them their advantages (education and housing brings the initial arguments in this vein). And, further, that the older generation will die before needing to address all of these various natural and societal debts, leaving the younger, poorer generation on the hook for their excesses. Edit: just want to clarify that I’m only vaguely familiar with the arguments that I am parroting here
  - tehlike 8y ago
    It is more generational, not really specific to baby boomers. Zoning laws, estate laws etc basically, things that make most assets/expenses of today expensive.
CryptoPunk 8y ago
Wealth inequality between young and old has reached record high levels: https://www.forbes.com/sites/evapereira/2011/11/08/wealth-inequality-between-young-and-old-generations-reaches-record-high/ https://www.forbes.com/sites/evapereira/2011/11/08/wealth-in... Some possible causes: zoning laws, which benefit existing homeowners at the expense of future first time home buyers, have been piled on over the last 40 years. The economy in general has become much more regulated. In the financial services industry, regulations around existing laws, like the Bank Secrecy Act, have steadily increased over the last 40 years, and several major new laws, like the Community Reinvestment Act and Dodd-Frank, have been passed. The result is regulatory compliance costs making up 10% of expenses for banks with less than $100 million in assets, versus 5% for banks with between $5 billion and $10 billion in assets: https://www.communitybanking.org/~/media/files/compliance%20costs%20economies%20of%20scale%20and%20compliance%20performance.pdf https://www.communitybanking.org/~/media/files/compliance%20... Similar trends are seen in other major industries, like healthcare. Greater burdens on small businesses means less new business creation, which we've seen: https://money.cnn.com/2016/09/08/news/economy/us-startups-near-40-year-low/index.html https://money.cnn.com/2016/09/08/news/economy/us-startups-ne... And more benefits being accrued to incumbents. The public relations efforts of entrenched parties is totally overwhelming Millenials' efforts to cope too. Millenials are supporting many of the same political trends that are locking them out of industries. For example, the recent astroturfing campaign by the hotel lobby to turn the public against Airbnb and create public support for more regulatory barriers to renting one's place on Airbnb was very successful: https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html https://www.nytimes.com/2017/04/16/technology/inside-the-hot... And Millenials make up a significant percentage of the dupes.
- stochastic_monk 8y ago
  Dodd-Frank is a very good thing. It’s not that regulation is intrinsically bad, it’s regulation that entrenches existing wealth.
  - CryptoPunk 8y ago
    I can't imagine something that destroys small business as much as Dodd-Frank being a good thing on the balance: https://www.mercatus.org/publication/how-are-small-banks-faring-under-dodd-frank https://www.mercatus.org/publication/how-are-small-banks-far... Some relevant statistics: https://www.americanbanker.com/opinion/no-there-arent-too-many-banks-in-the-us https://www.americanbanker.com/opinion/no-there-arent-too-ma... >>Community banks have been instrumental in helping the nation recover from the financial crisis and economic downturn, yet their numbers continue to dwindle, declining by roughly 1,500 since 2009. .. >>A new survey from the Federal Reserve and Conference of State Bank Supervisors found that community bank compliance costs have increased by nearly $1 billion in the past two years to roughly $5.4 billion, or 24% of community bank net income.
stuaxo 8y ago
Never ending austerity keeps people poor and shrinks markets.
- Tsubasachan 8y ago
  Austerity? America? Ha the US hasn't even TRIED to balance a budget since Clinton. No every politician has to promise deep tax cuts if he wants to get elected. Ostensibly the US economy is booming yet the deficit is at $800 million.
bauc 8y ago
Just look at the difference between https://www.populationpyramid.net/united-states-of-america/1978/ https://www.populationpyramid.net/united-states-of-america/1... and https://www.populationpyramid.net/united-states-of-america/2018/ https://www.populationpyramid.net/united-states-of-america/2... . Also look at world population change in the same period. I don't see that discussed much but when the shape of populations change (which causes how things are funded to change as well and where resources are used) society has to change too but that is a lot harder and takes a lot longer.
jammygit 8y ago
"Average real labor earnings for male household heads working full time were 18% and 27% higher for Gen Xers and baby boomers when they were young compared with millennials, the study found. For young women, the difference was smaller — 12% for Gen Xers and 24% for boomers" 12-27% seems like a huge number and I wish the article went into detail about it. Are they simply in school instead of working? Are salaries lower? Are they simply not getting jobs?
newnewpdro 8y ago
The millenials I have known (USA) are exceptionally bad at managing their finances. Anyone poor who thinks it makes sense to pay $20+ to have a Five Guys lunch delivered often enough to be on a first-name basis with the delivery guy needs their head examined.
- WWLink 8y ago
  Software engineer here. I don't know ANYONE who would do that! I do know some people who spend $20 on lunch frighteningly often, though.

