Among the more ridiculous assertions being bandied about these days is one that touts the Millennial generation as working hard to save the country because, as a demographic group, it tends to spend more than it earns.
This has been heard in various places lately. A report in The Fiscal Times said this generation, roughly described as people born in the 1980s and '90s, as "helping to jump start the economy in ways that their more fiscally conservative boomer parents are not." The same publication quoted the chief strategy officer for The Center for Generational Kinetics as saying, "When we look at the luxury market, Millennials are the growth engine going forward."
Except, of course, that they can't afford the items they are buying. If this is the engine to move the economy forward, it looks suspiciously similar to the engine that rode it to ruin only a few years ago by leveraging assets that were overvalued. Any benefits to the economy from such spending will be short-lived. A nation plagued by unsecured debts is hardly in a position to move forward.
Yet that describes many Millennials, according to recent reports. Forbes.com said earlier this month there are 79 million members of this generation, and a majority of them are either out of work, underpaid or saddled with debt from student loans. Bankrate.com says fully 25 percent of them owe more than they have in savings. Virtually all of them (94 percent) graduate college with debt. Added to this, young people have a much higher unemployment rate than the older generation.
When their debts are examined, the situation looks even worse. Those who are college students, and thus still unemployed, spend on average $784 a month on discretionary things such as food and entertainment, according to the Mooslyvania marketing agency. They buy a lot of electronic gadgets and fancy clothes, and they are spending increasing amounts on jewelry. Many of them consider items their parents thought of as luxuries to be necessities. If there are two words to describe the attitudes many of them have toward purchases, they would be "instant gratification."
A lot of experts are trying to understand this trend. One, Donna Sabino of IpsosOTX MediaCT, attributed it to the uncertainty of the times. "They grew up in a time of insecurity, with 9/11 and banks cheating people," she said.
That sounds plausible until you consider that the same uncertainties plagued young people during the Great Depression, when many banks failed and worldwide uncertainties gave rise to the extremist philosophies that eventually plunged the world into war. That generation was noted for its frugality.
The truth is there are no convenient excuses for overspending on consumer items, even if the Internet and social media make young people feel pressured to buy the latest and greatest things. If anything, parents of Millennials who, according to Vibrant Nation, tend to pay for many of their grown children's excesses (59 percent of mothers pay for a Millennial child's cellphone, for instance) are part of the problem.14 comments on this story
USA Today reported last month on the dismal state of financial literacy among the younger generation, which it said would have long-term consequences for those people as well as society. Social programs, for instance, will be burdened with caring for those whose credit runs out and who lose the means to support themselves.
Utah is one of many states that requires financial literacy courses for high school students. That is commendable, but more must be done. In many cases, parents have to assume a greater responsibility to teach valuable lessons before their children pursue lives of misery.