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35% of young adult men in America now live with their parents (self.TheRedPill)

submitted by wolololololololo

http://money.cnn.com/2016/07/18/news/economy/nba-player-jeff-teague-live-with-parents/index.html

http://www.pewsocialtrends.org/2016/05/24/for-first-time-in-modern-era-living-with-parents-edges-out-other-living-arrangements-for-18-to-34-year-olds/

"So many people know someone who has moved back in with their parents. Any stigma that used to exist isn't there anymore," says Kim Parker, director of social trends research at Pew.

The "live at home" trend is especially popular among men under 35. A whopping 35% of young adult men in America now live with their parent(s), versus just 29% of young women. Young men are delaying marriage and all the usual trappings that come with it like home buying and kids. The main reason? Money, or the lack of it.

"Men who don't have jobs are much more likely to live at home," says Parker, and "men without jobs are much less likely to be married."

I see that last paragraph as being the most important point. As more and more men are squeezed out of an ever shrinking job market, or a market more geared towards women friendly jobs, more and more men will stay at home and not get married.

Funnily, it is still lower for young women living at home at 29% 35vs . More often having that partner to lean on, generall richer and older? Or having access to high paying jobs when youger? Yet still we hear about this wage gap and male priviledge. This also means the 'dateable' man pool gets smaller and smaller as well. (Unless they're the hot bad boy and all they do is work out and sponge of the parents,but then its really a fuckbuddy thing). No income, no moving out, no marriage, no kids, goodbye natural birth rate, hello immigration replacement to keep the pension ponzi going.


[–][deleted] 279 points280 points  (113 children)

A few things to note. Young people this era have much higher costs of everything than our parents and grandparents ever had. Housing in some parts of the country is 4 times the cost as it was 25 years ago. Most of my dad's friends bought homes when they were under $110,000 and now they are all $450k+. These middle aged men could not afford to buy the homes they have lived in for 25-30 years with the jobs they currently have.

Houses in my area are being bought by married couples who both partners are professionals so their household income is $120k+. I had a few friends that were saving money from the time they got out of high school and were able to buy a house for very low prices immediately after the crash in 2007.

Everything is much more expensive. Food costs significantly more, health care is a few multiples of what it was 25 years ago. My health insurance is $220 per month. 30 years ago comparable insurance was somewhere around $30-$40 per month. A weekly food budget of $100 today has a comparable spending power to about $30 did in 1991.

Also note. Saving money for a house is next to impossible because your money gains almost nothing year to year. With absolutely no financial literacy, just putting money in the bank, people could get 10-16% interest in the 1980's with some people briefly getting 19%. Save $100 and a year later it will be worth $115. Now if you save $100 a year later it will be worth $101. To really make it sound fucked, in order to make $1000 per year in interest, at 15% you just need a little under $7000 in the bank, and at the peak interest of 19% you just needed a little over $5000. Regular simps actually made this sort of interest just by putting their money in the bank. But today to make $1000 per year in interest you need anywhere from $95,000 to $110,000 in the bank.

Really extrapolate this out. The annual income in the 1980s was about $16,000 per year. If someone had $112,000 in the bank they would make enough on interest that would be equivalent to the average working person's annual pay. They could literally retire as their interest made them enough money they did not have to work. It was possible, and many people did this where they would work to get enough money in the bank and then have the interest cover their mortgage. This did not require any risk as everything was FDIC insured and did not require any sort of financial decision making other than putting money in a bank and keeping it there. Today this value is about $53,000. In order to make $53,000 at bank interest you need well over $5 million in the bank.

So working comparable jobs makes considerably less money, there are jobs which paid $10 per hour in 1991 that pay maybe $12-$13 per hour today. The basic costs are all much higher (food, energy, healthcare, insurance, education). Taxes are considerably higher on certain things (sales tax has gone up across the board). Saving your money in a bank offers almost no upside as interest rates are so incredibly small so gaining wealth via simple savings is much more difficult.

There needs to be an economic correction. It is inevitable. That which goes on forever will eventually stop.

[–]trancedj 54 points55 points  (18 children)

"There needs to be an economic correction."

An old time friend of the family has been talking about this. He calls it an "adjustment period."

Can you elaborate on this? What would a correction look like? A depression?

Great post btw.

[–]ARUKET 69 points70 points  (4 children)

The federal reserve has been propping up this phony economy for a long term, and by letting the market do its job, there would be a crash but likely recovery within a few years

[–]johnnygeeksheek 7 points8 points  (3 children)

I wonder if Yellen will let the bubble pop if Trump wins.

