Generation Y and Z Debt

[agcy68]

Its not complicated. Everything costs more and wages are flat. Millennials have gone into extreme debt to make up the difference. At some point it will become unsustainable and the economy will crash. Then we will get another round of boomers and gen Z blaming Millennials. I guess its our fault no matter what

Are wages really flat?

I am also curious how many fresh college graduates try to live within their means? Start their budget from the bottom and work their way up? Not to sound to arrogant, but when I graduated, didn't have internet or cell phones, couldn't afford new/er cars, couldn't afford cable, started with 1950's hand-me-down furniture from my wife's grandparent's attic. Didn't go out to eat and didn't take vacations. Played a lot of cards with friends on Saturday nights or hang out with family.

So, simple question: how many kids have jumped into expenses they really can't afford?

 

[CyCloned]

College has gotten much more expensive in the last decade, there's no doubt about that. But with some work and planning it can be done without accumulating $100k in debt.

Cars have gotten really expensive too. But there sure seemed to be a lot of 4 door four wheel drive pickup trucks in the Wal-Mart parking lot.

 

[Sigmapolis]

Agree. But our society still needs things like doctors, engineers, architects, etc. that require lots of education. Should those professions be reserved only for the rich?

One of my wife's best friends from medical school came from dirt poor nothing in one of the redneck regions of northwestern Florida -- as white trash as it came.

Notice I said medical school -- she is now an MD and practicing physician.

She joined the Air Force and made it through. No debt. Great salary during and after residency. JD Vance from Hillbilly Elegy did the same thing with the Marines to Yale Law.

There are already tons of paths up if one is willing to take them.

 

[agcy68]

Agree. But our society still needs things like doctors, engineers, architects, etc. that require lots of education. Should those professions be reserved only for the rich?

Not at all, but those professions start with much higher salary than others. I would argue that the debt load for those degrees, with support and or working through school, is manageable.

 

[SEIOWA CLONE]

It is ironic then that you are playing right into businesses' hands.

Most of the benefit of higher education, outside of a few technical fields (and even then I have my doubts) is in "signaling" yourself as a smart and employable person.

Even my MD wife has told me that she uses maybe 1% of her undergraduate training and 10% of her medical training at her day-to-day clinical job. Most of what she learned came from what amounts to an apprenticeship as a resident and fellow.

I think any honest person would admit that you learn how to do a job by working. I do not know how teachers and professors (who have rarely been anything but a teacher or professor their whole lives) are going to show you how to do that in a classroom.

With that in mind, throwing more and more money into education...

(1.) Creates a "rat race" of credentials. Education does not create good jobs, but merely controls the distribution of who receives them, and as soon as everybody has a BA, everybody needs an MA to stand out, which throws incredible amounts of time and personal and public money into something that generates a meager social return of just sorting workers.

(2.) All this to ultimately aid businesses in selecting workers which, if you really thought they should bear their own costs, they should be responsible for.

Would your MD wife be able to practice without the degree? Would I be able to teach without the license? For many jobs that piece of paper is needed to actually get the job. It doesn't matter that I use very little of it in my day to day work, without it, I can not get the job.

What jobs can I get today without some sort of education or technical training? Few is any, the days of starting to work at the factory, putting in your 30 years and retiring to the good life is pretty much gone.

The US is becoming a three tiered society. The top 5 to 10%, never have to worry about money for the rest of their life. The next 30 to 40% are living comfortable to a little above. Everyone else is either poor or living pay check to pay check. Average wages rose $ 0.06 last quarter, so 6 cents increase in wages. Current minimum wage is $ 7.25 and hour, if it had kept up with what it was in 1973 it would be over $22.00 dollars an hour.
Medium income in the state of Iowa last year was $58,570 in 2017, so the average family is trying to live and raise a family on $4,900 a month, before taxes. And most business today are paying less and less for insurance each year.
How many people do you do know that are living on one income households, and how are they doing? Today both people are working, and hoping to get along, or are struggling.
And you can talk about record unemployment all you want, but for many Americans, they are working harder, longer hours and their paycheck struggles to pay all the bills.

 

[Bobber]

Agree. But our society still needs things like doctors, engineers, architects, etc. that require lots of education. Should those professions be reserved only for the rich?

You've strayed from my original post quite a bit..

And to answer your questions, you join the military and make that equation work if you can't figure out another way to do it economically...

 

[Bobber]

Would your MD wife be able to practice without the degree? Would I be able to teach without the license? For many jobs that piece of paper is needed to actually get the job. It doesn't matter that I use very little of it in my day to day work, without it, I can not get the job.

