It is a known fact that Millennials are broke and dependent on their parents for help. According to a recent survey, over fifty percent of parents are sacrificing or have sacrificed their retirement to help their adult children:
As young Americans drown in debt, growing numbers of parents have been footing the bill for their kids’ car insurance, cell phone bills, health care costs and debt payments – often at the expense of their own retirement.
A new survey from Bankrate.com reveals that 50% of American parents say they have sacrificed or are sacrificing their own retirement savings in order to help their adult children financially.
The survey asked at what age Americans think people should start paying for their own bills. According to Bankrate, “Most of the results dovetailed the traditional mindset that 18 is the golden age of adulthood — except when it came to big-ticket items.”
Car payments and insurance, cell phone bills, subscription services, travel costs and credit card bills all had the majority of total respondents saying that individuals between 18 to 19 years old should be paying for these bills themselves.
For example, the average age respondents expect individuals to start paying for their cell phone bill was 19 years old. Younger generations, or Gen Z and millennials, both said that age should be 20; Gen X and the silent generation said 19, while Boomers said 18. -Bankrate
Meanwhile, a March 2019 Bankrate survey found that more than 1 in 5 working Americans aren’t saving any money for retirement, emergencies or other financial goals, according to the report.
The result is that Americans are also working longer – with 25% of the workforce projected to be 55 or older by 2024, according to the Bureau of Labor Statistics.
Why is the happening?
Bankrate’s senior economic analyst Mark Hamrick suggests that there are a variety of reasons parents feel compelled to help their adult children – and not all of them include spoiling them.
“This is for better and worse the new normal because of the evolving approaches parents have taken to raising their children,” says Hamrick. “And it’s a result of some of the ongoing financial challenges that many families face, some of which were caused by the financial crisis and the Great Recession.”
A lack of substantial wage growth is also a factor, though recent gains are a “relatively modern phenomenon.”
“It’s doing very little to recapture the lost gains in the earlier economic expansion that’s approaching the 10 year anniversary,” says Hamrick.
Other culprits include the rising cost of education and the rising popularity of higher degrees.
“This is the ironic, unintended expense of people staying in school longer,” Hamrick says. “The way young people come of age has changed somewhat over the past 50 years or even longer — there’s no longer a sense of immediate need for young people to enter the workforce, even on a part-time basis.”
And when you’re not working, you can’t pay the bills — that’s where Mom and Dad come in. -Bankrate
It is easy to blame millennials for not saving money, for parents being too doting on their adult children, or to say that people should work harder and spend less. All of these things are true to a certain point, as they all have contributed to the current situation with Millennials and work.
However, the fundamental premise of this is a severe reality, which is that the recession of 2007 never ended. Since it is 2019, this means that it has been going on for twelve years now, which is not a recession, but a long-term stagnation followed by a slow and continual decline without any fundamental changes to the process. There have been intermittent periods of prosperity, but the fundamentals have not changed for the economy, and while there are some who do very well and are able to secure and maintain good-paying and stable work, this is increasingly not so for most people. It does not matter if one possesses or does not possess a degree, or many times how many skills one has, because the fundamentals of the economy itself are changing. There is plenty of work to be done, but American workers either have their work outsourced to foreign lands, are forced to compete for a smaller pool of available work opportunities with declining salaries in a market intentionally flooded by an abundance of domestic and foreign workers, or due to employer policies are not able to be sure of the stability of their work to justify a long-term investment into a home, especially since many of them are strapped with debt that they cannot discharge through bankruptcy in the form of student loans.
The world of the Boomers and much of Generation X is gone. Prices continue their increase as inflation rises through financialization, which increases balance sheet profits for banks and shareholders but as wages are stagnant, results in a decline in the standard of living for the whole nation, affecting the poor and those attempting to start careers, such as young people, the hardest.
Many Millennials from the 2007 recession who graduated university within that period (2006-2008) have never recovered and are unable still to find work, for strapped with debt and few prospects for work, have returned home because they have no other place to go. This is worsened by cultural attitudes towards them which, lacking an understanding of the economic changes or a desire to invest themselves not only financially, but through time and personal effort into helping their children, many feel like ships without a rudder, lost at sea in the economic storms and when sending messages for help receive only in reply “It is your fault, we will not help you.”
Generation Z is not in the same position as the Millennials yet, but there is a trend being set right now that if a major economic downturn were to take place, many of them would be forced into the Millennial position. There is a meme on 4Chan which is called the “21-year-old doomer”, or sometimes just the “doomer” meme, which illustrates the sense of nihilism that reflects in the lives of many:
Shoebat.com has warned that based on current economic patterns, 2019 bears a close semblance to 2003. Four years later in 2007 was when the TARP bailouts happened, and what followed that was the great recession of 2008, all of which was under President Bush.
Based on this pattern, assuming Trump’s re-election (which is likely based on current trends), it would not be a surprise to see serious economic deterioration set in aroudn 2023, followed by a severe recession around 2024.
Gen Z, sometimes called “Zoomers,” are likely going to find themselves in the situation of their Millennial predecessors, as many are following in the same patterns with debt, financialization, and a lack of viable work after graduation that will likely lead to a return home with one’s parents.
However, parents don’t live forever. They will die, and as many Boomers or Gen Xers are already in large amounts of debt, there is little chance of leaving an inheritance to their children, as it will go to service the debts of their creditors.
A nation of people who cannot economically support themselves and which has their means of support stripped from them does not have a bright future, but that of an ever-growing slum with men trying to scrape for pennies in the muck against countless others in the same situation.
The wise man will take note of this now, and will begin making preparations for the future, so that when the inevitable storm does arrive, he will not be caught by surprise and blown away in its winds.