The Cheapest Generation

http://www.theatlantic.com/magazine/archive/2012/09/the-cheapest-generation/309060/

by JumpCrisscross • 14 years ago

109 202 14 years ago

theatlantic.com

nodata• 14 years ago

Single page version: http://www.theatlantic.com/magazine/archive/2012/09/the-chea...

I don't like The Atlantic's title: it implys what is happening as negative.

hieronymusN3• 14 years ago

This is because our current economy is skewed towards consumption with real estate and cars as the primary metric. I agree, I don't see it as a negative. I'm Gen X and I don't own a house or car.

mattgreenrocks2• 14 years ago

I realized recently I'm more reluctant to own a house than have a baby.

andreasvc• 14 years ago

Consumption is the driving force of modern capitalism generally, not particularly related to the current economy. Capitalism relies on surplus; the problem with this of course is that is wasteful but it seems we don't really have an equally successful alternative.

fungi• 14 years ago

indeed, by freeing up the money that is tied up in mortgages/car loans and burnt as oil, can't we put that money and those resources to far more productive endeavours.

theorique2• 14 years ago

When I last had a personal car, TCO was over 900USD per month (auto financing, parking, insurance).

Since I live in an urban area well served by subways, buses, taxis, Zipcar, and Uber, letting go of that high fixed monthly expense in favor of an a-la-carte approach has been a great financial benefit for me.

Of course, if I had two kids, lived in remote suburbs, or had to commute to suburbs, the equation would be very different.

But for now, for me and many other urban dwellers, the value of owning my own car just doesn't compute.

andyking4• 14 years ago

I own a car now, simply because I tried relying on public transport for a year and found the experience pretty depressing - it makes your day so very long (I was basically doing 6am-7pm including commuting) and loses you flexibility. I fell into a routine of coming to work, going home, and doing nothing else, because it was so much effort to plan a trip anywhere other than the office. It started to make me sink into something approaching a depression.

So here I am, with a car - but it's not a fancy brand-new £10,000 model with crippling monthly payments. It's a slightly beaten-up 2002 Micra, I bought it from a guy down the road for £600 cash, it doesn't use much gas. I don't care how I look in it, whether it's 'cool,' I don't see it as a status symbol, I see it as a tool for life.

Maybe that's the difference - younger generations don't see a house or a car as a symbol of status or wealth, merely as something to be used, as a necessity - just like you wouldn't choose your electricity supplier based on how "cool" it is, we don't choose our cars on that basis either now.

TheFuture3• 14 years ago

Also think about how much easier it is to buy used vehicles. All the car buying websites have changed the auto sales industry in the last 10 years. The used car market is much bigger now and more selection, meanwhile consumers are more informed as ever on the value of new cars.

Though as much as the article talks about cultural preferences of Gen Y, I think the "cheapness" is being driven solely by Gen Y having no money. Sure you can say you don't need your car as a status symbol, but if you were making 40% more in salary and didn't have $100k in student debt, you'd get a nicer car.

We all entered college as tuition skyrocketed and yet the real value of a degree is shrinking, and we all graduated into a decade of zero economic growth. We're masking our (relative) poverty by being content with all are parents old used stuff and calling it "cool".

andyking4• 14 years ago

I don't have £100,000 in student debt - because I didn't go to university. I'm not rich, but I'm financially independent. The only thing that would push me to get a nicer car would be better reliability, or better gas mileage - which both save you money (in gas, and repair bills / wasted time) in the long run. Car ownership is purely financial for me.

Swizec3• 14 years ago

> younger generations don't see a house or a car as a symbol of status or wealth, merely as something to be used, as a necessity

And then there are fixies - impractical bikes that cost 700 euro simply because they are cool. Whereas you can get a practical bike for less than 200 euro.

Maybe it is that we are cheap, so those things that cost beyond a certain threshold (like cars and housing) just need to work, whereas things under a threshold need to work and be cool.

iPhones also strike me as an example of this. Ray Ban glasses as well. A lot of clothing stuff ... actually pretty much everything but houses, cars and the big expenses must be cool enough to be bought.

jmduke• 14 years ago

> Bikes

Fixies aren't really popular beyond the hipster demographic; while there are a lot of bikes that cost >$500 dollars, they're generally bought by serious bikers for whom the value proposition is more than worth it.

> iPhone

The only thing exorbitant to me about the iPhone is the data plan, because of how often I'm in the range of WiFi. I'd argue having a personal GPS, email client, information lookup, etc. etc. is more than worth the monthly fee -- I've been lost in the country enough times.

> RayBans

Sunglasses, unfortunately, are in a stranglehold market. You either spend $20 and get colored glass or spend $200 and get an actual product (at a ridiculous markup.)

(That being said, I've had my same pair of RayBans for 8 years. They hold up well.

jberryman• 14 years ago

Hm, in America fixies are pretty universally beater bikes that someone took the gears off of to make rideable again.

MengYuanLong• 14 years ago

You may feel fixies are impractical but they carry benefits. The primary one being better power transfer. Second, you can often make a cheap fixie by finding an old frame, refurbishing it, and replacing the rear hub. Yes, you can buy them for $700+ but unlike iPhones, there are a number of ways to obtain one for cheap.

Further, a bike that costs less than $200 is certainly not a bike I would buy for commuting. Having commuted without a car for over three years, I can assure you that steel frames are not your friend and arguably not practical if you want to enjoy your lifestyle.

adam-a• 14 years ago

I work in central London and see a lot of people riding about on these bikes, clearly very expensive ones often too. This is a part of town where it's impossible to park, the traffic is terrible, and you have to pay[1] to drive there at all. I definitely see the fixie (or really the bike in general) taking over from the car as a status symbol for some people. Driving a car through Soho marks you out as either rich or stupid or both, a bike has a whole set of other connotations about fitness, ethics, intelligence. The expensive ones also carry wealth sat us of course.

I think the point is, that while it's true they are often status symbols, there is a practical motivation behind them too.

[1] Congestion Charge - http://www.tfl.gov.uk/roadusers/congestioncharging/

mattgreenrocks2• 14 years ago

You're right: cars are a means to an end. The incremental value provided by a luxury car over a regular car is exceedingly slight, and ends up going negative when you compare long term maintenance and gas prices.

