NEWSWIRE: 8/6/18
- Nearly three-quarters (68%) of Millennial homeowners report feeling buyer’s remorse. The biggest sources of regret are financial (overspending on the down payment and underestimating living expenses), but FOMO also factors in for this risk-averse generation. (Bank of the West)
- NH: The survey shows that Millennials are as likely as older generations to believe in the American Dream and almost as likely to say that "owning a home" is part of that dream. (They are also more likely than Boomers to include "having children" as part of the dream and more likely than all older generations to include "marriage" as part of the dream.) So why the post-purchase regret? Apparently, affordability is pushing many Millennial buyers to borrow from or cash out their retirement savings in order to make the down payment--or to buy fixer-uppers that require more work and/or skills to fix up than they initially imagined. Either way, they worry they did not make the right choice.
- Pew Research Center reports that Xers are the only generation to have regained the net worth lost during the Great Recession. Because this analysis tracks generations rather than age brackets, it misses the point that the median net worth of a typical 35- to 54-year-old today is barely half of what it was in 2007. (Pew Research Center)
- NH: Agreed: This Pew analyst concludes on a perversely complacent note. By any phase-of-life reckoning, young adults in their 30s (Xers, by Pew's definition, ranged in age from 27 to 42 in 2007) should have been looking forward to the steepest upward trajectory in wealth accumulation of their lives. Real median net worth typically doubles between age 30 and 40 or between age 40 and 50. Instead, after nine years, these Xers are simply getting back to the starting line. This bottom line should not be accompanied by celebratory fanfare. Gen X remains in deep trouble.
- A new study quashes the theory that U.S. productivity growth appears slow simply because we’re not measuring it correctly. In reality, the amount of “stealth productivity growth” unaccounted for in the official statistics was actually higher 20 years ago than it is today. (The Wall Street Journal)
- NH: For several years, I have been defending the finding of the vast majority of economists and national accounts statisticians--that productivity growth has fallen sharply since 2005--against some Silicon Valley and VC types who keep telling me it's just not so. So I thank Greg Ip, imo the WSJ's best economics journalist, for elegantly summarizing one more large Brookings study confirming the "decline" consensus. For the wonks among you, please peruse the full study at your leisure. Provocatively, the author says that the decline may indeed be even greater than the official data show. Yes, there are price, quality, and indexing conventions that have, over time, given the deflator a slight upward bias and thus have given output and productivity a slight downward bias. But, the author argues, this bias is almost certainly less today than it was in the 1990s before a variety of improvements (many inspired by the 1996 Boskin Commission) were implemented.
- Almost one-quarter (23%) of U.K. Millennials would rather sacrifice one of their five senses than give up their smartphone. Another 10% say they would rather lose a finger than their phone—which might put a damper on their texting. (Tappable)
- NH: Instructing the pollster to brandish a knife during the interview might make this poll a bit more reliable. Fully 68% say they would rather lose their sense of smell--which (taking most taste with it) might render those foodie experiences less interesting or textable. Another 24% would rather lose their sense of sight or touch. What!? Have you ever used a smartphone you could not see or touch?
- Canadian writer Peter Shawn Taylor reflects on the golden era of hitchhiking and the communal spirit it encapsulated among Boomers coming of age. At hitchhiking’s peak popularity in the ‘60s and ‘70s, he writes, “Young men and women could amble down to the side of the road, stick out a thumb, and head off on a journey toward peace, love, and universal understanding.” (Maclean's)
- NH: This is mostly Boomer bloviation. From the beginning of widespread auto use in the 1920s through the 1960s, hitchhiking was always a relatively safe option for adults lacking a car. (Recall the celebrated scene with Clark Gable and Claudette Colbert in "It Happened One Night.") Yet it was not widely practiced because it was seen as slightly shameful to advertise that you had no car. In the 1960s, young Boomers came along with jeans and backpacks who had no sense of such shame ("we're not into things, man"). So hitchhiking by young people flourished in the late '60s and early '70s. However, young Boomers brought with them something else: a steep rise in the rate of violent crime--which, by the late 1970s, put an end to hitchhiking (along with youth hostels). Boomers did not invent hitchhiking. They took full advantage of it in an era when such activities were still safe. But they did, in their own way, put an end to it.
