This is because our society has conflated education with acquiring skills which can be used to create value. What do we tell our young people? “Get good grades, so you can go to college, get a degree, and get a good job.”
Now, don't get me wrong: being well educated has many benefits to both society as a whole and to any given individual. A great education is a wonderful thing to acquire and very valuable.
But when we tell our young people, “just get the best grades you can and stick it out until you have a piece of paper”—we shouldn't be surprised when they don't have skills they can trade in the free market for the income they want. (You can argue whether this /should/ be the case, but I'm not arguing what should be, only what reality currently is.)
I was fortunate enough to realize this several years ago, in large part thanks to Hacker News, PG's writings on creating wealth, and Jason Fried's Inc Magazine article on making money [1]. But I only found these resources indirectly because I happened to be excited by programming while in high school—not because my school counselors, parents, or society as a whole was pushing me in this direction.
Living life well requires balancing many things: work, family, learning, hobbies, helping others. I don't have an easy answer to that. But I do think we need to stop glossing over the whole making-money-is-a-skill thing. It's not doing our young people any good. They need to spend their early years both acquiring a great education, and learning marketable skills. And we need to ask them those hard questions before they turn 25, graduate, and suddenly wonder how they're going make it in the real world. Otherwise, the trend outlined in the article will only continue.
> This is because our society has conflated education with acquiring skills which can be used to create value.
It's even worse than this. Society has conflated credentials with education.
It's not necessary that someone learns 'marketable skills' during an undergraduate degree. However, it _is_ important that they develop their ability to think and to learn. Those in themselves are not marketable skills, but help greatly in acquiring marketable skills later.
There are other professions that make money. But it's possible to get educated in all kinds of fields where either there isn't much demand for work, or the work intrinsically breeds a few stars and others in the field get nothing.
Not that there's necessarily anything wrong with pursuing those fields anyway; the question is, are the people going into them properly informed?
Tony Blair told a generation, don't learn a trade, get a degree. Now we have graduates making coffee, and we import all our skilled labour from Eastern Europe, because no Brits know how to be plumbers, electricians and carpenters anymore.
Perhaps, but at the very least nthj is postulating the existence of good jobs for everyone if only they would train effectively for them. I take serious issue with this assumption: even if you found a more effective way to get drowning people out of the water and into lifeboats, how do you know that you won't just sink the lifeboats?
The usual response from those with more faith in the free market than I is that "increased employment will stimulate demand in a virtuous cycle." It's a nice theory and certainly true to a degree, I just don't see any reason why we should expect this virtuous cycle to converge at more-or-less total employment. What I do see is an overabundance of evidence that it does not converge at total employment. I also see a number of disturbing trends that suggest the problem will get worse before it gets better.
I read it as: Aspire to make things people want. the things you're interested making may require extensive education, but that should always subordinate to making things people want.
Some claim that this is part of a broader trend of "generational theft" from the young to the old and have some interesting slides to demonstrate their thesis:
Single-person households are included in the family calculations.
So is the difference between older and younger families or between two-person and one-person households? Depending on the definition of household (flatmates?), I'd guess there are more young one-person households nowadays than 30 years ago.
You can't even correct for it. Because people who would get married early today are also different than people who would 30 years ago. For example, more religious.
Among families of all ages, those with more education tend to earn more than those with less. But that differential appears to be shrinking.
As more and more marginal college students are accepted?
I am very sceptical about stats like that. College graduates from 30 years ago are not the same in many other regards as today. Households headed by a young person today are not the same as those 30 years ago. This goes double for the US who accepted tens of millions of immigrants in the meantime.
Also, people are staying in education for longer and deferring earnings. A 23 year old working at Walmart will probably out earn a 23 year old studying for their masters while they are both 23 but probably not when they are both 30.
Some of them, but retail management salaries aren't very high unless you are running the entire store. In many cases supervisors aren't paid much more than the staff they manage and they still want graduates for higher management positions.
It is very easy to become a store manager (refrain from screwing up and take transfers when available for promotions), and those jobs pay exceptionally well. A Walmart or Winn-Dixie store manager is going to be making six figures, and at least in the case of Winn-Dixie, they actively avoid people with advanced degrees because district managers are afraid of getting passed over.