The entire problem with luxury cars is summed up in the word 'luxury': burning cash for social proof.

cglace• 14 years ago

The incremental value is entirely dependent on the person buying the car. I've owned a mercedes for 8 years and when I drive other peoples cars I go crazy because of the little things I take for granted in my car.

lawdawg• 14 years ago

I dunno man, stuff like this:

http://www.youtube.com/watch?v=CwwWqRV2RsI

Makes me think its just a matter of the younger generation not having the money to buy a car. They spend it all on smaller, indulgent purchases and fail at saving.

api12• 14 years ago

I finally got a car since I was able to land an abusrdly cheap loan (2%!), but still won't touch a house. Real estate where I live is absurd, and I do not live in one of the big prestigious cities. (I used to, and real estate there was incomprehensible.)

andyking4• 14 years ago

Why did you need a loan to buy a car? I just waited a couple of months until I'd saved enough to buy a small, fairly old car for cash. It's not a fancy car, but it is reliable, cheap to run, cheap to insure, and costs me nothing in terms of financing now.

ganley2• 14 years ago

Aside from those whose livelihood depends on car sales, who have an obvious incentive not to believe it, why is it so hard to believe that people might simply not want to own a car? The whole tone of this article seems like: It appears that millennials don't want to own cars, but that can't be right, can it? If I could get away with not owning one, I certainly would. As it is, I spend as little time in it as possible (much preferring to bike).

jswinghammer• 14 years ago

Well this is written from the perspective of economists who lack imagination. If consumers don't spend money on cars then they will just spend it on other things. It means car companies will get smaller, less influential, and probably go out of business in many cases. I assume the public doesn't have the stomach for another round of bailouts for car makers but it's not like we were consulted about that anyway so who knows if it matters.

stephengillie2• 14 years ago

If consumers don't spend money on cars then they will just spend it on other things.

Not necessarily true. Half the comments in this thread are saying that consumers don't spend money on cars, and don't spend it on other things, because NOBODY HAS MONEY.

ZoFreX2• 14 years ago

I thought that assumption throughout the article strange, too. A factor no one else seems to have mentioned (which admittedly only applies to transport, not housing) is that public transport is, overall, getting better. In London I have an Oyster card which actually gets me all the way to my dad's house too, even though he lives well outside London. Something like this just would not have been possible in the 90s, and now I can check how much money is on my Oyster from my phone, and see live train and bus (!) times on it as well. Not to mention that having tools like Google Maps makes using public transport in an unfamiliar city a doddle, I just punch in a postcode and it tells me which bus to get on, and which stop to get off at.

goatforce53• 14 years ago

Although Londoners complain about their public transport, it really is exceptionally good. For many routes within London it's quicker and far cheaper to take public transport (or a bike!) than to use a private vehicle.

Most places aren't like that, unfortunately.

kapitalx2• 14 years ago

Public transportation in America might as well be non-existent, and American suburbs which is where the largest portion of the country lives in, are un-walkable. You can't do anything if you don't have a car. I think this isn't clear to people who live in the few very large cities in the US, or live elsewhere in the word where public transportation does a good job of getting you around in a timely manner.

To give you an example, I live in San Jose area. To get to downtown san jose, it'll take me less than 10 minutes in a car on the high way, 45 minutes on the bike through the streets, or 1.5 hours on the bus.

geogra42• 14 years ago

Me too. I only use my car when I absolutely have to. My bike, however, I use every day for commuting.

rsheridan62• 14 years ago

The great majority of Americans, including millenials, live in unwalkable areas where not having a car is a major PITA at best. They can't get away with not owning a car any more than you can.

jorleif• 14 years ago

Does the author of the article somehow assume that Millennials don't spend because they don't buy cars or houses? Do they just stuff their money in their socks, or might it be that they splurge on electronics and traveling? Of course, one does not usually take up a mortgage for any of those, so that may lead to macroeconomic woes in the short run, but in the long run I suppose we can just expect consumption patterns to shift.

roc2• 14 years ago

> "What if Millennials’ aversion to car-buying isn’t a temporary side effect of the recession, but part of a permanent generational shift in tastes and spending habits?"

It's hardly surprising that people without the money for cars are of the opinion they aren't so important anyway. Not being able to afford things tends to draw into sharp relief the difference between wants and needs.

And I realize Ford's marketing department can't do much about the slow, grinding recovery and thus are stuck worrying about long-term attitude shifts. But until the demographics show millenials moving to and staying in urban areas where transit is a feasible option, I can't imagine it's legitimately worth fretting over.

If millenials still choose to settle down to raise children in the suburbs, car ownership is pretty much necessary.

The only real threat from lasting attitude change, is that perhaps millenials will vote for more transit projects and subsidies over more car/road projects and subsidies and thus make it more feasible in more areas to not own cars.

ganley2• 14 years ago

> The only real threat from lasting attitude change, is that perhaps millenials will vote for more transit projects and subsidies over more car/road projects and subsidies and thus make it more feasible in more areas to not own cars.

We can only hope.

CWuestefeld6• 14 years ago

The trend for mass transit is to remove options from travelers, thus making itself less useful to us. As such, it's hardly worth funding. [1]

That's not to say that it must be inherently so. Just that, so long as these projects are typical government projects that are expected to go over-budget and over-deadline with no repercussions, they will be used as a tool for political favors and cronyism, at our expense.

[1] http://www.cato-at-liberty.org/denver-fools-the-wall-street-... Quote:

The old-style public transit system used cheap, flexible buses whose routes could be altered overnight to take people from where they were to where they wanted to go. When Denver first built rail, it substituted expensive but glamorous trains for inexpensive buses, but still allowed people to go from where they were–provided they were willing to drive to a park-and-ride station–to where they wanted to go–provided they wanted to go downtown. ...

This has been tried before, of course, most notably in Portland. How well did it work there? In 1980, under the old bus-transit model, transit carried 9.8 percent of Portland-area commuters to work. By 2010, with seven different rail lines and scores of transit-oriented developments, transit carried just 7.1 percent of the region’s commuters to work.

euroclydon3• 14 years ago

Is there an example of a vote, in the last two decades, for transit projects over roads that has actually led to high density neighborhoods where residents use mass transit to get to their jobs?

The only reason I ask, is because I'm almost finished reading, in The Power Broker, how Robert Moses permanently crippled the NYC metro area and Long Island in particular, forcing them into a lower-density, automobile-centric society, when they would have been better served by mass transit, which he let rot on the vine. I imagine most other metro areas that were expanding at the time followed the same path.

ef43• 14 years ago

> If millenials still choose to settle down to raise children in the suburbs...

I think that's an open question. Anecdotally, there are an awful lot of young families in my particular urban environment, mine included. Most intend to stay if they can, some give up and decide they "need" a bigger house than they can afford here.