[–]BlackCombos 19 points20 points  (5 children)

As someone who is only economically literate in the most loose sense of the term I tend to believe the strength of the middle class prior to the start of this century was likely the exception, not the rule. For example the interest rates being talked about above occurred in basically a 4 year period from 79-83, although interest rates from the 70s to 00s were much higher than they are now, outside of that ultra high peak something around 5-8% was more typical and further those are all treasury bond interest rates, not the more useful liquid interest rates your bank offers on savings accounts (which are so low that you can essentially wholesale discount them).

Treasury bond interest rates are so low right now because they are set by the Fed and (according to the Fed, they certainly know better than I, but I'm sure you'll get a spectrum of opinions) that is an intentional strategy to moderate the US economy, which some may argue has been working fairly well, even counting the crash in '08 the US economy has essentially become continuously more stable overall since the Fed's inception.

The bigger issue would be the loss of effective financial instruments for people in the lower and middle class, which has an outsized impact on young people (as there are proportionally fewer upper class young people, for obvious reasons). I don't think there are many people that would claim that saving 8x the median income (in 2016 dollars that would be around $400,000) should qualify you to make a stable exit from the workforce, the impacts to the total base of US labor would be catastrophic if that were the case.

A large dimension of the discussion has been moving from a resource unlimited to a resource limited economy throughout the world. Global land utilization, rare mineral utilization, various fuel utilization is relatively high as a percentage of those resources on offer, which is a decidedly new phenomena of globalization. Economic expansion is more focused on innovation than capturing resources now - for instance real estate as it pertains to land is zero sum, the only way to capture value from real estate is to make the existing land more valuable by building something there or by going and finding some land nobody owns yet. Obviously we can't do the second one any longer, but we see the same phenomena happening with things like oil, where there aren't massive cheap oil deposits being stumbled upon anymore.

A lot of the "easy" innovation to capture has been captured, the next step (in my, again, economically stupid by a lot of people's measure, head) is to leverage the global workforce via improved skilled labor participation. We have 7 billion people on Earth and only a tiny fraction of them are involved in fields where their brain is what qualifies them (as opposed to their physical labor). A lot of the technological explosion over the last century could be cast in the light of the population explosion over same, and improved communication providing a better "social network" of intelligence to apply to problems. Computational tools continue that fight but until the Nerd Rapture (aka singularity) hits we will need to continue to feed the economy - on some fundamental level, with raw human grey matter.

Edit: to kind of head of what some people are saying here, I don't really think we should be laying this at the feet of the older generations. Some of the issues that have arisen from the modern economic alignment would have taken a crystal ball to predict, and although the 40+ voting block is still massive and strong, it is hard to complain when the 18-39 voting block barely ever shows up to the polls or produces attractive political thinkers.

And free trade is a touchy subject - yes it hurts the US economy, but it is a massive boon to the global economy, which ends up raising QoL back in the US (our lives would be shittier if there was no free trade, but life in other countries would be comparatively much much shittier) so come down on that issue where you will.

[–]Shanguerrilla 4 points5 points  (1 child)

I really think you laid that out great, expounded well on some important points and offered what I think a big key to the cause and solution. The only way I differ from your brief exposition, is I think the FED is near criminally inept.

[–][deleted] 10 points11 points  (3 children)

Probably "The Greatest Depression".

If you look at the amount of debt today. People focus on public debt which is catastrophic enough in most developed economies, but the private debt is all far more severe. You also have to consider the dodgy financial instruments or derivatives that might number $10 or $100 to every $1 of debt. That's why subprime crashed the economy. Everyone looked at the bad sub prime and was preparing for a $200 billion loss but in reality there were $6 of derivatives for every $1 of bad debt. So it ended up being a $1.2 trillion crisis.

Just Deutsche bank has more derivatives on its books than the GDP of the entire global economy.

So you have all this bad debt - the central banks started printing money and slashed interest rates. Most of this money they created went into speculation and driving up asset prices and share buy backs. The central banks can't stop because if they didn't prop asset prices up then a lot of what the banks have on their balance sheets would be worth pennies on the dollar.

With this level of debt, putting interest rates up would be catastrophic because repayments at these interest rates are just about possible. What happens when interest rates go up to 20%? Mass default. Which would lead to debt deflation.

Another thing that also accompanied the great depression was productivity shock. Enormous amounts of labour had been automated in the 20 years before the great depression. Especially in agriculture. Its no wonder there was severe unemployment during the depression. Now we are going to see a lot of jobs automated by robots over the next 20 years.