- Fully 46% of Millennials say that their credit score is holding them back. The heavy debt burden posed by soaring tuition costs is weighing down Millennials, a generation that places huge importance on personal finances. (OppLoans)
- Procter & Gamble plans to combat lackluster revenue growth by hiking prices on several brands, including Pampers and Bounty. The commodification of the CPG space, along with new competition posed by higher-end brands, threatens the topline growth of the industry’s biggest firms. (The Wall Street Journal)
- NH: P&G's confidence may reflect misplaced faith in its dwindling brand equity--or perhaps a shrewd anticipation that the general price level will soon accelerate. If the American consumer is holding an inflation party, it pays to show up early.
- The average optometry graduate degree holder spends 15% of their monthly income paying back student loans, the highest share of any degree. High-achieving Millennials in search of a degree that pays for itself may want to steer clear of health care. (Credible)
- NH: Debt-service exceeds 10% of income for a wide range of health professions--from dentists and vets to pharmacists and physician's assistants. Which implies that such degrees are costing hundreds of thousands of dollars. Which, in turn, should make us wonder why such expensive credential walls have been erected. To protect the public? Or to raise the wages of older professionals (by impeding new entrants) and enrich the colleges (who furnish the degrees)? As we have pointed out (see: "Declining Business Dynamism: A Visual Guide"), excessive credentialing is an often-cited cause of productivity decline. And it is turning many Millennials, needlessly, into indentured servants.
- A record 4.4% of Americans age 85 and older have worked over the past 12 months, up from 2.6% in 2006. Workers in this group are most likely to be employed as farmers and ranchers—shrinking professions with a shortage of young talent to take on the mantle. (The Washington Post)
- NH: The breakdown by job is revealing. Back in 1980, when the Silent Generation was in its 40s and the Lost Generation was in its 80s, an 85-year-old who worked was more likely than his or her peers to be poor and more likely to work in manual jobs. Today, now that the Silent are in their 80s, the reverse is true: Those who work are less likely to be poor and more likely to work as professionals, teachers, and property managers. In Midwestern states from which young people have fled, they manage farms. Because the Silent deal so well with people, they still disproportionately work in in retail and sales. Yes, they still work disproportionately as janitors and building cleaners--but these were types of jobs that the octogenarian Lost once dominated.
- Young adults are the most likely to participate in social media activism and ascribe benefits to the practice—but they aren’t exactly sold on it. For instance, Millennials (more than older generations) recognize that merely retweeting hashtags can give people an inflated sense of accomplishment, and may not result in any meaningful policy changes. (Pew Research Center)
- NH: One striking finding here is that the number of Americans who have positive things to say about social media activism (67% say it can "create sustained movements for social change") is outweighed by those with negative opinions: 77% agree that it can "distract people from issues that are truly important" and 71% say that it can "make people think they are making a difference when they are really not." Another finding is that whites generally, and white males in particular, are significantly less positive about "hashtag activism." While Millennials are somewhat more positive overall, the age differences are modest. Millennials are significantly more likely to use social media to get involved or find others who share their views. But they are no more likely than Boomers to use it to express their political views. Boomers, as always, will compete with any generation when it comes to making their opinions heard.
DID YOU KNOW?
Have You Practiced Your Video Games Yet? Parents used to dream of their kids landing a coveted academic or athletic scholarship. But increasingly, they’re hoping that their children cash in on the fast-growing e-sports phenomenon. That’s according to The Wall Street Journal, which profiles the rise of parents who are doing everything in their power to make sure their kids exceed at popular games like Fortnite. Much like hiring a tutor, many parents are shelling out for a gaming coach to help their kids unlock their potential. Bidvine, a contracting site, says it has hired out over 1,400 Fortnite coaches since March alone. There’s more to it than the promise of scholarship or tournament money: Some parents like J.D. Giles take lessons with their kids as a sort of bonding experience. Others are attracted to the relative safety of gaming. In the words of Euan Robertson, who hired a Fortnite coach for his two sons, “They’re not going to break a leg playing video games.”