As far as schools, this area is past the point of critical mass where there are enough high-earning, highly-educated families staying that they've driven the school quality up. Plus there is a huge and vibrant community of home schoolers to work with if you want a DIY education.

brudgers2• 14 years ago

In the age of smart phones, the car has ceased being a vital communication tool for young people. There's no need to drive to the mall to see if Paul is there hanging out. A text will let me know that he's at Joel's party instead. Another text and Steve will swing by in his car.

The housing situation is another matter. There's a glut. Credit is tight. Jobs are scarce. And housing prices are going down. Millenials aren't stupid.

hnal9433• 14 years ago

You're right about smart phones, but I'm not so sure about housing. Credit is ridiculously cheap, and housing everywhere is on sale. If you have a job, why wouldn't you buy as much house as you can afford?

andyking4• 14 years ago

Because the stability of work at present means it's not practical to do so. I could lose my job at any moment - and if I've bought a house, I'm stuck in the same city, looking for a limited amount of work.

I rent at present, it's not ideal, but it means that I'm not tied to a certain geographic region - if I need to move, it's a hassle, but I don't have a house on a 25-year mortgage that I'm stuck trying to sell in a terrible market, I can just say to the landlord - right, I'm offski, here's the keys, bye.

goatforce53• 14 years ago

> If you have a job, why wouldn't you buy as much house as you can afford?

Because interest rates are likely to go and then I wouldn't be able to afford that mortgage any more?

I'm kinda thinking about buying a house, so I filled in an online mortgage calculator to work out what sort of money i'd have to work with. It said i'd qualify for a mortgage that was twice as high as what I think I need to get somewhere really nice, or three times as high as what i'd need for somewhere quite good.

I don't need that much extra debt to worry about.

brudgers2• 14 years ago

Because housing is not necessarily (or does not neccessarily appear to be) a good investment. Millenials watched their families wealth evaporate. I would the stress of the Meltdown to effect them in a way similar to the way the Great Depression effected the generation which came of age during that time.

Furthermore, demographics in much of the affluent world is likely to create a further surplus of housing which further reduces over the long term the value of entry level housing as an investment vehicle. The population is greying.

stephencanon• 14 years ago

Because current home prices (post-crash) are still at unsustainable multiples of incomes.

My wife and I just bought a house. We could have afforded something big an shiny and new, but the prices being asked for that are simply unconscionable. Houses are not worth that much, and anyone who thinks otherwise is delusional. We are still in a bubble.

Instead we bought a rather nice small house in town, for less than my yearly base salary (i.e. not counting my wife's income or bonuses). It's not showy, but it's exceedingly comfortable. We'll spend some cash to make a few changes, but our payments are half of what our rent was previously.

We could have easily spent five times as much money, for a house that wouldn't suit our needs any better than the one we bought. How could the underlying asset possibly be worth five times as much? It can't be. Bubble. I'll invest my surplus income in something with sound fundamentals instead, thank you.

npsimons2• 14 years ago

why wouldn't you buy as much house as you can afford?

Because you may not have a job next month? You don't need the space? You have better things to spend the money on? Bigger houses come with bigger energy bills? While I do agree that the biggest factor here is economics (if people can't pay, they won't), I also think that there are other non-insignificant factors. Some of it is getting away from cars and houses as status symbols (a good thing), others are more practical (trying to offload a house while looking for a job is not easy). In this day and age, long-term employment is not a sure thing, so why settle down and grow roots when you'll only have to rip them out again?

bunderbunder2• 14 years ago

Because by renting as little apartment as I can get away with, I:

- Leave more money in the bank.

- Get to maintain a positive net worth.

- Am much more free to move if I need to.

- Don't have to worry about sudden, large, unpredictable repair costs.

- Can demonstrate that I have learned something from watching the preceding generation recently get taught a very brutal lesson about the dangers of habitually buying as much as you can afford.

showerst• 14 years ago

I think that the kind of Millenials this article is trying to describe (DC/NY/SF types) don't live in places where housing is affordable.

I'm pretty much a spot on example of what this article's describing; I live in DC where the average person in my peer group is still single, makes <50K/yr, and has student loans. A decent metro-accessible 2BR apartment here is 350K+, a house in the gentrified or gentrifying parts of the city is 500K+ (if school is a concern, make that 700K+).

This is COMPLETELY different from the experience that my friends back home in my small city in Missouri have, many of whom are married and buying houses for a song (<100K on 25-80K combined incomes).

The car thing fits this pattern too, a car in DC (and especially NY) is a total luxury item. A parking spot alone in my building is more than my rent was in MO. In MO, it's a necessity.

It's not that the author is right or wrong, they're just using a very broad brush to talk about a specific (albeit usually trend-setting) group of people.

qatalo• 14 years ago

"MTV Scratch — a corporate cousin of the TV network responsible for Jersey Shore", I like how they say "responsible" akin to a criminal action. +1

geargrinder• 14 years ago

After watching their parents and grandparents obsess over material possessions, why is anyone surprised when Millennials choose to prioritize other things? Owning a bunch of stuff is a giant hassle and doesn't bring you any more happiness. Perhaps they have just learned the lesson their parents taught them.

theorique2• 14 years ago

The things you own, end up owning you. (Tyler Durden)

logical422• 14 years ago

Or maybe it's just the generation that realizes that the supply of oil is finite.

hnal9433• 14 years ago

That's the reason young people aren't buying houses? Try again.

logical422• 14 years ago

if i'm guilty of making some sort of fallacious comment then at the very least you are also guilty of it.

dredmorbius4• 14 years ago

If you think that the cost of oil doesn't have very direct impacts on the value (and expense) of housing, think again.

Commute costs, viable living distance, heating and cooling bills, construction costs, amenities (pools, landscaping, toys including boats and RVs), and consumer goods are all directly tied to energy costs.

Housing is an expensive, illiquid, geographically fixed investment. You're investing not only in the property and structure, but the neighborhood, local job markets, and/or anticipated commute costs.

Oil prices have had a very direct effect on the present and future value of suburban and exurban housing. Both positive (in the era of cheap energy, 1945 - 1974), and negative (as prices increased from the 1970 oil shocks onward).

