Four Reasons Why Millennials Don't Have Any Money | Robert Reich

Summary

The video script highlights the significant generational wealth gap between baby boomers and millennials, who face stagnant wages, soaring costs of housing and education, and substantial debt. Millennials are struggling with student loans, credit card debt, and the decline of pension plans, making it difficult to enter the middle class and save for retirement. The script calls for policy changes to address these issues and ensure financial security for young Americans.

Takeaways

• 📈 Millennials face a significant generational wealth gap compared to baby boomers.
• 🏠 Millennials are less likely to own homes and more likely to live in poverty.
• 💼 Stagnant wages have grown at an average of 0.3% per year between 2007 and 2017.
• 📚 Rising costs of housing and education have outpaced wage growth.
• 🎓 The average college education in 2018 cost nearly three times more than in 1978, adjusted for inflation.
• 💸 Millennials carry substantial student loan debt, averaging $28,000 per graduate.
• 💳 Credit card debt is also a growing issue among young adults.
• 💼 Fewer millennials are entering the middle class due to economic challenges.
• 💰 Most millennials have less than $1,000 in savings, impacting their financial security.
• 🌱 Policies such as debt relief, accessible health insurance, and affordable housing are suggested to address the wealth gap.

Q & A

What is the main issue discussed in the video script?

The main issue discussed in the video script is the vast generational wealth gap between baby boomers and millennials, caused by factors such as stagnant wages, increased costs of essentials like housing and education, and significant debt burdens.

How has the median wage growth for millennials compared to previous generations?

Median wages for millennials grew by an average of 0.3% per year between 2007 and 2017, which is significantly lower than the growth rate of three times that during the mid-1980s to mid-1990s.

What has been the impact of stagnant wages on millennials' ability to own homes?

Stagnant wages have led to millennials owning fewer homes, which is a common way Americans have built wealth in the past. This has contributed to the wealth gap between millennials and previous generations.

How has the cost of education affected millennials' financial situation?

The cost of education has soared, with the average college education in 2018 costing nearly three times what it did in 1978 when adjusted for inflation, leading to millennials carrying significant student loan debt.

What is the average student loan debt for a college graduate mentioned in the script?

The average graduate carries a student loan debt of $28,000.

How has the shift from employer-sponsored pensions to do-it-yourself savings plans affected millennials?

The shift has made it harder for millennials to save for the future, as evidenced by the decrease in the number of Fortune 500 companies sponsoring pension plans from 288 twenty years ago to only 81 in 2017.

What is the average credit card debt carried by young adults according to the script?

The average young adult carries nearly $5,000 in credit card debt, and this number is growing.

What is the implication of the financial challenges faced by millennials on their retirement?

Many young people may not be able to retire until 75, if at all, due to the financial challenges they face, such as stagnant wages, high debt, and lack of savings.

What policy solutions are suggested in the script to address the generational wealth gap?

The script suggests policies like debt relief, accessible health insurance, paid family leave, affordable housing, and a more equitable tax code for renters to reduce the generational wealth gap.

How does the video script address the additional challenge of the climate crisis for millennials?

The script acknowledges the climate crisis as an additional challenge for millennials, implying that addressing the wealth gap is part of a broader set of issues they must face.

What is the role of Katie in the video script?

Katie is introduced as the 'resident millennial' in the video script, presumably to provide a personal perspective on the issues discussed and to engage with the content presented.

Outlines

00:00

💼 Millennial Wealth Gap and Economic Challenges

The paragraph discusses the economic disparities between baby boomers and millennials, highlighting that millennials face significant challenges in building wealth. Despite being hardworking and starting families, millennials are burdened with higher debt, lower home ownership rates, and increased likelihood of living in poverty compared to their parents. Key issues include stagnant wages that grew at only 0.3% per year between 2007 and 2017, a sharp contrast to the 3 times faster growth in the mid-1980s to mid-1990s. The costs of housing and education have skyrocketed, with the average college education in 2018 costing nearly three times more than in 1978. This has led to millennials carrying substantial student loan debt, averaging $28,000 per graduate. The paragraph also points out the decline in pension plans sponsored by Fortune 500 companies, shifting the retirement savings responsibility to individuals. The result is a generation struggling to save and enter the middle class, with most millennials having less than $1,000 in savings and facing the prospect of delayed retirement. The speaker calls for policy changes such as debt relief, accessible health insurance, paid family leave, affordable housing, and a more equitable tax code for renters to address these issues.

Keywords

💡Inequality

Inequality refers to the unequal distribution of resources, opportunities, or privileges among different groups in society. In the context of the video, it highlights the disparity between the top one percent and the rest of the population, emphasizing the economic challenges faced by millennials compared to baby boomers.

💡Generational Wealth Gap

This term describes the difference in wealth accumulation between different generations. The video discusses how millennials lag behind baby boomers in terms of wealth, with millennials being deeper in debt and less likely to own homes, illustrating a significant economic divide between these generations.

💡Stagnant Wages

Stagnant wages indicate a situation where wage growth is minimal or does not keep pace with inflation. The video points out that between 2007 and 2017, median wages grew at an average of 0.3% per year, which is significantly lower than the growth rate in the mid-1980s to mid-1990s, affecting millennials' ability to build wealth.

