Category: Millennials

Millennials Left Out of the Economic Boom

On March 18, 2019

In Capitalism, Democracy, Millennials, Student Debt, Uncategorized

Millennials have seen the lowest level of GDP growth of three major generations since WWII. Baby Boomers, Gen X enjoyed GDP growth rates of between 30 – 40 % in the ten years after they turned 18 years old. While, Millennials experienced half those GDP growth rates .

Sources: Commerce Department, The Washington Post – 3/15/19

To gain entrance to good jobs, Millennials became the most educated cohort in America’s history – yet at a price. Student debt is at an all-time high of $1.5 trillion. This debt level has caused at least 400,000 potential young buyers of homes to be left out of the housing market in 2014, according to Federal Reserve economists. One reason students needed to take on such massive debt loads is states for the past 30 years have been drawing down their financial support of college education by between 60 – 50 %. Universities were left no choice to fill the funding gap except by raising tuition.

We have documented in previous posts that real wages for the 80 % in income group have been basically stagnant for the last 30 years. As the nation’s top 20 % gains 90 % of the income and wealth gains since the Great Recession, Millennials have been further challenged to keep up, particularly if they have no college education living in inner cities and Midwest rural regions. The hallowing out of manufacturing in the Midwest and South has produced low wage, low benefit, limited future jobs for young people. Add the slow Internet infrastructure and lower quality healthcare makes the future look dim. Is it any wonder that the Heartland has the highest opioid death rate in the country?

Millennials feel their lack of an economic future in other ways, delaying marriage by 8 to 10 years and having children 5 – 6 years later than other generations.

Next Steps:

A whole generation has been missing out on the benefits of the fastest growing wealth generation economy in the world. As income and wealth goes to the top 10 % to the highest level of concentrated wealth since 1929, the education services that make for a broad based pluralistic economy have fewer student slots and extremely high tuition. Corporate and wealthy individual taxes are at the lowest levels in 50 years. Our higher education system is turning into a grinder for people of modest means, carrying a heavy burden of debt for young people to begin their careers and families.

The number one issue for Millennials is student debt. We need as a country to deal with this problem. Students did not withdraw support for state colleges and universities, taxpayers and state governments did withdraw financial support with huge consequences for our young people and our economy. There have been a variety of proposals to reduce student debt including, forgiving debt completely, or forgiving debt for service to the country (as a proposal we made in a post to focus on investing in our Midwest communities), require corporations to provide more training for employees, and corporate support of a national apprenticeship program at a funding level and quality of Germany’s apprentice program for non – college careers.

The key is we need to end the bickering between conservatives, independents and liberals and take on the economic challenge of huge debt that our young people have today. Certainly, these people need to take responsibility for their own economic future, but we who created the present economy of winners and losers need to do better by our young people or when they gain positions of economic power we may not like the economic system they setup.

Millennials Demand Virtual Health Services – Upending the Present System

By Patrick Hill

On October 23, 2018

In Health, Health insurance, Internet, Millennials

(Editor Note: Insight Bytes focus on key economic issues and solutions for all of us, on Thursdays we spotlight in more depth Solutions to issues we have identified. Fridays we focus on how to build the Common Good. Please right click on images to see them larger in a separate tab. Click on the Index Topic Name at the beginning of each post to see more posts on that topic on PC or Laptop.)

Image: meddeviceonline.com

By 2020 there will be 83 million millennials in our country becoming the largest generational group. As they take ever more powerful positions in our society their demands on the healthcare system will focus on virtual services. They grew up using the Internet, with its culture of immediate access, virtual relationships and convenience. Millennials expect their healthcare services to provide the same types of services as they regularly use on the Internet – Internet healthcare. For them the baseline is using technology as the platform for accessing, using and paying for services.

Harris Survey for Salesforce – 2015

The millennial generation want to use as their framework for health services all the Internet services they enjoy now: patient reviews, online appointments (including specialists), using mobile phones for services, use apps to manage their wellness, use wearables for monitoring health, 3D printing of devices ie hearing aids, teleservices like video chat with a doctor, and pills that monitor internal organs that are swallowed.

The present system is organized around a primary care physician (PCP) who is the gatekeeper and co-manager of the patient’s health program. All patient records are with the PCP and the healthcare provider, records are not accessible from anywhere in the ‘cloud’. The core guiding principle being that all medical services need to be integrated, not disconnected for increased efficiency, effectiveness and safety.

Artificial Intelligence adds another innovation level to delivery of health services. The AI industry is looking to serve the needs of millennials in healthcare by offering ‘neural network’ based medicine of expert databases and access to the ‘right treatments’ at the click of a button or the swipe of a phone app.