JoelSutherland• 14 years ago

In 1985 the average age of a car on the road was about 6 years. In 2012, the average age is over 11 years. This has a number of obvious implications on new-car purchasing behavior of young people:

1. It's much easier to buy a used car now since they have more years of service in them.

2. Getting a hand-me-down from a relative is possible.

3. Culturally, getting a new car is much more rare so there is less pressure to do it.

I think 3 is a huge factor. The social status a new car provides has fallen dramatically.

bmj• 14 years ago

Culturally, getting a new car is much more rare so there is less pressure to do it.

I agree, and this isn't just for Gen Y-ers, either. Most of my Gen X friends (I guess I'm a Gen X-er, too) have no interest in purchasing new vehicles. My wife and I have owned exactly one new car (which we then sold after 6 years to purchase our camper van), and our current vehicle is ten years old. Shiny cars just aren't the status symbols they used to be.

colomon• 14 years ago

Funny, as a Gen X-er I was reading this as a story about somebody else, but you're totally right. I'm 41 and I've only ever owned one new car. We bought it when my wife was pregnant, because I wanted to make sure she had a good reliable car for her 30-minute commute to and from work. That car has lasted five years so far, and fate willing it will last at least another five. (Her commute is only five minutes these days, and the carseat is in our purchased-used minivan.)

It's really a crazy contrast from what I remember a number of adults doing back in the 80s -- a new car every two years, regular as clockwork.

brown9-2• 14 years ago

A bit ironic for the car companies that their progress in reliability of a vehicle as it ages ends up biting them in new car sales.

DonnyV2• 14 years ago

Thats because they had to compete with foreign cars. Everyone started buying foreign cars cause they lasted longer.

euroclydon3• 14 years ago

With every passing year, cars become less substantial, and more like delicate metal cages surrounded by plastic fairings, and protecting their inhabitants with vinyl ballons. I just can't fathom parting with my hard-earned money for such a creation.

krschultz2• 14 years ago

The newer cars are far safer, it seems every 5 years we bump up the crash test standards.

If you've seen a modern ski helmet after a hard hit, it looks destroyed. You wonder how it helped at all. But the destruction of the helmet absorbs some of the energy. A 'sturdy' helmet would just pass that right through to the head. Helmets are now effectively single use.

Cars are almost the same way. It's seemingly silly how easily modern cars are totaled. But they are crumpling and absorbing energy - while maintaining the passenger compartment's integrity. Older cars simply folded up. Often times the passenger compartment was the weakest point - i.e. the first thing to crush. That makes modern cars fairly disposable after major accidents, but I'd vasty prefer the safety of a modern car.

christensen_emc• 14 years ago

I would add that used cars are increasingly more reliable and easier to vet. There are also more resources available to help identify lemons as well.

dredmorbius4• 14 years ago

Truth.

CarFax was pretty much directly predicted by Akerlof's "The Market for Lemons".

_delirium• 14 years ago

This likely varies a lot based on location, but my impression is that suburbs aren't as high-status with (some) young people as they used to be: many people who in my parents' generation aspired to owning a house+garage+car now aspire to live in the city and walk/bike/transit to work. That doesn't mean no spending, though; young people are certainly shelling out to live in San Francisco or Manhattan, even if they don't buy a car.

lilsunnybee• 14 years ago

This article is dumb. It seems to ignore the most obvious explanations for these trends, and lumps together young adults in all socioeconomic classes and geographic locations like they're the same (they're not).

Outside of urban areas, cars are pretty much a necessity. I highly doubt that young adults in these areas aren't using cars at all, but it makes a lot of sense that they would buy used or borrow friends or parents cars over owning a new car, because low wages and unemployment tend to result in not having wads of cash on hand to throw at owning a new vehicle.

For young adults in urban areas, cars have pretty much always been a nice-to-have, but if you don't have the money for them (especially the extra for parking in urban areas), public transportation will work, even though it might not always be sexy.

Same with home ownership. Homes are the most expensive possessions out there. If you don't have the money, credit, cushy job, you can't afford one. So living at home, or with friends, or renting are the doable options, even though home ownership is still highly desired.

The experience of middle and lower class young adults is much different than their upper class peers. I imagine buying behavior really hasn't changed much for the upper classes. But the large majority in the lower classes have the greatest sway on the trends.

I find it fascinating that anyone would be baffled why these trends exist. When youth and lack of experience mean shitty jobs and unemployment, its no wonder the younger demographic aren't big spenders. If you don't have the money, you don't have the money.

figital• 14 years ago

I swear I read this article last night and it had a different title. Would be interesting to see what the linkbait choices were.

tgypsy• 14 years ago

One word: insurance.

Rates for drivers under 25 are upwards of $200/mo in most urban areas, and that's for the utmost basic 'one-way coverage' insurance. Under one-way, if you are deemed even partially at fault in an accident, however minor, the insurance pays the other's bill only - and essentially ensures you cannot drive for the next three years as premiums quite literally skyrocket.

Anecdote from my university years: friend of mine was driving his van, had a lady sideswipe him and send him into the median, immediately crashing into a tree. She kept driving. The van incurred damage from the sideswipe. He was found 100% at fault regardless. His insurance went from an already preposterous ~$240/month to over $900. Nine hundred dollars per month - isn't that what they charge for Lamborghinis? Fully licensed, clean record for 4+ years at the time, I believe he was 21. It was over two years until the rates finally lowered to 'a more affordable' $300+/mo, which is AFAIK still what he pays.

I currently pay $250/month, one-way of course. I could drive a '95 Civic or an '08 BMW, my rate would differ ~$20/mo. The difference between dozens of insurance companies is about the same - $20 more or less. I am 24.

FWIW, bikes are not exactly feasible for over half the year in our climate (Toronto).

kapitalx2• 14 years ago

As I was reading your post I said to myself, this person must live in Canada! turns out I was right :)

I used to live in Toronto, bought my first car when I was 20, got into an accident at 21; I couldn't afford insurance and hence a car again until I moved to the US at 23. It isn't the same here, my wife and I now pay $200 every 6 months which is 3rd party and liability (the one-way you mention) and convers both of us. Also 1 accident in every 3 years is forgiven. (I live in California)

indiecore• 14 years ago

> “In the past, housing was the main vehicle for investment, but education is also a vehicle.”

Is this why university costs more than a house now?

Shivetya• 14 years ago

The closeout of the article is overly optimistic. Oh I know many Millennials who are "investing" in themselves. Trouble is it is not education but instead clothing, electronics, and expensive trips. I can understand why many do not want a new car or even a car, it is far easier to declare you don't want a thing than to admit you cannot afford what you want.