32 points by joeyespo 8y ago

Maybe millennials are just more efficient at spending the little money they have and don't want to spend more than they need to, which coupled with the new business models the Internet & recent technologies allow makes some legacy business models (cable TV, etc) unsustainable?

tehlike 8y ago
Most of millenial trouble can be attributed to baby boomers.
- alehul 8y ago
  I hear this incredibly often. Can you explain why this is, or do you have a link or two that's convinced you on this point? I understand NIMBY-ism which, to some extent, is responsible for impractical zoning laws and, in turn, higher rents and home prices. Beyond that, however, why is this the case? Wasn't America just more prosperous in previous decades, due to the political/military victories we enjoyed, and the lack of international competition we faced?
  - IggleSniggle 8y ago
    I’m not sure it holds more true now than in times past, but I believe the argument generally goes that the older, richer generation has exploited the land and taken on huge amounts of debt, all while jacking up the prices of the things that gave them their advantages (education and housing brings the initial arguments in this vein). And, further, that the older generation will die before needing to address all of these various natural and societal debts, leaving the younger, poorer generation on the hook for their excesses. Edit: just want to clarify that I’m only vaguely familiar with the arguments that I am parroting here
- tehlike 8y ago
  It is more generational, not really specific to baby boomers. Zoning laws, estate laws etc basically, things that make most assets/expenses of today expensive.

CryptoPunk 8y ago

Wealth inequality between young and old has reached record high levels: https://www.forbes.com/sites/evapereira/2011/11/08/wealth-inequality-between-young-and-old-generations-reaches-record-high/ https://www.forbes.com/sites/evapereira/2011/11/08/wealth-in... Some possible causes: zoning laws, which benefit existing homeowners at the expense of future first time home buyers, have been piled on over the last 40 years. The economy in general has become much more regulated. In the financial services industry, regulations around existing laws, like the Bank Secrecy Act, have steadily increased over the last 40 years, and several major new laws, like the Community Reinvestment Act and Dodd-Frank, have been passed. The result is regulatory compliance costs making up 10% of expenses for banks with less than $100 million in assets, versus 5% for banks with between $5 billion and $10 billion in assets: https://www.communitybanking.org/~/media/files/compliance%20costs%20economies%20of%20scale%20and%20compliance%20performance.pdf https://www.communitybanking.org/~/media/files/compliance%20... Similar trends are seen in other major industries, like healthcare. Greater burdens on small businesses means less new business creation, which we've seen: https://money.cnn.com/2016/09/08/news/economy/us-startups-near-40-year-low/index.html https://money.cnn.com/2016/09/08/news/economy/us-startups-ne... And more benefits being accrued to incumbents. The public relations efforts of entrenched parties is totally overwhelming Millenials' efforts to cope too. Millenials are supporting many of the same political trends that are locking them out of industries. For example, the recent astroturfing campaign by the hotel lobby to turn the public against Airbnb and create public support for more regulatory barriers to renting one's place on Airbnb was very successful: https://www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.html https://www.nytimes.com/2017/04/16/technology/inside-the-hot... And Millenials make up a significant percentage of the dupes.

stochastic_monk 8y ago
Dodd-Frank is a very good thing. It’s not that regulation is intrinsically bad, it’s regulation that entrenches existing wealth.
- CryptoPunk 8y ago
  I can't imagine something that destroys small business as much as Dodd-Frank being a good thing on the balance: https://www.mercatus.org/publication/how-are-small-banks-faring-under-dodd-frank https://www.mercatus.org/publication/how-are-small-banks-far... Some relevant statistics: https://www.americanbanker.com/opinion/no-there-arent-too-many-banks-in-the-us https://www.americanbanker.com/opinion/no-there-arent-too-ma... >>Community banks have been instrumental in helping the nation recover from the financial crisis and economic downturn, yet their numbers continue to dwindle, declining by roughly 1,500 since 2009. .. >>A new survey from the Federal Reserve and Conference of State Bank Supervisors found that community bank compliance costs have increased by nearly $1 billion in the past two years to roughly $5.4 billion, or 24% of community bank net income.

stuaxo 8y ago

Never ending austerity keeps people poor and shrinks markets.

Tsubasachan 8y ago
Austerity? America? Ha the US hasn't even TRIED to balance a budget since Clinton. No every politician has to promise deep tax cuts if he wants to get elected. Ostensibly the US economy is booming yet the deficit is at $800 million.

bauc 8y ago

Just look at the difference between https://www.populationpyramid.net/united-states-of-america/1978/ https://www.populationpyramid.net/united-states-of-america/1... and https://www.populationpyramid.net/united-states-of-america/2018/ https://www.populationpyramid.net/united-states-of-america/2... . Also look at world population change in the same period. I don't see that discussed much but when the shape of populations change (which causes how things are funded to change as well and where resources are used) society has to change too but that is a lot harder and takes a lot longer.

jammygit 8y ago

"Average real labor earnings for male household heads working full time were 18% and 27% higher for Gen Xers and baby boomers when they were young compared with millennials, the study found. For young women, the difference was smaller — 12% for Gen Xers and 24% for boomers" 12-27% seems like a huge number and I wish the article went into detail about it. Are they simply in school instead of working? Are salaries lower? Are they simply not getting jobs?

newnewpdro 8y ago

The millenials I have known (USA) are exceptionally bad at managing their finances. Anyone poor who thinks it makes sense to pay $20+ to have a Five Guys lunch delivered often enough to be on a first-name basis with the delivery guy needs their head examined.

WWLink 8y ago
Software engineer here. I don't know ANYONE who would do that! I do know some people who spend $20 on lunch frighteningly often, though.