💡Cost of Essentials

This refers to the expenses associated with basic needs such as housing and education. The video emphasizes how the costs of these essentials have increased dramatically, making it harder for millennials to afford them, which in turn affects their financial stability and wealth accumulation.

💡Debt

Debt is an obligation to pay a sum of money that is owed. The video discusses how millennials carry significant debt, particularly student loan debt, which averages $28,000 per graduate. This debt burden is a major factor contributing to the generational wealth gap.

💡Pension Plans

A pension plan is a retirement plan that provides workers with an income after they retire. The video notes a decline in the number of Fortune 500 companies offering pension plans, which has implications for millennials' ability to save for retirement and contributes to their financial insecurity.

💡Middle Class

The middle class refers to a group of people in the middle of a social hierarchy, typically earning a moderate income. The video suggests that fewer millennials are entering the middle class due to economic challenges, which is a significant social and economic concern.

💡Retirement

Retirement is the period when an individual stops working and lives on their savings or pension. The video implies that many millennials may have to delay retirement due to insufficient savings, highlighting the long-term financial consequences they face.

💡Climate Crisis

The climate crisis refers to the urgent and potentially catastrophic impacts of climate change. The video mentions that millennials must also deal with this crisis, adding another layer of complexity to the challenges they face.

💡Policy Solutions

Policy solutions are measures implemented by governments to address societal issues. The video suggests policies such as debt relief, accessible health insurance, paid family leave, affordable housing, and a more equitable tax code as potential ways to reduce the generational wealth gap.

💡Financial Security

Financial security refers to the state of being free from financial worries or fears. The video discusses how many young Americans struggle to achieve financial security due to the challenges outlined, such as debt and stagnant wages.

Highlights

Millennials face a significant generational wealth gap compared to baby boomers.

Millennials are deeper in debt, less likely to own homes, and more likely to live in poverty than their parents.

Median wages grew at a mere 0.3% per year between 2007 and 2017 for millennials.

Wages grew three times faster between the mid-1980s and mid-1990s compared to the period millennials started their careers.

Costs for essentials like housing and education have increased dramatically.

Millennials own fewer homes, which is a traditional way Americans have built wealth.

The average college education cost in 2018 was nearly three times more than in 1978, adjusted for inflation.

The average graduate carries $28,000 in student loan debt.

Millennials as a generation are over one trillion dollars in debt.

The average young adult carries nearly $5,000 in credit card debt, with the number growing.

Millennials find it harder to save for the future due to fewer pension plans sponsored by Fortune 500 companies.

Employers are replacing pensions with do-it-yourself savings plans.

Fewer millennials are entering the middle class compared to previous generations.

Most millennials have less than $1,000 in savings.

Many young people may not be able to retire until 75 or at all.

Policies like debt relief, accessible health insurance, paid family leave, affordable housing, and a more equitable tax code are needed to reduce the generational wealth gap.

Millennials also have to deal with the oncoming climate crisis.

The video suggests that there is hope for the future if viewers watch more of their content.

The channel encourages viewers to subscribe for more informative videos.

Transcripts

The same forces that are driving massive inequality between the top one percent and the rest of

us are creating a vast generational wealth gap between baby boomers — my generation

— and millennials.

Millennials aren’t teenagers anymore. They’re working hard, starting families and trying

to build wealth. But as a generation, they’re way behind. They’re deeper in debt, only

half as likely to own a home, and more likely to live in poverty than their parents.

If we want to address their problems, we need to understand those problems.

Number one: Stagnant wages. Median wages grew by an average of 0.3% per year between 2007

and 2017, including the Great Recession -- just as millennials were beginning their careers.

Before that, between the mid-1980s and mid-1990s, wages grew at three times that rate.

Second, as wages have stagnated, the costs of essentials like housing and education have

been going through the roof. Millennials own fewer homes, the most common way Americans

have built wealth in the past. Education costs have soared. Adjusted for inflation, the average

college education in 2018 cost nearly three times what it did in 1978.

Three, and as a result of all of this, Debt. That expensive college education means

the average graduate carries a whopping $28,000 in student loan debt. As a generation, millennials

are more than one trillion dollars in the red. In addition, the average young adult

carries nearly $5,000 in credit card debt, and the number is growing.

Fourth, millennials are finding it harder than previous generations to save for the

future. Among Fortune 500 companies, only 81 sponsored a pension plan in 2017, that’s

down from 288 twenty years ago. Employers are replacing pensions with, essentially,

do-it-yourself savings plans.

All of this means that fewer millennials are entering the middle class than previous generations.

Most have less than $1,000 in savings. Many young people today won’t be able to retire until 75, if at all.

If we don’t start trying to reduce this generational wealth gap — through policies

like debt relief, accessible health insurance, paid family leave, affordable housing, and

a more equitable tax code for renters — millions of young Americans will struggle to find financial

security for the rest of their lives.

So, let me introduce you guys to our resident millennial. Looked all over for one -- and this is Katie.

Katie, how are you?

Good, how are you?

Pretty good. What did you think of our video?

Well, you know, it’s scary stuff, Bob. And if that wasn’t bad enough, my generation

has to deal with the oncoming climate crisis.

Nothing easy to do. If you watch our videos, you know, maybe there’s some hope for the future.

Exactly, and if you found this video informative, please consider subscribing to this channel

and check out our other video: The 6 Ways Millennials are Changing America.

Thanks, Katie.

Thanks, Bob.