I don't see how this is a factor when they compare a change in difference between college graduates and not over time. College graduate in 1989 would also be deferring their earnings.
I'm in the 35-44 group and I just continue downward. Salaries post 2k7 haven't recovered, and health care costs in the past couple years have sky rocketed with the new plans. So, with cost of living and property taxes increasing, my pay stagnating to falling when you include health care premiums, I can't even live paycheck to paycheck half the time. The sad thing is I make more in my current developer job of 15 years than if I left to go somewhere else to 2k7 pay levels, so that's not an option.
It's not just a young person thing. It's the new economy with the gap ever widening and I don't see it changing. Just get into the right field. Sales execs making real good money around here (the mid-Atlantic) while IT is not.
That number is less common than you think, but even if it were the median, you'd still have half of people below that.
Areas where that kind of salary is most common are extremely expensive. When you factor in all family expenses and commute (unless you get ridiculously lucky or are ok with really cramped quarters), you end up with bills a lot higher than a single person. For kids, there is healthcare, school related stuff, toys, the right good and so on. It's a lot tougher than you might think.
Psychology also kicks in here - when you've been busting your ass for 15 years to make a good living, you expect to be able to afford certain things. Unfortunately, prices of luxury goods have far outpaced consumer goods, so you end up feelings lot less "wealthy" than you think you should.
Just to add on to what sologoub stated...When I started IT many moons ago, I had a nice linear progressions of jobs and pay. We moved from an apartment to small house to slightly bigger rural area house. My job felt steady and I liked that with a young family. When I was ready to move onto the next position 2007 happened.
Now any move I make in the field would likely end up being a step down or lateral move in pay, based on the many recruiters and their position offerings I speak with. It's just the nature of the current economy. I make good money, but the cost of living has now outpaced what good money means and my pay has stagnanted if not gone down with health premium costs.
I can't help but think that referring to technology as "IT" might be part of the problem. Nobody I know who's doing technical product development calls it IT. In my mind, that term connotes working as a glorified support specialist in a large corporation.
Sorry - I should remember the audience. My wife always just says I do IT when people ask, so it's kind of ingrained in my head. I'm a developer (or whatever other term you want to use for that). I've worked from small teams (which are the best) to large corps.
Only at a tiny few companies, in a handful of (high cost-of-living) cities offer salaries that high, and only for a small number of roles. Sure, tech workers currently have it slightly better than most, in this down economy, but that's not saying much.
Also, years of experience doesn't matter after a certain point. Tech, programming, etc. salaries don't increase linearly with experience forever. After some time (5 years or so), your salary will stop increasing, even moving from company to company, and when that happens, the skyrocketing cost of health care, housing, etc., which do increase year after year, will mean your standard of living will decrease over time.
It's made up of a few different things - less state/federal government support, drying up economy (less companies paying taxes), and things cost more. We also live in a sprawl area, so more schools being built, etc. I've lived here for 10 years and for 10 years the property taxes have gone up. I would consider moving, but my kids are in middle/high school and I am trying my best to not uproot if I can avoid it.
Didn't really answer the questions. Do your property taxes increase because the rates increased or because the assessed value of your property increased, or perhaps because your governments added flat per-parcel fees?
I re-assessed many years (5+) ago to get it as low as possible and haven't had that changed. The selling price of the homes went down with everyone else in 2k7, and have slowly gotten better to maybe worth a little more than what we paid for. It's really do to what I listed.
I thought I stated, but I guess not clearly, that it is due to the mill rate increasing every year for the past 10 years due to the factors I listed, not valuation.
"The results are released by family, not by individual, so the median family income may include the income of both spouses. Single-person households are included in the family calculations."
Doesn't this study simply measure the fact that someone who is fifty years old is likely to have a spouse, while someone who is twenty is less likely to have one?
No; They're comparing across different points in time. Unless the portion of older families that are married has increased, the gap would not change with time due to that factor.
> No; They're comparing across different points in time. Unless the portion of older families that are married has increased, the gap would not change with time due to that factor.
