Millennials & the economy

millennials-economyDr. Eric Fruits,
EconMinute Blog
Oregon economist

As college students make plans for graduation (and I make plans to teach a summer session at Portland State University), I am reminded how much the world has changed since I graduated college. The typical graduate this year was born sometime between 1990 and 1993. According to the Beloit College Mindset List, here’s how their worldview is different from mine:

– MTV never featured music videos.
– The Simpsons has always been on TV.
– Microbreweries have always been ubiquitous.
– There has always been an airline going into, or coming out of, bankruptcy.
– Stadiums, sporting events, and music tours have always been sponsored.
– Global warming has always been a crisis.
– 9/11 is a meme (“jet fuel can’t melt steel beams”), rather than a national tragedy.
– The Soviet Union never existed and there has only been one Germany.
– Google has always been a verb, and Milli Vanilli has always had no meaning.
– They have never used a floppy disk and they don’t know why CC stands for carbon copy.

But, here’s one that the Mindset List has missed:

Today’s college graduates do not remember a time that the economy was booming.

The last time the economy was booming with rapid employment and income growth, today’s college grads were early teenagers, watching the first Harry Potter movies while their parents were scandalized by Brokeback Mountain.

Then, as they were getting ready to leave high school and enter college, employment dropped. Their parents may have lost a home or a job.

As they began to see and understand the world around them, they saw recession bordering on depression. They saw job opportunities fade away. And they gained the feeling that the only way to “make it” in the world was in high tech, entertainment—“Apps and Raps”—or high finance. It seemed that success depended less on your skills and what you knew and more on who you knew and how you could game the system.

So, now, the Republican message of making it on your own through smarts and hard work is rejected as cynical when it comes from silver spooners like Mitt Romney. And the Democratic message of income equality is rejected as cynical when it comes from the Clintons who make 10 times more from giving a speech then the average family makes in a year.

And that’s the challenge in promoting economic opportunity through the free market.

Today’s college grads can’t remember a world where hard work, education, and the freedom to make money meeting the market were almost certain to produce prosperity.

The economic booms during the Ronald Reagan and Bill Clinton presidencies are ancient history to today’s young adults.

Older generations may say, “Remember what happened to the economy when we cut taxes and reduced regulations?” They don’t know that airline deregulation gave us cheap plane tickets. They don’t know that trucking deregulation paved the way for next day delivery. They don’t know that railroad deregulation is why we can get fresh produce all year ’round.

Today’s young adults will answer, “No. And we don’t believe you.” They only remember recession and sluggish recovery. They only remember failed solutions like the Stimulus, Cash-for-Clunkers, Recovery Summer, and Quantitative Easing. To them, nothing has worked, which means nothing will work. Only Charlie Brown will come back to the football after it’s been pulled away so many times.

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