RE: Student Debt Slows Growth as Young Spend Less — NYTimes
Earlier this year there was a lot of hand wringing about why younger kids aren’t buying cars, or houses etc, and the consensus seemed to be that the financial turmoil of 2007/8, and its cavalcade of side effects was the reason, that as the economy improved, things would go back to normal. The writer, wondered, however …
“But what if these assumptions are simply wrong? What if Millennials’ aversion to car-buying isn’t a temporary side effect of the recession, but part of a permanent generational shift in tastes and spending habits? It’s a question that applies not only to cars, but to several other traditional categories of big spending—most notably, housing. And its answer has large implications for the future shape of the economy—and for the speed of recovery.”
It seems like that is exactly the case, and the big catalyst for this change is crushing Student loan debt, coupled with the credit crunch, and slow job market from the near-financial- apocalypse of 2007/8
“It is a new thing, a big social experiment that we’ve accidentally decided to engage in,” said Kevin Carey, the director of the Education Policy Program at the New America Foundation, a research group based in Washington. “Let’s send a whole class of people out into their professional lives with a negative net worth. Not starting at zero, but starting at a minus that is often measured in the tens of thousands of dollars. Those minus signs have psychological impact, I suspect. They might have a dollars-and-cents impact in what you can afford, too.”
What trips me out is how because of this … new ways of thinking about ownership have been spawned that have the potential to reshape our world going forward.
Car2go, zipcar, airbnb, uber, Spotify, rdio … millenials aren’t buying to own any more, they’re renting/sharing and the ramifications of this could be massive.
In the end, its really just amazing how the world seems to undergo these seismic changes while nobody is paying attention, and then, just like that … everything changes.
Also Read: The Cheapest Generation