So there are two sides to this story.

mbesto• 14 years ago

I believe the next shift in the economy is towards an "Entertainment Economy" (we're currently in an Service Economy, or least the Western world is). Which means everything we do has to be part of some sort of entertainment or experience. Anything that is a commodity, such as car, train, plane, or bus, is no longer going to yield high profits. For example, it means companies like BMW, Mercedes, Porsche, will win out, because they no longer sell something that gets you from point A to point B, but rather they sell you the Ultimate Driving Machine™. Heck, even cycling is now more of an "experience" than a car. Cars are just plain boring to my generation.

aravenel2• 14 years ago

I'm fairly sure the reason 21-30 year olds aren't buying houses and cars in droves isn't because they are "quirky eco-conscious individuals" that your marketing "isn't speaking to"... I'm pretty sure its mostly because:

1: Many of them don't have jobs (or have low-paying jobs) because of the economy.

2: Many of them watched their parents drown in debt from houses and cars they bought but couldn't really afford

3: Student debt.

No amount of marketing is going to fix that.

This quote alone just makes me shake my head: “I don’t believe that young buyers don’t care about owning a car,” says John McFarland, GM’s 31-year-old manager of global strategic marketing. “We just think nobody truly understands them yet.”

rsheridan62• 14 years ago

#3 is underappreciated. We have a generation that's going to be slaving away for years to pay off large student loan debts that are at high interest rates compared to a mortgage. Naturally they're going to be averse to wasting money on an overpriced car when they could be paying a student loan instead, which has a guaranteed rate of return of 5-10% (depending on the terms of the loan), tax-free.

aravenel2• 14 years ago

Definitely that, but also the skyrocketing costs of a college education. The days of paying your way through school by working summers and weekends are over. Either you are lucky enough to have parents pay for your school, or you are coming out of school with debt the size of some people's mortgages. There goes your ability to buy a house or car...

Then factor in that for many folks, they spent that money on that education and graduated to find out the only place that would/could hire them was the local coffee shop for 20 hours a week, and there is no amount of marketing in the world that is going to convince that person to buy a $30,000 car.

ahoyhere4• 14 years ago

You are right. As a dropout, I only learned recently how many of my friends were struggling under monthly student loan debt of $50-80k with payments of $500-800. There goes car money, poof, or 20-45% of a mortgage payment for a reasonably nice home in an urban area like Philadelphia.

smoyer• 14 years ago

Cars were never a good investment, and driving a new one off the lot will cost you 20% (minimum). I'm quite a bit older than most HNers but have driven reasonably good used cars for years. And now my two college-aged kids have chosen cars they thought were cool ... a 1971 VW Super-Beetle and a 1991 Toyota MR2. These cars are both far more cost-effective than a new car ... the key is to pick one that was well maintained! I honestly don't know how the car companies can justify a price that is 1/4 the cost of a house (in many areas).

Houses on the other hand have always been held up as an investment, but I think the millenial's have been affected by witnessing the housing melt-down. Now is actually a good time to get into a mortgage (in many areas), but many people will wait because they don't want to see their investment decline. You read stories about the people who are underwater on their mortgage, but you never hear about people like me who bought a house they could afford, made payments and improvements and even with the collapse of the housing bubble, my investment is worth twice what I've put into it.

But younger people view houses and cars as tools and I can honestly applaud that view ... neither will bring you happiness by themselves.

codegeek• 14 years ago

When I was 22, I only wanted to buy new cars and my very first car was brand new. Slowly, I realized that used cars are a better option and never bought a new one again. Now at 31, I don't even have a car because I just don't feel the need. Life,age and experience changes perspectives so much. Having said this, I love BMWs but not buying one anytime soon.

thaumaturgy2• 14 years ago

I'm sure it has nothing to do with the fact that 78 hours of minimum wage work could pay the rent in 1980, compared to 109 hours in 2010 [1], along with the other associated cost-of-living increases over the last three decades that have come without comparable increases in wages.

I doubt that most people who felt financially secure and could afford a new car wouldn't want to own a new car. Nobody really enjoys driving a beater, or being forced to walk or ride a bike everywhere (aside from doing it for the enjoyment of it), or trying to negotiate for rides with friends. Public transportation in most of the U.S. is awful, so I don't see many people choosing that over having your own shiny new car.

So the article briefly touches on the economic pressures facing young people in mentioning the recession and student debt, but it spends most of its paragraphs trying to paint some kind of cultural picture of "Millenials" as being a neo-beatnik generation that worships sharing.

No, it's the economy, stupid. And not just recently, either; for the last 50 years at least, there has been a gradual trend towards ownership of things like homes and cars costing more and more in terms of the working hours needed to afford them.

If you are among the 3.8 million people making minimum wage (or less!) now [2], a car is the last damn thing you want to own. You won't be able to afford a good one, so you'll constantly be spending money on maintaining it, not to mention that it will strand you one day and your minimum wage job will be more likely to fire you for not showing up than the average cubicle job. Cars are expensive to license, expensive to insure, and in California, old cars are expensive to smog. Even better, if you fail to pay for any of this, you're likely to receive a citation or ticket, which can quickly add up to more time off work and more money out of pocket.

If you're young, you're far more likely to either be burdened by student debts or be making minimum wage [3]. That means that the odds are that you're either not living on your own, in which case a shared vehicle (either a housemate's or a Zipcar or something else) makes more sense than owning your own, or you're living on your own and you can't afford a shiny new Ford Fiesta without a third full-time job.

Additionally, the entertainment industry tends to make more money during economic downturns, and poor people are more likely to spend a greater portion of their money on entertainment. If you can afford little, you might as well have as much fun as you can, especially if your prospects for making more money in the near future aren't that good. If you can hitch a ride to Burning Man, that sounds better than spending the money of the ticket price and time off work and food and everything else on mechanical work for your aging car.

Bah. This article was crap. It didn't have the quality I've come to expect from The Atlantic.

[1] http://finances.msn.com/saving-money-advice/6952105

[2] http://www.bls.gov/cps/minwage2011.htm

[3] http://www.bls.gov/cps/minwage2011.htm again.

shanelja4• 14 years ago

I can attest to that, I live in the UK, public transport in the north is okay but far from optimal.

I wish I could afford my own transport, but my low paying tech job (I'm a 4 year self taught junior developer at a small web development company) can barely pay my rent, let alone afford the ridiculous amounts of money I would have to pay for car insurance (I think I was quoted around £2,100), my driving lessons and a car mean that, for the next few years at least, it won't be possible.

