Over the past few months I’ve had numerous conversations with a variety of people. Many are friends that we’ve known for decades and all have adult children now. In talking to many of them there is a consistent theme: Young adults are having a very tough time.
The Crisis Matrix
The year 2000 generation has suffered from crisis to crisis from the time they were born to today.
2001 – Terrorism 9/11
While kids born around 2000 were babies, the truth is 9/11 crippled the economy. If you were starting a family around this time you were definitely impacted in some shape or form. If your parents or grandparents had a sizable nest egg or college fund set aside, it was impacted.
2008 – Great Financial Crisis
The next issue was the great financial crisis where rampant fraud caused a near collapse of the global economy. I personally was impacted during this time frame and lost my job. The firm I worked for at the time ultimately went bankrupt.
2024 – COVID Pandemic
Just as things were finally starting to get back on track for everyone, COVID struck and the world was on the brink again. I personally was impacted during this time frame and lost my job again. The firm I worked for didn’t go bankrupt but they are a former shell of themselves at this point in time.
2030 – Demographics?
After reading huge volumes of articles, blogs, and traveling all over the world, I am beginning to think that the next big crisis in the United States will be the up-swell of baby boomers retiring in droves around 2030. There are an estimated 40 to 60 million baby boomers that will be on medicare and social security during that time frame taxing an already burdened government deficit budget.
Tough Times Ahead or Always Tough Times?
So what are young people enduring?
Wages
For starters, the federal minimum wage hasn’t budged from $7.25/hour in decades. I know some states have higher minimum wage but even those higher rates can’t keep up with inflation.
Inflation
Not raising wages wouldn’t be a huge issue if it weren’t for the fact that inflation has been out of control for decades, despite what is reported by official and unofficial agencies. The mortgage on my five bedroom $100,000 home that I bought in the late 90s was $1100. Today, that house is paid off but my expenses: utilities, insurance, repair/maintenance, etc. exceed $1400/month. My $20 water and gas bill is now $100 or more. My $50 electric bill is now $200. And so on.
Job Market
I’m all for innovation and advancements but AI is going to wipe a whole bunch of high paying jobs. Eventually there will be new jobs that form around AI but the transition will be painful. Imagine if you went to art school to be a graphic designer and now AI can do your job 10 times better and for $20/month. There are many jobs expected to disappear and if you’ve chosen the wrong career path, you’re going to be screwed.
Ironically, “prompt engineer” for AI was a hot job just a year ago and that’s starting to lose it’s value as AI is now prompting itself better than a human can.
What Next?
I honestly, don’t know. My own kids have dealt with the situation in their own way. One kid has decided to make a life in Europe, another plans to go back to school for a law degree. We are planning on moving to a lower cost country and allow our investments to grow. If we can live on minimal expenses and let our nest eggs grow higher and faster unimpeded, we’ll be better off in the long haul.
Share The Wealth
Are you struggling out there? You don’t need to let me know, just know that you have my sympathy.