What jobs can I get today without some sort of education or technical training? Few is any, the days of starting to work at the factory, putting in your 30 years and retiring to the good life is pretty much gone.

The US is becoming a three tiered society. The top 5 to 10%, never have to worry about money for the rest of their life. The next 30 to 40% are living comfortable to a little above. Everyone else is either poor or living pay check to pay check. Average wages rose $ 0.06 last quarter, so 6 cents wage. Current minimum wage is $ 7.25 and hour, if it had kept pass with what it was in 1973 it would be over $22.00 dollars an hour.
Medium income in the state of Iowa last year was $58,570 in 2017, so the average family is trying to live and raise a family on $4,900 a month, before taxes. And most business today are paying less and less for insurance each year.
How many people do you do know that are living on one income households, and how are they doing? Today both people are working, and hoping to get along, or are struggling.
And you can talk about record unemployment all you want, but for many Americans, they are working harder, longer hours and their paycheck struggles to pay all the bills.

It always has been....

Indeed part of my reasoning for wanting to further my education was the incentive to move up that economic ladder. What is the incentive otherwise?

 

[LincolnWay187]

There's a numerator and a denominator in those %s.

State - that's your numerator.
Budget - that's your denominator.

2018: budget $731M, state contrib $225M (31%)
1988: budget $173M, state contrib $112M (65%)*
2018: budget $345M, state contrib $106M (31%) (adjusted for inflation)

In real dollars, the State puts in about the same amount. But ISU budget has doubled. Enrollment has not doubled, but it is up quite a bit - roughly 50%. So what is the other half of the budget increase caused by?

The only argument I would make is: how much should taxpayers spend to subsidize students who will go on to make more $$ than those that aren't subsidized? It seems unfair, especially when most students come from higher socioeconomic backgrounds. But it is also a public good to have more educated populace. Reasonable people can disagree on %s. I am not sure I have a strong opinion, but I'd lean toward people getting the benefits (students) paying the costs.

*Note the 1988 info was from a report on in-state vs out of state students and tuition, so I had to back into the budget numbers - it showed total revenue, which I have to assume is close to the budget. I think they should be close.

I don't get your argument on who should earn subsidized school. Anyone in the state of Iowa can apply to and go to Iowa State if their grades are good enough. It's a public service.

 

[Sigmapolis]

Would your MD wife be able to practice without the degree? Would I be able to teach without the license? For many jobs that piece of paper is needed to actually get the job. It doesn't matter that I use very little of it in my day to day work, without it, I can not get the job.

What jobs can I get today without some sort of education or technical training? Few is any, the days of starting to work at the factory, putting in your 30 years and retiring to the good life is pretty much gone.

The US is becoming a three tiered society. The top 5 to 10%, never have to worry about money for the rest of their life. The next 30 to 40% are living comfortable to a little above. Everyone else is either poor or living pay check to pay check. Average wages rose $ 0.06 last quarter, so 6 cents wage. Current minimum wage is $ 7.25 and hour, if it had kept pass with what it was in 1973 it would be over $22.00 dollars an hour.
Medium income in the state of Iowa last year was $58,570 in 2017, so the average family is trying to live and raise a family on $4,900 a month, before taxes. And most business today are paying less and less for insurance each year.
How many people do you do know that are living on one income households, and how are they doing? Today both people are working, and hoping to get along, or are struggling.
And you can talk about record unemployment all you want, but for many Americans, they are working harder, longer hours and their paycheck struggles to pay all the bills.

I think you are begging the question here -- the issue is not if you need the paper to receive the job. Yes, no medical school is going to accept her without an undergraduate degree. The issue is should they operate like that and should businesses require higher educations with only tenuous or nonexistence linkages to the actual tasks at hand because they can and it is a quick way to find smart, employable people without much screening.

My history degree has virtually no relevance to my day job as a software salesman. I got the job because I had a degree, however, and learned everything from there. Abraham Lincoln, one of the wisest men in American history, worked as an attorney and never spent a day in law school. He clerked in a law office, learning on the job, which I think is the reality of how humans learn to do a job and learn to be productive if we are honest, not in classrooms.

Elementary school is incredibly important -- everybody needs to know how to read and write and basic mathematics to function in our society. After that, though...

...the social return starts to decline pretty fast.

 

[madguy30]

I imagine there's something psychological going on. As an old millennial (born in the early 80s), I've had somewhat of this experience. My guess is that we were always told to "follow our dreams/passion." So we did that and then realized real life is not all rainbows and butterflies. There is no such thing as a "dream job" there are just jobs that are fun more than they are not. You're not going to find your "soul mate" where every moment is bliss, you're going to find someone you love despite the things about them you don't like. There will always be stresses: money, relationships, society, whatever.