Which is a shame, considering that I have to pay 1/6 of my monthly wages in monthly bus tickets anyway.

api12• 14 years ago

In most of the U.S. public transportation is virtually unusable. I've heard European exchange students compare the U.S. transit system to the worst of the former Soviet bloc.

shanelja4• 14 years ago

One of my friends spent some time in California this year interning with Google and he said that while public transport around California was bearable, when he spent some time in New York he found it completely useless.

One of the qualms I have with English public transport is that over 55's get completely free transport, (I have no issue with them of course) whereas 15 - 21 year olds tend to pay extra in my area, so the people who are only just starting to work in their low paying jobs get charged so that people who have houses fully paid for and receive money every month on their pensions can have it for free.

yummyfajitas10• 14 years ago

Minimum wage is a silly thing to look at. In 1980, 10% of men and 22% of women earned min wage. In 2010, this fell to 5% and 7%.

http://www.statista.com/statistics/185536/share-of-workers-p...

Further, a look at hard data (for both the bottom 20% and the middle 20%) shows that people today are more likely to own a car than in 1981, and have more house per person than in 1989 (no data on square footage exists in 1981).

http://www.aei.org/files/2011/10/25/Material-Well-Being-Poor...

So no, it's not the economy.

api12• 14 years ago

Earth to Planet Trust Fund: it is the economy.

http://livingwage.mit.edu

Also look at the ratio of median income to real estate value. We are still in a housing bubble.

My household earns about 40% more than the national average, we do not live extravagantly, we budget well, and we feel barely middle class. This is ridiculous. I'm surprised there aren't riots.

specialist3• 14 years ago

Really? AEI?

Minimum wage hasn't kept up with inflation.

Debt financed consumption.

You're trying too hard. This stuff isn't that complicated.

thaumaturgy2• 14 years ago

Upvoted you for being the only response with numbers so far, even though I disagree with your conclusion.

The average price of a new car in 1980 was $7,200 [1]. In 2010, it's $28,400 [2]. That's an almost 300% increase.

Federal minimum wage in 1980 was $3.10 [3]. In 2010, it's $7.25, a 130% increase. That's lagging pretty far behind new car prices.

You point out that fewer people are earning minimum wage now than in 1980, but I would counterpoint that more people are unemployed now than in 1980 -- by almost double in terms of the real numbers of unemployed people (but "only" a rate increase from 7.1% to 8.4%) [4].

Although car ownership did increase from 1980 to 2010 [5], total new passenger car sales actually fell from 1980 to 2010 [6], which is closer to what the original article was actually discussing, and would support the conjecture that there are simply more cars on the road now than in 1980.

Further, the inflation-adjusted income of people aged 25 to 34 has stayed roughly level from 1980 to 2010 [7], which pretty well jives with so much of what I've read everywhere else that shows a tremendously overall weakened buying power amongst the youth demographics -- which, again, was what the article was trying to be about.

So, in summary: the price of a new car has gone up a lot but wages have not, especially if you're young. I'm pretty confident that this might be a factor in why young people aren't buying new cars.

[1] http://www.thepeoplehistory.com/1980.html -- might not be a good source, I'm open to suggestions for something better.

[2] http://www.ehow.com/facts_5977729_average-cost-new-car.html; this number seemed high to me, but http://www.usatoday.com/money/autos/2010-07-12-carprices12_S... corroborates it.

[3] http://www.infoplease.com/ipa/A0774473.html

[4] http://www.nidataplus.com/lfeus1.htm

[5] http://en.wikipedia.org/wiki/Motor_vehicle#United_States -- because I questioned the partisanship of your source.

[6] http://www.bts.gov/publications/national_transportation_stat...

[7] http://nces.ed.gov/fastfacts/display.asp?id=77

JumpCrisscross2• 14 years ago

I'm 21, live in New York City, and let my driver's licence lapse over a year ago. I don't plan on owning a house, preferring to drive my surplus wealth into assets I understand better and which don't restrict my mobility, and don't care to own a car.

This is not economically motivated - I have comfortable free cash flow and a healthy balance sheet free of personal debt. I pay for a car service and take taxis more than public transportation and pay more than the average U.S. homeowner's mortgage payment in rent. I also spend a great deal more than my parents, who find my behaviour and preferences baffling, on travel and technology.

I won't disagree that a significant fraction of decreasing home and car ownership may be explained by economic factors, but would caution that (a) there is a significant minority that is making these choices as a matter of preference, and, (b) for the rest, these behavioural changes, initially motivated by economic conditions, could become ingrained to where they persist beyond economic weakness. With the second point I'm not saying we will be a "cheap" generation, just cheap traditionally, as we spend in categories we value more than piles of sticks and little steel boxes propelled along asphalt by exploding chemicals.

elarkin• 14 years ago

I suspect that you are a minority (as you admit). My monthly student loan burden exceeds my rent burden by almost $200; my loan debt is far less than the median.

There may be a cultural factor to it as well. I don't find the need to drive everywhere like I did growing in the 90s, but I certainly don't have a ton of income left over for car and fuel (let alone even more debt for a mortgage and the other costs that entails).

My behavior is driven more by economics than culture.

stephengillie2• 14 years ago

[I] live in New York City ... and don't care to own a car.

Your lack of desire for a car has a LOT more to do with living in NYC than your age or social status. You sound just like friends of mine from NYC.

anovikov• 14 years ago

Same here. I'm not American, but i also mention a drastic lack of desire of my generation (late X or early Y depending on who you ask) to own a house or a car vc. earlier ones. I bought an apartment only when i could save of one in one year and buy in cash, and only recently bought a car (also within a couple months of income) only because of moving to a place with little public transport.

This has nothing to do with economy, this is behavioral change. Freedom in all forms is the thing we value most of all and ready to spend a lot of money for, and houses and cars have negative value in this respect, they bind you.

bsphil2• 14 years ago

>live in New York City

MYSTERY SOLVED.

Of course you don't want to own a car in NYC.

snowwrestler2• 14 years ago

I own a beater car even though I could pay cash a new car if I wanted to. One reason is that cars are expenses, not assets, so there is no reason to spend more than you have to for the transportation it provides. Spending money on a nice car is just about one of the worst financial decisions you can make.

The other reason I own a beater is that I live near a major city and can take public transit to and from work. If my car is going to sit in front of my house most of the time, why pay for a nice one?

Public transportation is much better near cities, and the Millenial generation is the most city-bound American generation ever. Americans in general are migrating to cities, and young people more than most. I think the article grossly underplays the importance of this demographic trend.

