Apparently, learned academics and economists have been whirling in place trying to figure out why the Millennials are not the raging consumers that their parents and grandparents were. They’ve been focusing on the consequences of the failure to financially support the industries that still provide so many jobs in the US. The Fed has (finally) looked at the situation from the end other of the transactions and concluded (TADA, TADA!!!) that young people aren’t stiffing the economy — they literally don’t have the cash to spend.
Among the people I know, the largest influence for most is the crushing burden of student debt. Yes, the lucky few have parents who left them debt-free after college. Others managed to reach that state by going to less expensive schools and taking longer, but the norm is that most income that would otherwise be discretionary is going to loan payments.
Despite the touting by some of the income gains of the wealthy, most young people have also had problems in recent years finding employment that suits their hard-won education but are instead working at service jobs. The magic of compounding means, unfortunately, that lower income jobs at the beginning of their time spent working will mean a lower lifetime income.
The wealth transfer that benefitted baby boomers as their parents and grandparents died is essentially invisible for the Millennials as the older segment of the population is living for far longer than ever anticipated.
With all of these forces preventing young people from earning the gross income or having disposable net income, it’s a miracle (to me) that so few have moved back home and that they manage to spend what they do. The article is worth reading.