Robert Reich explains why millennials have no money and his four reasons are quite convincing
Robert Reich, professor and former U.S. Secretary of Labor, unravels the cause of millennials becoming the first generation victims of inflation and skimpy wages. The expert, who identified himself as a baby boomer, explained how the driving forces of the economy are creating a “vast generational wealth gap” between his generation and the one that followed– millennials. This generation is characterized by adults born between 1981 and 1996, known to be tech-savvy and with a strong sense of community. Well, Reich, who goes by @RBReich on YouTube, says millennials are more likely to live in poverty or debt, and half as likely to own a home ever. The odds seem stacked against the generation, and the expert knows why.
Reich noted four important reasons why millennials are suffering in this economy. For the first reason, he explained how wages or salaries have grown over the years. “Stagnant wages” are the primary problem. Between 2007 to 2017, only a 0.3% increase in median ages was observed annually. This was at a time when millennials were early in their careers, with the impact of the Great Recession included. In contrast, wages grew three times that rate between the mid-1980s and mid-1990s.
Secondly, it’s no surprise that living costs are shooting through the roof, all while millennials survive on stagnant wages. The costs of essentials like housing and education have reached unprecedented highs. “The average college education in 2018 cost nearly three times what it did in 1978,” he said. Meanwhile, the generation lacks the means or money to own homes, something historically done in America to build wealth. The consequence becomes debt– the third reason why millennials have no money to spare. An average graduate bears the burden of $28,000 in student loan debt due to expensive college tuition.
“As a generation, millennials are more than one trillion dollars in the red,” Reich highlighted, in addition to thousands of dollars in credit card debt. Finally, savings is another reason that has stagnated the growth of wealth among millennials. Fewer and fewer individuals can save enough money, if any at all, and it is linked with corporate greed to an extent. Reich quoted a survey that listed only 81 companies out of the Fortune 500 companies that sponsored a pension plan in 2017. Two decades ago, the tally was at 288 companies looking ahead of their employees with pension schemes. “Employers are replacing pensions with, essentially, do-it-yourself savings plans,” the 78-year-old expert admitted.
Listing down the chilling consequences that overshadow millennials and their quality of life, Reich predicted that the generation will have to work tirelessly even after the average retirement age, 75. Encouraging people in power to bridge the wealth gap, Reich proposed policies that offer debt relief, accessible health insurance, affordable housing, and an equitable tax code for renters. If not, most young adults today will struggle to lead a quality life in the future.
With housing costs being a major concern, a report by Forbes sheds light on what is causing the surge in prices. In most urban areas, investors pocket several houses for personal profit through rent, thus causing a housing shortage. There is a stark inequality between houses sold and houses put up for sale. This competition is created to the benefit of the real estate industry, bringing demand to construct more buildings and houses.
You can follow @RBReich on YouTube for more videos.