I'm in a posting mood. This mood won't last, so I'm striking while the iron is hot.
Anyway, as I was looking around the intertubes this morning, I ran across this item at Zerohedge, which is not a favorite website of mine because the anonymous posters over there are doomer attention whores who rarely document their stories. Zerohedge is the Huffington Post for pessimists.
But this article made some good points and had a few working links to outside sources. Mostly the article had internal links to other Zerohedge crap, like this broken one to the WSJ "source" of the graph below.
"Tyler Durden" (sigh) noted that millennials (those under 35) have a negative savings rate, which means, in the long run, they're even more fucked than they know. This is from WSJ Source, which took me 15 seconds to find.
After a flirtation with thrift after the recession, young Americans have stopped saving.
Adults under age 35—the so-called millennial generation—currently have a savings rate of negative 2%, meaning they are burning through their assets or going into debt, according to Moody’s Analytics. That compares with a positive savings rate of about 3% for those age 35 to 44, 6% for those 45 to 54, and 13% for those 55 and older...
“In the very near term it’s a plus for spending and economic growth, but in the long run these households are not saving, and that will impair their ability to spend in the future,” said Mark Zandi, the chief economist of Moody’s Analytics who calculated the numbers with Moody’s economist Mustafa Akcay.
Let me ask a simple question:
Is it too much to expect that humans use the internet the way it was intended to be used?
Yes, it is too much to fucking expect because documenting stories isn't compatible with greed. If you leave the Zerohedge website, you won't see the intrusive advertising slathered all over it.
But I digress.
Zerohedge did manage (accidentally?) to include a working link to a pre-election message to millennials from Hopey-Changey himself (i.e., it had his byline). This is some fine bullshit, so let's quote it.
And we know that when we invest in your potential, rather than stack the deck in favor of the folks who are already at the top, our entire economy does better. It’s the reason we’ve expanded grants, tax credits, and loans to help more families afford college. It’s why we’re giving nearly 5 million Americans the chance to cap student loan payments at 10 percent of their income. And thanks to the Affordable Care Act, the number of uninsured young adults has fallen by nearly 40 percent over the past four years.
Look at what Hopey-Changey has done for millennials!
Well, I told you it was really good bullshit. The stuff below is a simple cut & paste from the article.
Let’s talk for a second about this new American economy — one marked by new industry and commerce, humming with new energy and new technology, and being driven forward by highly skilled, higher-wage workers. Our medical professionals are part of a workforce that also includes folks who are developing cutting-edge software to help us diagnose diseases. We’re not just punching in and pounding rivets — we’re coding computers and guiding robots. In this new economy, an entrepreneur can start a new business and succeed, an older worker who sees opportunity in a new field has resources available to retool for that new job, and a student can graduate from college with the chance to advance through a vibrant job market.
Today, I’m heading to a place that’s helping to shape that economy. It’s called Cross Campus — a collaborative space in Los Angeles that brings together folks at the cutting edge of a technology revolution, from investors and entrepreneurs to designers and engineers. Because their drive and talent don’t just boost their businesses, they boost our entire economy — and the innovative ideas that they’re coming up with are helping to power our recovery.
Think about this: Last month, our businesses created 236,000 new jobs. Over the past 55 months, they’ve created 10.3 million new jobs — the longest uninterrupted stretch of private-sector job creation in our history. That’s why, for the first time in more than six years, the unemployment rate is below 6 percent. We’re on pace for the strongest year of job growth since the 1990s. Since we emerged from the crisis, America has put more people back to work than Europe, Japan, and every other advanced economy combined.
So for all the challenges in the world, there are some really good things going on here at home. And the reason I’m heading to Cross Campus today is because innovation is one of them. Technologies that didn’t exist 20 years ago, from mobile apps to streaming video to social networks, support millions of American jobs today. Today, our tech sector is the envy of the world.
All those new jobs! And a tech sector which is the envy of the world! What could go wrong?
Well, there is a small problem with wages. Obama only used the word "wage" once in his message. Can you find it in the text above?
Anyway, from Yahoo Finance:
The economy added 214,000 jobs in October, bringing the total for the year to almost 2.3 million. The unemployment rate is down to 5.8%, the lowest level since July 2008 and down sharply from 7.2 percent a year ago. October also marks the 56th straight month of private sector job gains. The U.S. labor market is currently on track to have its best year since 1999.
Still, the report fell short of expectations. Economists had estimated there would be 235,000 added jobs this month, and concerns surround wage growth and the quality of jobs being created.
Hourly wages barely budged in October and are up only 2 percent for the year. That’s just slightly ahead of the rate of inflation. The restaurant, leisure and hospitality sector added 52,000jobs and retailers added 27,100; both are sectors that traditionally pay low wages
Dan Alpert, Managing Director of Westwood Capital, says we are back in the 2013 pattern of low wage job creation. “When you go back to 2013, some 58% of all the jobs that we’ve created are in the very low wage sector,” he says. “Those low wage sectors are retail, temp work, social assistance and leisure and hospitality. And combined those sectors do just a little more than 50% of all the other sector in terms of wages.”
... The economy was a top issue for voters heading into the polls this week, as Republicans won the Senate and retained control of the House of Representatives. “The repudiation of Obama that occurred this week at the election I think is directly tied to the fact that not only do people have a perception that things aren’t going well," Alpert says, "But that things actually aren’t going well for them.”
Hmmm...
So, speaking to you millennials out there with the negative savings rate, the ones paying only 10% of whatever income you have to pay off those back-breaking student loans—our tech sector is the envy of the world!—I will say what Hopey-Changey forgot to tell you:
Be the best barista you can be!
Well you can't save if you don't have income.
From what I understand of how the US job market works for new entrants, to be even considered for most jobs you have to have a college degree. Higher education in the US is insanely expensive, since you need it to be even considered to have a job, and you (mostly) need a job for income, and everything in the US is monetized, so colleges are raising their prices over the course of time to infinity. This means you need to take on debt to go to college, and the debt can't be discharged in bankruptcy. And it is not only possible to graduate from college and be unable to get a job, it is increasingly likely, though arguably your chances are better than if you didn't go to college at all, since they just have to be above zero. So people are entering the job market having already taken on a large amount of debt, to compete for fewer and less renumerative entry level positions.
The real question isn't the savings rate for the millenials even lower? And why isn't the suicide rate higher?
There is also the issue that savings are pretty useless if interests rate are flat, and there is nothing to put the savings in to earn a return on investment. In this situation they are just deferred consumption. Maybe if you are trying to accumulate enough money for a big purchase (almost never advisable in this environment), or are in a situation like many older people are where you won't be working for a few years, and they you will die, so savings can bridge that gap. Older people still get some appreciation due to the government subsidized appreciation on their houses.
I don't think linking to either the Wall Street Journal or to the President of the United States enhances the credibility of what you are trying to say either.
Posted by: Ed | 11/10/2014 at 03:31 PM