Next Steps:

The implications for changing the present PCP, doctor oriented system toward an on-demand patient based system are revolutionary. One challenge will be how to maintain continuity of care when the patient is using virtual services from multiple providers, while ensuring effective care and safety. The human body is one complex entity made up of multiple systems, all integrated tightly to work together. If one system is off balance or damaged other systems maybe impacted, which is why the PCP based system was established. Doctors, not patients are trained to see the interactions of various human body systems, and to know when and how to bring in a specialist to treat a condition. Yet, how will placing tests, treatments and services at the touch of an app by a patient change the doctor – patient relationship? Will quality of care be maintained? Will high quality care only go to the technology savvy patient who knows how access all the health services to obtain a complete health solution? Are we going to be comfortable with AI – a physician advisor robot prescribing medications, treatments, surgery? In this virtual world of services who is responsible for maintaining continuity in care?

The virtual world of medicine does offer ways for reducing the cost of healthcare dramatically to thousands of patients. The U.S. spends 41 % more as a percentage of GDP than OECD countries while life expectancy is 4 years less. Yet how will the present system of layered providers, drug – pharmacy managers and hospitals respond to Internet based healthcare? Will they just use this myriad of disconnected services to charge even more because it will be difficult for the patient to manage costs the same way a health care provider does today. Do we want to place the patient in the center of healthcare delivery of services? The economic dislocation of every health care service provider will be profound and huge. How will we make sure that all our citizens are included and not just those with Internet access? So, what will our health sector plan be?

A few salient points need to be kept in mind in developing a sound policy. The patient does not have the expertise of a physician who has attended years of training, internship and practice before treating patients. Replacing the physicians role in the delivery of healthcare needs to be done carefully and in some cases certain conditions are off limits. Ensuring the safety of medicines, treatments and invasive procedures needs to be paramount in any system change. Patients need to be given options, for example the patient may not want a robo physician advisor and wants a human doctor of his or her choice.

The other major point is our political processes are way behind what technology innovators are creating today, dramatically impacting what our healthcare choices will be tomorrow. Our political processes need to be brought up to date, and forward looking if we are to have any chance at making intelligent decisions about our healthcare delivery system. We need to take this opportunity of a shift to Internet based health care to ensure that everyone receives good quality health care, at a reasonable price and will not go bankrupt in the process.

Families Are the Place to Start Building the Common Good

By Patrick Hill

On August 17, 2018

In Common Good, Consumer Squeeze, Corporate Power, Corporate Reform, Families, Health insurance, Millennials, Public Interest, Stock Buybacks, Wages

Image: sleepingshouldbeeasy.com

We all have a mother and father, and may have brothers and sisters. We come into the world born of our mother with a bonding to her, and if all goes well the father is there to raise us too. We can all agree that families are a priority – when things get tough our families come first.

Bo Lotzoff, philosopher and counselor helping many prisoners and poor people turnaround their lives, observed about American society that we ‘love things and use people’. It should be the other way around, ‘love people and use things’. Think about this insight. When we look objectively at what has happened to family life in the past 30 years, the slice of time devoted to family versus work has progressed in reality to not much time, or invested engagement by the working parent.

In Silicon Valley, the heart of technology innovation world-wide, it is the standard expectation for most workers at top companies to be at work until 8 or 9pm, just leaving barely enough time for fathers or mothers to read a story and tuck their children into bed. Management expects knowledge workers to check for text messages at least 19 hours a day and email before coming into the office, responding to work requests on weekends too. Even, on vacations, if project reviews are planned workers are expected to phone in for the key meetings and ‘stay on top’ of what is happening. When global conference calls are involved, the calls may start at 6am to Germany and continue to 7 or 8 pm to Japan or China. What all this connectedness means is that the company owns the mind and emotions of the worker 24 by 7. At one startup ‘all hands’ meeting just prior to the Christmas holiday the CEO thanked everyone for their hard work over the past year and declared, “have a fun Christmas or holiday rest for a day, then let’s make our numbers!” He made the statement kind of in just but half serious, the workers got his point, see your families and friends but stay connected 24 by 7.

Corporate life is destroying family life and our connectedness as a community. Being totally connected to the corporation is more important if we want to maintain our standard of living is the message. Corporations are using people and loving things (sounds like high tech).

Nourishing, sustaining and building stronger families would do a lot for solving our societal and economic issues. Crime would go down as young men who are left to live on the streets would be learning skills, playing a team sport or having a family supporting his life, and where after school programs were funded and staffed well. Groups like Thread, in Baltimore actually use the family structure with Parents and Grandparent surrogates to support youth in poor parts of the city where there may be only one parent and that parent is not home much of the time working two or three jobs to support the family. Today we are missing millions of our youth to crime, opioids and dead end jobs that could be active productive members of our labor force. Our labor force is declining with the aging of baby boomers, we need all the paycheck workers we can to support our aging population and for young workers to save for their futures.