[–]absoluteskeptic 15 points16 points  (3 children)

people could get 10-16% interest in the 1980's with some people briefly getting 19%

It was a 10 year period where rates were above 8%, and a 3 year period where they were above 12%. BTW, those rates weren't a good thing. They indicated the economy was in turmoil, and there was a lot of uncertainty.

The difference today is people have accepted low rates. It's fairly easy to move to an online bank with better rates, if more people did that then banks would be forced to raise rates, rinse and repeat. The only problem is people are lazy and have multiple accounts at one institution (broker, mortgage, credit card, bank account, 401k), so most accept the low rates because of the ATM network and other such nonsense. Add in low Fed interest rates and QE. It's great for borrowers, if you can borrow.

Lots of little things are either free or so cheap, it may as well be. Electronics. My 4th grade teacher showed off his $350 calculator (today it would cost $1000). You can buy one at the dollar store ($1) or it comes free with a phone. Air conditioning. Equipment and running costs have come down so much. It's helped (really, the main reason) for the South and West to get such migration from the East and Midwest. Every car has it, every home has it. Clothes. My mom would make her own clothes (as did many), it was really expensive to were nice fashions. Today, I don't know of anyone who knows how to sew. People buy clothes to last a few months, not several years or more. In addition, clothes materials are quality are much better today. Food is basically the same price, but the shopping experience is completely different. Fresh Veggies available year round, three times the variety, too. Home delivery and can order by the internet. Can get through the check out in less than 5 minutes (it took up to 20 minutes back then, price checks, no bar codes). Can't pay with cash? You need to have an approved account with the supermarket to use your personal checks. Convenience stores open 24 hours, supermarkets open 24 hours, ATMs open 24 hours, automatic bridge/toll systems for drivers. Computers and electric keyboards, plus dead cheap cameras: you could make a movie by yourself cheaper and better quality than what was often made in 1979. You can now record and album for almost free at home. Free long distance phone calls (used to cost $3 a minute for my dad, $10 in today's money). A incredibly safe and reliable car can be had for $15,000 today with much higher quality and about the same cost.

The list goes on, but nobody today thinks of spending nearly $1,000 on a calculator. People vacation in Hawaii or Mexico, not the campsite 5 hours from home (unless you are into camping). The big craze today is PokemonGo, an augmented reality smartphone game that connects you with cloud servers, Japanese inspired animation, businesses doing advertising, social networks, and the NSA (a person in the 70's would have no idea what that sentence meant, it may as well not been in English). In the 70's the big craze was the pet rock. 'Nough said.

[–]BioshockBrah 44 points45 points  (60 children)

Basically, the Millennial generation is fucked.

I'm 30 and I live at home. I make 10/h. Almost done getting my AS in Accounting, although that will probably be worthless in the job market.

Literally every day, I'm depressed and in the back of my mind, suicide is there. At some point, life just won't be worth living in comparison how my parents lived back in the day.

[–]Johndoesmith67 23 points24 points  (23 children)

Cooler heads have always prevailed. Suicide is never the answer. Coming from a 21 year old working for corporate electric. Find away to make bank as an accountant. Become a CPA, do taxes on a consulting basis so you pay yourself first.

[–]BioshockBrah 17 points18 points  (19 children)

To become a CPA, you need a Bachelors, then a Masters, then you can take the CPA exam to get your CPA. I'm not that smart to be honest.

[–]MustBeNice 8 points9 points  (4 children)

Just wanted to say good for you man. It's never too late to go back to college. You're already halfway to getting your bachelor's degree & from there you'll be able to re-enter the workforce to make twice what you're making now. Then from there it's merely another 2 years for your master's. Don't sell yourself short, I just graduated from a very respectable university in California, and tbh, a lot of my community college classes were just as difficult as the university ones.

30 is the new 20, and pretty soon you'll be on your way up and out

[–]Ifuckinglovepron 18 points19 points  (1 child)

There needs to be an economic correction. It is inevitable. That which goes on forever will eventually stop.

I really hate to break it to you, but we are in the correction period. The 1950's through the 1980's was the fluke. It is all going back to the normal of human history now.

[–]dabrah1 5 points6 points  (0 children)

This should be upvoted more. The US economy was so great from the 1950s to the 1990s because the rest of the world basically had to rebuild its infrastructure and economic systems after world war 2. We had virtually no competition. Things are indeed back to where they should be, and where there going to stay.