I would bet this is a major factor in declining car ownership, AND home ownership--since it is so much easier to find reasonable rent near a city. In small towns and even many suburbs, there are typically few rentals, so you have to purchase if you want to live there. Real estate tends to be more affordable there too.

apendleton• 14 years ago

> I doubt that most people who felt financially secure and could afford a new car wouldn't want to own a new car.

Not that this is anything more than anecdata, but in my peer group, this isn't true. I get around by bike and don't own a car, but could afford a new car if I wanted one, and this is true of many of my friends. Ideas stemming from New Urbanism are a pretty big deal in at least a certain sector of our generation; we're much more likely to consciously decide to prioritize proximity to things over cars, and even if we can afford cars, we're (I'd like to think) more mindful of the sustainability consequences of the modes of transportation that we choose than our parents' generation was; further, I have a fifteen-minute commute and don't have to worry about traffic or parking, and it would take a lot for me to be willing to give that up. This is in Washington, DC, but I know people in similar situations in New York, San Francisco, Portland, and Seattle.

rwhitman• 14 years ago

I'm in the demographic that this article is talking about and I nodded my head in agreement to everything they said. My attitudes about lifestyle and my relationship to driving has shaped my value system about new car ownership and home ownership.

When I owned a car it was simply a means to an end and not an identity. A method of getting from one place to another. Living in the city (I've lived in several) the car gets beat to hell, so having a new car is largely impractical without an off-street parking space. I also have absolutely no desire to live in distant cul-de-sac style suburbs, and I'd prefer to walk to the store if I can, even though I'm at the point where I'm thinking about buying a house and raising a family.

So whatever assumptions you're making about minimum wage or driving an older car or walking / biking are not applicable to me, and pretty much anyone in my circle of friends in the demographic which spans both coasts and multiple cities.

ef43• 14 years ago

> Public transportation in most of the U.S. is awful, so I don't see many people choosing that over having your own shiny new car.

Ah, but the shift in housing desirability also plays into this. Those few places in the US that do have great walkability/bikeability/public transit are booming and in huge demand.

I think many young people do aspire to walk and bike everywhere, which is why they aspire to be able to live in vibrant, much-denser-than-suburban environments. That this is true is obvious when you compare housing prices. People pay a huge premium for it.

Biking almost everywhere is awesome if you're fortunate enough to live in a place that makes it safe and convenient to do so. I take trips by bike at least four times more often than by car, purely by choice since I own both.

When we visit family out in more typical America, my young son gets frustrated by so much time spent in a car seat. He's "spoiled" by always being able to interact much more with his surroundings, whether walking, in his stroller, or on my bike with me.

bsphil2• 14 years ago

>If you can afford little, you might as well have as much fun as you can, especially if your prospects for making more money in the near future aren't that good.

Not enough people understand this concept, and it's been documented from at least the Great Depression from what I'm aware of.

pasbesoin• 14 years ago

U.S. context: In aggregate the "last generation(s)" chose to spend their money abroad and on themselves (e.g. foreign-produced consumer goods), rather than on the next generation (e.g. infrastructure, education, living wage, healthcare). Witness the result.

Certain sectors of the economy are doing well. The aggregate economy is tanking.

Individuals will find their way, more or less effectively. The lauded "U.S.A." may well not remain what their parents envisioned -- probably quite often really in turn that generation's parents' vision assumed whole by those children and presumed, without much critical thought, to somehow be "inviolate", no matter their (those children, the current generation's parents) own personal actions.

shalmanese• 14 years ago

Living in the Mission, Zipcar hasn't cut it for me but Lyft has changed my world! I initially was stoked by Zipcar but there's virtually nowhere in SF you want to go to where parking is not a major issue.

With Lyft, they're brought the prices down enough so that I'm no longer thinking "can I afford to go there", lyfts become an impulse purchase. Mission to Soma is like, $6 - $8. Mission to Richmond is $15, Mission to Chinatown is $12 or so. If you're going with 2 or 3 friends, then it's basically about the same price as public transit.

Disclaimer: I'm friends with several of the Zimride staff but I'd equally be a fan, even if I weren't.

carsongross• 14 years ago

Cheapest Generation?

How about poorest generation. Wages are stagnant and down in real terms. Debt burden out of the gates (thanks to educational loans) are through the roof. Social norms around employment security have collapsed. Returns in the stock market have been flat to down their entire sentient lives. They've seen home purchases wreck the financies of their parents (and especially their X-er older siblings who bought at the peak.)

Oh, and under/unemployment is running over 50% for under-30's.

I don't know, Atlantic, maybe that little recession thing we were told was over has something to do with it.

ilamont• 14 years ago

I wish they had sliced and diced the data more. How do these generalizations hold up among:

- Millennials with children

- Millennials living in rural areas vs those in the cities

- Millennials with college educations

- Nonwhite Millennials

padobson• 14 years ago

I found the analysis of the importance of smartphones over vehicles to be very interesting.

I pay $150 month for my family talk, text, and data plan, plus another $50 for high speed internet into my house. The payment on my car is $207 a month (own, not lease).

I probably spend another $2k-$4k a year on other piece of technology, while doing the bare minimum to keep my car running.

And I live in the suburbs in the midwest. I bet HNers in cities have a much stronger bias towards personal technology than personal transportation.

khuey• 14 years ago

And how much does registration/insurance/gas for your car run per year?

nollidge• 14 years ago

I don't think the article puts enough emphasis on gas prices driving car sales. When I first started driving in 1999-2000, gas prices were under $2.00 USD. When I fill up at lunch today, it'll be around $3.89.

comicjk• 14 years ago

> the share of young people getting their first mortgage between 2009 and 2011 is half what it was just 10 years ago

I would like to explain to the author, very slowly and carefully, that something happened in 2008 which made banks a bit more wary of lending to people they would call "subprime." I tried to get a mortgage this spring and failed, even with a good income and 35% down payment.

api12• 14 years ago

Myself and many other "millennials" are very reluctant to "buy" such things because they can't.

What we can do is go into massive, enslaving, soul-crushing debt for them, something the smart ones are justifiably reluctant to do.

Real estate hyperinflation is particularly bad. A house is unthinkable to anyone under 40 unless:

a) they've had a liquidity event, inherited money, or have a big trust fund.

b) they are willing to live in bumscrew nowhere or the ghetto.

c) they are willing to go into soul-crushing debt with the very real threat of being rendered underwater and thus permanently shackled to that house without bankruptcy or a short sale.

Screw that. Screw it all. Turn on, tune in, drop out.