In general, my generation tends to be idealistic, in my experience. So we build up this big event (entering the "real world") expecting that it's going to be soooo amazing. And then we realize, it's just life. Just like our parents and our parents before them. It's not bad, but it doesn't meet idealistic expectations. So we freak out a bit. We wonder if we're going about it the right way. Do I have the right job? Am I living in the right place? Should I change fields? We want to make the most of our time on earth and not waste our youth doing things we don't enjoy. So we spin ourselves up trying to find the "perfect" life because we're not living the one we imagined when we were 20.

Just my $0.02.

Reverting back to the social media thing...before all of this you could just do what you were doing, and only what you were doing, without knowing all of the time what others were doing that may look really great but realistically they're struggling with plenty of things. I think it was a much stronger sense of control of one's life.

I think the same thing goes with jobs to an extent...it's very easy to let your mind wander about other jobs and wondering if they'd be more fulfilling. Unless it's just a really awful working environment or something that is literally worse for your health, allow for a job to have bad days and ****** aspects. All the good things shine when you work through the hard parts.

And I'm not sure if it's a generational thing as much as it's a societal thing. All generations are tethered to their phones and looking to impress others.

There should be an anti-social media social media site where people post about how things are actually going.

 

[ISUTex]

The thing is people should not go in all that debt if the occupation they are choosing would not support repayment of said debt. Don't get into that mess and that stress. And don't go to the priciest schools. High schools fail kids here as do the colleges in not going over that kind of stuff.

Being poor in your early/mid 20's is nothing new. Just have to be smart and work your a@@ off. Unless you are physically/mentally handicapped, there is no excuse for being financially dependent on your parents when you are in your late 20's/early30's. That's f@@@$ng pathetic.

 

[Halincandenza]

The root of this is not a Republican problem or a Democrat problem...the root is a parenting problem.

Parents need to counsel their children (young adults) wisely, and to diligently be realistic in their kids abilities. Watching kids go to college without an end game is largely a sign of bad parenting advice. And this is one mistake that can be extremely costly!

Little kids....little problems. Bid kids...big problems.

Lol this is hilarious.

 

[LincolnWay187]

Are wages really flat?

I am also curious how many fresh college graduates try to live within their means? Start their budget from the bottom and work their way up? Not to sound to arrogant, but when I graduated, didn't have internet or cell phones, couldn't afford new/er cars, couldn't afford cable, started with 1950's hand-me-down furniture from my wife's grandparent's attic. Didn't go out to eat and didn't take vacations. Played a lot of cards with friends on Saturday nights or hang out with family.

So, simple question: how many kids have jumped into expenses they really can't afford?

Yes wages have been flat but things seem to be improving. 2008-2014 I feel like companies could lowball the f out of people and they were happy to just have a job. We need to limit h1b visas which should help. A lower unemployment rate shows companies can't throw their weight around as much the past couple years.

 

[SEIOWA CLONE]

It always has been....

Indeed part of my reasoning for wanting to further my education was the incentive to move up that economic ladder. What is the incentive otherwise?

Sure it is ,as it was for me, therefore we should make sure others also have the same opportunity that we did, and not come out of college with a mountain load of debt.
We have two groups of people today, those that want a better future for everyone, and those that have the attitude, "I got mine, you go get yours without any help from me."

Now are they teaching others to be self sufficient or just showing their own GREED.

 

[SEIOWA CLONE]

I think you are begging the question here -- the issue is not if you need the paper to receive the job. Yes, no medical school is going to accept her without an undergraduate degree. The issue is should they operate like that and should businesses require higher educations with only tenuous or nonexistence linkages to the actual tasks at hand because they can and it is a quick way to find smart, employable people without much screening.

My history degree has virtually no relevance to my day job as a software salesman. I got the job because I had a degree, however, and learned everything from there. Abraham Lincoln, one of the wisest men in American history, worked as an attorney and never spent a day in law school. He clerked in a law office, learning on the job, which I think is the reality of how humans learn to do a job and learn to be productive if we are honest, not in classrooms.

Elementary school is incredibly important -- everybody needs to know how to read and write and basic mathematics to function in our society. After that, though...

...the social return starts to decline pretty fast.

You did not answer my question, Could your wife practice medicine today without the degree. Say she worked in a hospital and picked it up on the job. Can a person working in a school, learn from watching teachers and then without training start teaching themselves. I mean they learned from watching others?
No, they cannot. That is my point for many career, without the diploma, you are not given the chance to do the job. Hell hairdressers need a license in the state of Iowa.