The proportional difference in marriages definitely has increased. As people are getting married later, it absolutely makes sense that the average household income for younger people is falling as more of them are single-earner "households." [1]
This is a great point, the study should provide more details.
I remember seeing a study a while back that said "American household income is lower in 2010 than it was in 1979". The key here is "household". If you look at the demographics trends, there are far more single parent households now than in 1979.
In other words, the conclusion of the study was deceptive. Yes household income is going down, but individual income is going up.
They would have to be losing ground, the math demands it. The job recovery is almost entirely fake. At the rate we're going, we should hit 4% unemployment with the lowest participation rate in 45 years.
A quick review of the labor force participation rate, how many full-time jobs existing today vs. 2007, the number of full-time jobs vs part-time jobs, and the quality of jobs created, will tell you all you need to know.
Full-time jobs are still at 2006 levels (we've added maybe 17 million total people in that time), and barely above 1999 levels (ie in 15 years, we've added almost no net full-time jobs).
The participation rate seems like it could be a little misleading- the baby boomer pig in the demographic python is squeezing out the other end. People retiring doesn't seem like the worst of all possible worlds.
"In the first survey (1989), the younger group included families headed by people born after 1954, and so was dominated by baby boomers. The latest group (2013) includes families headed by people born after 1984, and they seem not to have done nearly as well early in their careers."
1989 - 1954 = 35
2013 - 1984 = 29
I'm not particularly surprised that younger-than-29-year olds, on an average, don't earn as much, or are as successful as younger-than-35-year-olds.
It might be more accurate to say it is trying to recover from the 2007 crash. There is a distinct possibility of another downward leg in the economy. For example QE was probably unavoidable, but QE2 and QE3 is a symptom of continuing to spend on war when 2007 should have caused a much more sudden and dramatic reduction in shoveling money into that fire.
The ECB is pondering beginning a QE-like program. Will QE4 follow QE3? Can it? The economy is still running on emergency measures. It's difficult to call that "recovering."
I think you're reading too much into the conspiracy theories here.
The quantitative easing (QE) programs are designed to decrease long-term rates, in other words, flatten the yield curve, which have been more-or-less successful. In the US this program is drawing to a close.
The EU is really a different story and a lot of what is going on there has to do with the fact that they failed to tackle their banking crisis in 2009-2010. The US was able to swallow the medicine more quickly.
The EU did put in place other programs, including the long term refinance operation, which has never has used explicitly.
The economic cycle is just that. Always expect the next downturn. The question is will there by another financial crisis in the next few years, or will the crisis come later?
There are a lot of lo-tinfoil people who are appalled that we are on QE3, which followed immediately after QE2, which "ended on schedule." The problem is QE is the last ditch. In monetary policy our backs are against the wall. And too many people think "OK, we didn't have a total financial meltdown, things must be pretty OK." They're not "pretty OK" until lowering the CB interest rates becomes effective again, and the assets<cough>junk</cough> on the CB balance sheets is getting sold off.
The next thing that snaps is going to be very very ugly.
Now, don't get me wrong: being well educated has many benefits to both society as a whole and to any given individual. A great education is a wonderful thing to acquire and very valuable.
But when we tell our young people, “just get the best grades you can and stick it out until you have a piece of paper”—we shouldn't be surprised when they don't have skills they can trade in the free market for the income they want. (You can argue whether this /should/ be the case, but I'm not arguing what should be, only what reality currently is.)
I was fortunate enough to realize this several years ago, in large part thanks to Hacker News, PG's writings on creating wealth, and Jason Fried's Inc Magazine article on making money [1]. But I only found these resources indirectly because I happened to be excited by programming while in high school—not because my school counselors, parents, or society as a whole was pushing me in this direction.
Living life well requires balancing many things: work, family, learning, hobbies, helping others. I don't have an easy answer to that. But I do think we need to stop glossing over the whole making-money-is-a-skill thing. It's not doing our young people any good. They need to spend their early years both acquiring a great education, and learning marketable skills. And we need to ask them those hard questions before they turn 25, graduate, and suddenly wonder how they're going make it in the real world. Otherwise, the trend outlined in the article will only continue.
[1] http://www.inc.com/magazine/20110301/making-money-small-busi...