Swizec3• 14 years ago

I should send this comment to my parents and grandparents the next time they berate me about why I'm not planning on owning a home any time soon and would rather rent and/or mooch off them for as long as possible.

api12• 14 years ago

Send them the median income / home value ratios too.

I think the boomers qualify as the most irresponsible generation in history, especially in the USA. Now half of them have no retirement savings and are getting old, fast. Guess who's going to pay for it.

will_work4tears2• 14 years ago

I'm under 40 and own a house.

a.) Nope, none of those. Two incomes though, of which combined is higher than the median, but not by that much... b.) Not quite the ghetto, though some would say all of Tacoma is the ghetto. Still, there are much, much worse areas around here. c.) Not soul crushing. We pay about 1400/mo for our mortgage, which isn't much more than rent around here. (we had a small two bedroom apartment for 750, so it is possible to go cheaper though)

runako2• 14 years ago

Or d) they are willing to move out of the top 5-10 mostly coastal real estate markets. For instance, tech hub Austin, TX has a median home price of $122k. The payment on that will be around $1k-$1100/mo including taxes etc. You'll find very similar numbers in places like Atlanta, Houston, Dallas, Raleigh, etc.

jseliger• 14 years ago

The basic problem with coastal markets (and a few inland ones) is that building regulation has messed up the housing market by making it impossible to build enough to meet demand, as Matt Yglesias describes in The Rent is Too Damn High and Edward Gleaser describes in The Triumph of the City.

api12• 14 years ago

That's a valid point, but I didn't know there were any tech hubs or otherwise interesting places with jobs that had house prices like that. That is lower than small Midwestern cities with lousier economies. Why is housing so affordable in Texas? Lack of stupid regulations? Loads of land?

TheFuture3• 14 years ago

Every market is different, but there is a lot of housing supply in most of the US, prices are depressed and lending rates are the lowest they'll probably ever be in our lifetime.

I have a couple friends (from our generation) who are buying up duplexes. They can live upstairs and rent the lower and nearly cover their mortgage from the rent income. They are living for free and banking the savings for the down-payment on the next duplex.

Seems incredibly smart to me. You have a generation of people who've convinced themselves not to buy a house, driving up rents and driving down home prices. You can borrow money for next to free to buy those assets and rent them.

Even if you don't want to be a landlord, you can get a mortgage payment that is less than rent. Sure you have debt, but rent is just burning money every month. Even if your home declines in value, it probably won't lose as much value as you'd have paid in rent, so you're basically breaking even.

npsimons2• 14 years ago

“I don’t believe that young buyers don’t care about owning a car,” says John McFarland, GM’s 31-year-old manager of global strategic marketing. “We just think nobody truly understands them yet.”

I'll give him this: at least he's not blaming his customers or the market, unlike some other industries I could name. I just wonder what he will do if when he "understands them" he will have figured out that they don't care about owning a car.

seiji• 14 years ago

How can we reconcile "everybody is poor now" with all the teenage millionaires and 22 year olds moving to California for six figure salaries?

Is everything we read here such an extreme case that the rest of the world has no chance of catching up or competing (except in the überextreme sport of Startup)?

uncoder0• 14 years ago

Sounds accurate.

ahoyhere4• 14 years ago

It all makes sense when you realize that tech/startup media is Cosmo and People for nerds.

k2enemy• 14 years ago

Pretty sloppy reporting all around. They aren't even looking at the correct statistics to address the hypothesis.

The article cites the percent of new car sales that were from 21 to 34 year olds in 1985 versus 2010 and find that it falls. What they really want to look at is the percent of 21 to 34 year olds that buy cars. You could have an increasing percent of young people buying cars AND a fall in the percent of car sales driven by young people if young people are making up a smaller proportion of the car buying demographic. Indeed, 21 to 34 year olds make up a smaller proportion of the general U.S. population in 2010 than in 1990 (http://www.censusscope.org/us/chart_age.html). It probably isn't enough to reverse their result, but it soaks up some of the claimed behavior.

They make the same type of mistake looking at the percent of teens with a license. Well, 13-15 can't even have a license, so what is happening to the age distribution within "teens"?

Then you have all of the other causal effects that other commenters address. I've come to expect this type of thing from the Atlantic blog posts, so I was surprised to see that this was a magazine article.

pjungwir• 14 years ago

Although I'm sure most of this effect is due to the economy and student loans, I wonder how much of it comes from people having children later and less often. Doing without a car or home becomes trickier once you have kids. I was disappointed the article didn't bring up children at all, because I'd be curious to hear something on it one way or the other.

dredmorbius4• 14 years ago

The difference between Gen Y / Millennials, and Gen X, is that the younger generation is taking a hard look at the big consumer purchases and deciding that they're either not worth it, or are simply unaffordable.

Gen X matured into a world not quite as harsh, but generally took on huge amounts of debt to fund first school (not quite so much as current students), vehicles, homes, and marriages. Only to be hit by multiple periods of very uncertain economic times (recessions in 1989-92, 2001, 2007-2009), each of which was followed by increasingly weak recoveries. The early 1990s recovery not really picking up steam until 1995-6, the 2000s in 2005-6, and the most recent recession still not really over.

In the early 1990s, it was popular to call Gen X the "slacker generation", which I suspect was largely due to the economic conditions of the time. A few years later, they were the dot-com generation, beavering away in the first generation of Internet start-ups.

The 2000s are already being called a "lost decade". The 2010s are well on their way to much of the same. Some sectors, notably tech, have been countertrending, which may affect YC/HN impressions. But overall, economic trends have been downward.

greedo• 14 years ago

Amidst all the arguments about whether or not it's due to the economy, the truth is really that all decisions like this are economically based; the real question is whether the trends created and influenced by the economic downturn will persist after the economy recovers.

malandrew• 14 years ago

This paragraph in the article seems off:

   Education is the “obvious outlet for the money Millennials can spend,” Perry Wong, 
   the director of research at the Milken Institute, told us, noting that if young 
   people invest less in physical things like houses, they’ll have more to invest 
   in themselves. “In the past, housing was the main vehicle for investment, but 
   education is also a vehicle.” In an ideas economy, up-to-date knowledge could 
   be a more nimble and valuable asset than a house.

I don't buy this at all. I think he may be right about Millenials investing in themselves, but I think he's wrong about it being money. Millenials are generally internet natives. They don't need to spend money on self improvement, just time, because so many educational resources are free and readily available on the internet and the quality of those resources is only improving with time.

The Cheapest Generation

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