A few days ago I stumbled across this article on NPR, “Why Aren’t Millennials Spending? They’re Poorer Than Previous Generations, Fed Says”. It’s obvious to almost everyone that Millennials are not spending like previous generations, but because they’re poorer? Really? Have you seen college housing lately?
A seismic shift in the economy occurs every few generations and we are standing right now on the fault line. Economies evolve. Simplistically, agrarian gave way to industrial, which then morphed into a consumeristic culture gradually revolving around service and then technology. It seems difficult to comprehend, but we will evolve from consumerism.
Over the past twenty years, the solution to a weak economy has been to stimulate spending. Binary. Extend an incentive = consume. Consuming is good, not consuming is bad. It’s been a binary relationship because frankly, we’ve been consumed with consuming. That’s what we
How we consume (and obviously there will always be consumption) is what’s being transformed and its reverberations will extend well beyond our current economic thoughts. Why own a car if you can Uber? That was quick. If you’re investing, running a business or dependent on a consumeristic culture in any way, you need to take notice. The Federal Reserve will eventually be called on again to incentivize consumers (as well as Congress via fiscal policy), and their results will have limited effectiveness versus past campaigns. Keep this on your radar.
In 1973, you could buy a six-pack of Pabst for a dollar. Today’s “broke” Millennial doesn’t seem to have a problem forking over $6 for each pint. That is transformation. It’s not an isolated example. ‘Consumers’ are choosing quality, they’re simplifying their lives, they’re focusing on experiences over things and are evolving. Quickly. If this is what the Millennial generation is doing, maybe they’re actually richer than previous generations.
Thank you for reading