So, let’s look at the policies of our federal government using the family yardstick which most people right or left, Republican or Democrat agree:

Family Separation – recently we saw that there was consensus that children should be kept with their parents – even immigrant children
Health Insurance – a Pew Research survey showed that 58 % of all Americans believed that every person should have affordable health insurance for which the government is responsible
Childhood Health Insurance Program (CHIP) – most Senator and Congressmen agreed and renewed the CHIP bill to protect children caught between Medicaid and being too poor to afford an individual health insurance plan in this past December’s spending bill.
Flexible Job Definition – more social and family counselors see a need for men and women to have flexible time jobs meaning that when a family emergency comes up like an illness or doctor appointment the worker can take time off and make the appointment without repercussions in job performance, salary or benefits.
Parental Leave – Federal law of 1997 requires private employers to provide maternity leave up to 12 weeks of unpaid job-protected parental leave to bond with a new child within one year of birth, adoption, or foster care placement (parental leave). The US is the only country in the developed world that does not have paid leave for parents.
Wages – real wages (after inflation) for the 80 % of workers in the U.S. have basically been stagnant for the last 30 years. Instead, corporate executives use excess profits to juice their stock prices with stock buybacks instead of raising wages. They are wasting nearly $810 billion that Goldman Sachs estimates is being spent in 2018 on stock buy backs. That $810 billion could go a long way to providing decent wages for workers. Analysts estimate the S & P 500 index is at least 20 % higher from what the prices of company stocks would be without stock buybacks. The reality is that workers and their families suffer having to work two or three jobs because of the greed of executive management.

We could add to the list, our point is made, when we have a consensus that families need to be placed as the first priority, not the second or third or thirty-fifth, then our legislative priorities are clear. Other countries seem to make a thriving economy and support of families work. Germany has paid parental leave, a net export economy, good wages, employee councils and at least 4 weeks of paid vacation for most employees. Most German families feel secure. This author asked a co-worker from Germany if he considered working in the U.S., he noted, “I would get sharper, get closer to engineering and innovation, yet, there is no real recognition of families, In Germany, I have paid leave for a new child, four weeks of vacation every year, a good guaranteed retirement program, health insurance and I participate in our employee council…I don’t want to live under constant stress in America.”

Families are the basic economic building block of our country. When corporations take control of our government and run our families into oblivion we all are hurt as a country. In the end corporate executives need to wake up and support family sustaining policies in their company, their management culture, wages and in Washington to build strong families. Otherwise, someday corporations will discover as is beginning to happen today, that young women having the fewest babies ever since WW II, the lowest level of family formations ever and lowest number of millennials buying homes will lead to shrinking markets, falling margins and reduced sales. We need to monitor what is happening to the health of our families to know if our societal values, economic values, government policies and corporate behavior are strengthening or weakening families.

Opioids Are Killing Our Young People Reducing Our Labor Force

By Patrick Hill

On June 6, 2018

In Heartland Economics, Labor, Millennials, Worker Wages

Image: thetab.com

The Opioid Epidemic is devastating for our young people. The size of the opioid addiction death wave is so high that it is leading to a sharp decrease in the size of the 24 – 54 year old labor force group.

Sources: JAMA Open Network, Marketwarch – 6/7/2018

A paper recently published in the Journal of the American Medical Association found that 20 % of all Millennials deaths in 2016 were caused by opioid overdoses. From 2001 to 2016 opioid deaths have increased by 292 %. Experts believe the dip in the size of the 25 – 54 year old group is in part caused by the opioid epidemic compared to other developed countries.

Source: OECD Employment and Labor Market Statistics – 6/7/18

A comparison to OECD countries finds the U.S. labor force in the key mid-career 25 – 54-year-old group at 5 % less, which converts to millions of our young people left out of the labor force. When our labor force is not growing in this key age segment we are in store for a continuing decline in GDP growth, standards of living and few people to support our retired population. The total labor force even with the recovery since 2008 has been dropping to a 10-year low of 63 % overall:

Source: Department of Labor, The Wall Street Journal, The Daily Shot, 6/3/18

Certainly, more than the opioid epidemic is contributing to our low labor force participation rate including: companies automating many jobs so they are not hiring more workers, workers leaving the work force due to not finding work, a skills mismatch between job openings and candidates with the right skill set and the baby boomer population aging into retirement.