So lets now make it harder and more expensive for some to follow their dreams and get an education or vo tech training? Or profit off their desire to get the training?
Its wrong and unamerican to profit off of others in this way, but its capitalism at its finest.

 

[Sigmapolis]

You did not answer my question, Could your wife practice medicine today without the degree. Say she worked in a hospital and picked it up on the job. Can a person working in a school, learn from watching teachers and then without training start teaching themselves. I mean they learned from watching others?
No, they cannot. That is my point for many career, without the diploma, you are not given the chance to do the job. Hell hairdressers need a license in the state of Iowa.

So lets now make it harder and more expensive for some to follow their dreams and get an education or vo tech training? Or profit off their desire to get the training?
Its wrong and unamerican to profit off of others in this way, but its capitalism at its finest.

You are completely missing the point and again, begging the question. Why are all those hoops and certifications meaningful if they are irrelevant to the realities of the job? The idea that cutting hair needs certification is hilariously silly. You are basically saying "the speed limit is 55 because it is 55" when the whole debate is if it should even be 55 in the first place.

Why are all these credentials and certifications -- most of which have very little to do with doing the jobs in question -- choking the labor market in the first place?

Businesses ask for these ornate and irrelevant credentials because they serve a quick, easy way to find intelligent, conformist, and conscientious workers without having to do much work towards screening out the bad ones from the good ones themselves.

You are pushing something as a "public good" that, ironically, has benefits that mostly accrue to the two groups you probably have the least sympathy for...

(1.) People expecting high-incomes because of their degrees (and their families).

(2.) Businesses who benefit from the signaling and sorting on the labor market.

 

[Halincandenza]

You are completely missing the point and again, begging the question. Why are all those hoops and certifications meaningful if they are irrelevant to the realities of the job?

Why are all these credentials and certifications -- most of which have very little to do with effectively doing the jobs in question -- choking the labor market in the first place?

Businesses ask for these ornate and irrelevant credentials because they serve a quick, easy way to find intelligent, conformist, conscientious workers without having to do much work towards screening out the bad ones from the good ones themselves.

You are pushing something as a "public good" that, ironically, has benefits that mostly accrue to the two groups you probably have the least sympathy for...

(1.) People expecting high-incomes because of their degrees (and their families).

(2.) Businesses who benefit from the signaling and sorting on the labor market.

And you are proclaiming them useless as if that is a fact. When you start with a false premise you get a false conclusion.

 

[Cyched]

I imagine there's something psychological going on. As an old millennial (born in the early 80s), I've had somewhat of this experience. My guess is that we were always told to "follow our dreams/passion." So we did that and then realized real life is not all rainbows and butterflies. There is no such thing as a "dream job" there are just jobs that are fun more than they are not. You're not going to find your "soul mate" where every moment is bliss, you're going to find someone you love despite the things about them you don't like. There will always be stresses: money, relationships, society, whatever.

In general, my generation tends to be idealistic, in my experience. So we build up this big event (entering the "real world") expecting that it's going to be soooo amazing. And then we realize, it's just life. Just like our parents and our parents before them. It's not bad, but it doesn't meet idealistic expectations. So we freak out a bit. We wonder if we're going about it the right way. Do I have the right job? Am I living in the right place? Should I change fields? We want to make the most of our time on earth and not waste our youth doing things we don't enjoy. So we spin ourselves up trying to find the "perfect" life because we're not living the one we imagined when we were 20.

Just my $0.02.

I do think it’s important to find a job you enjoy versus just slogging along every day watching the clock.

The key is to pick a career that provides you the time and money to do the things you love.

 

[Sigmapolis]

And you are proclaiming them useless as if that is a fact. When you start with a false premise you get a false conclusion.

They are useless because I recognize the realities that most people learn their jobs on the job and higher education mostly serves the purpose of signalizing/sorting.

Nobody has even tried to refute those points -- mostly because they are generally true.

You are right that a false premise leads to a false conclusion. But they ain't false.

 

[Beernuts]

Sure it is ,as it was for me, therefore we should make sure others also have the same opportunity that we did, and not come out of college with a mountain load of debt.
We have two groups of people today, those that want a better future for everyone, and those that have the attitude, "I got mine, you go get yours without any help from me."

Now are they teaching others to be self sufficient or just showing their own GREED.

And what are we teaching others if we say..don't worry about individual responsibility, we will just add the expense to others or to future generations?

Is it greed when we want others to pay for the services they choose to use? No one is forcing anyone to go to college, and the idea that a college degree is the only means to financial success is false.