Editor’s note: This is a lightly edited transcript of the accompanying video from professor Peter St. Onge.
America’s Hometown Newspaper finally noticed young Americans are screwed.
A few days ago, USA Today wrote an article asking why millennials and Gen Z are “spiraling, partying hard, and blowing their savings.”
I’ve mentioned in previous videos how young Americans are doom-spending their way to financial oblivion amid low-paying jobs, a half-decade of transitory inflation, and half-a-million dollars for a starter home.
USA Today quotes twentysomethings admitting there are no jobs and they can’t save any money but they’re “just kind of letting the days go by, bouncing from job to job, partying, and just kind of acting like everything will work out.”
As a Washington Post editor puts it, millennials and Gen Z are just “embracing an ethos of chaos.”
Alas, it’s not chaos; it’s despair.
Recently, the National Association of Colleges reported that starting salaries for new college grads are $68,000. That sounds good, but after Bidenflation, it’s about $50,000 in pre-pandemic terms.
Keep in mind, to get that $50,000, you’ve got to take on, according to a new study, $300,000 in debt for the average bachelor’s degree.
That comes to four-and-a-half years’ salary at $68,000. Assuming you don’t spend a dime.
It’s also $30,000 less than college students expected during school, according to CNBC, suggesting colleges are intentionally inflating expectations to sucker them in.
Of course, it was a whole different world for the baby boomers chucking at the chaos.
In 1970, starting salaries for college grads, adjusting for inflation to convert to today’s dollars, were $83,000.
In other words, they’re actually down in 55 years. We’re going backward.
Meanwhile, college in 1970 cost $1,240 per year—this was before government got into the student loan game.
Adjusting for inflation, that’s about eight times cheaper than today.
In other words, in 1970, it cost you a half-year salary for the entire bachelor’s degree. Now, it’s almost five years’ salary.
Meanwhile, of course, the price of homes—the main vehicle for Americans to build their life savings and to start a family—have become a joke for the young.
According to the Federal Reserve, the median house now costs $412,000, which is seven-and-a-half times that college graduate’s starting wage. It’s more like 15 times the average salary of a blue-collar worker.
In 1970, the median home cost $24,000, which was two-and-a-half times the starting wage for a college grad and closer to five times blue-collar wages.
So, wages are down. College costs nine times more. And houses cost between seven-and-a-half and 15 times annual salary.
Forget embracing chaos, the chaos is embracing them.
So, what’s next?
The USA Today article, helpfully, provides a solution: mental health counseling. Not a joke.
Some more useful solutions might include slashing government spending so inflation stops and there’s some money left over for small businesses to create full-time jobs instead of gig work.
Lower inflation means lower interest rates, which lowers housing costs.
And getting government out of college loans would bring prices back in line with the boomer utopia they broke.
We’re setting up the next generation to fail. Few of them understand what’s even happening. Instead, they vote for media-approved soundbites while partying their way to financial oblivion.
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