Next Steps:

The opioid epidemic strikes hardest in our Heartland as we recommended in an earlier blog on Heartland Development Centers that among other development investments to fund mental health, addiction and counseling services to help our young people in rural regions of the Midwest and South to return to active productive lives. Every day, families are suffering from the drug addiction crisis and our economy is suffering along with our young people. Our Congress, corporations, non-government organizations, government and health services groups need to establish a partnership to target the problem of drug addiction head on, with a major funding commitment, the latest strategies in drug rehabilitation, and job training programs which include high quality apprenticeship skills development leading to good paying jobs.

Millennials Buried in Student Debt Can’t Buy Homes!

By Patrick Hill

On May 29, 2018

In Housing, Millennials, Student Debt, Wages

Student debt has soared to $1.4 trillion in the last month according to the Federal Reserve. Now millennials are faced with a combination of soaring student debt and high home prices are giving up on owning a home.

Sources: Federal Reserve Bank of New York, US Census Bureau, New York Times – 5/29/18

In 2003, 42 % of people under age 35 owned a home now only 35 % own a home. The dream of owning a home is slipping away as our society allows the rich continue to enjoy huge tax reductions in the most recent tax bill, with continuous lack of state funding for colleges and universities and then a paucity of forgiveness programs for graduates. The lack of household formations, now at a low point since the Great Recession means that durable orders will fall and sure enough durables (ie. appliances, furniture, cars) orders have fallen recently. As millennials and working class are squeezed between stagnant wages and rents, college debt, car loan payments, and credit card payments:

Source: Bloomberg, The Wall Street Journal, The Daily Shot – 5/29/18

Next Steps:

We saw this problem getting worse in our blog last April and suggested several solutions related to student debt forgiveness and interest reduction programs:

“As part of the spending bill that Congress passed last month, $350 million was allocated for a fix it forgiveness program for some types of student loans. Senator Elizabeth Warren has been surveying the issue and individuals trying to take advantage of the provisions where she found that it was quite complex, answers were in complete from the Department of Education and work still needed to be done to setup the process. She found many firefighters and teachers having a difficult time getting into the program. Prior to passage of the spending bill Senators Whitehouse and Kaine wrote a bill to setup a student debt forgiveness program and get it funded, their bill set the stage for Democrats to push for provisions of the bill to be included in the omnibus spending bill.

This solution is still not enough compared to the huge issue of $1.49 trillion outstanding placing an anchor of debt on our young people when they need to be investing in starting their families and careers and buying homes. In blog of February 16th in our archives, we review an idea to cancel all student debt. We like the idea moving forward, yet recommend that forgiveness be done in stages, by reducing interest rates, offering Heartland Service, providing a universal national service option and corporate sponsorship of an internship by the student.”

Our ideas stand today, as they did six weeks ago as Congress, the Elite and Corporate Nation States continue to ignore the fact that we are not doing right by our young people entering the economy and starting their careers.

Millennial Buyers Hit by Shrinking Inventory of Starter Homes

By Patrick Hill

On March 29, 2018

In Housing, Millennials

Image: ccdallas.org

The number of starter homes for first time home buyers has continued to decline over the past six years. Millennial first time buyers are struggling with high student debt loads, car payments and sky high rents. Many young people can’t afford to live on their own and live with their parents into their late 20s and 30s. New household formations are at their lowest level since before the 2008 recession.

Sources: Trulia, Bloomberg – 3/22/18

On top of all the personal finance issues for first time buyers the price of housing continues to sky rocket now at a 7 – 8 % increase year over year. Plus, the GOP Administration has slapped tariffs on Canadian imported lumber a major building material for homes giving a even bigger boost to prices. The difference between incomes for starter home buyers and their incomes continues to spread with the housing affordability index at a 9-year low. For our economy we need a boost in first time buyer homes to increase house formation which will increase sales in home furnishings, appliances, and floor coverings – which are now flat to growing at only 1 to 2 % per year.

Builders make more margin on higher priced homes, so when they have a choice to build a high priced home versus an affordable one they will choose the high priced home. So, how do we provide incentives for builders to build more starter homes, and increase the pool of first time buyers so builders have a good market for starter homes?

Next Steps:

Home builders are business focused, they see a declining number of first time home buyers so they build more high prices homes and they have few incentives from loan providers to build first time homes.

First, we need to mitigate the student loan debt load by refinancing their loans at lower rates, providing more workouts on favorable terms or for public service out and out forgiveness of the loan.

Second, the lumber tariff needs to be ended, so we can balance lumber markets between the US and Canada to reduce lumber prices

Third, we need to work with federal home loan agencies to finance more first time homes on more favorable terms, so young couples, or others can purchase their starter home.

When people own a home they take care of it and their neighborhood looks better, they gain an intrinsic sense of reward in caring for their home and making it theirs – renting can never provide that feeling. Home ownership is a key pillar of our democracy building the equality of ownership. Homes need to be available to all to own, not just the wealthy.